2024年6月28日，通過了第14,905號法案，修改了第22,626號法令，即“Usura法”。該法案將於2024年8月28日生效，導致與巴西中央銀行授權的機構進行的交易，如Mercado Pago Instituição de Pagamento Ltda.，不再受之前實施的利率上限限制。
阿根廷
在2023年5月18日，阿根廷中央銀行（"CBA"）制定了一項新規定，要求QR碼必須與信用卡支付具有互通性，自2024年5月1日起生效。該規定還擴大了支付服務提供商（根據其西班牙文縮寫"PSP"）的註冊，并確定接受、收購、匯總或子收支付的某些實體必須註冊。根據該規定，MercadoLibre S.R.L.需要註冊為支付接受方和匯總方，而Mercado Pago Servicios de Procesamiento S.R.L.需要註冊為支付獲取方。該公司的子公司於2024年4月9日、2024年2月23日和2024年6月24日分別完成了其作為接受方、獲取方和匯總方的登記。
2023年6月，MercadoPago S.A. Compañía de Financiamiento獲得在哥倫比亞作為金融機構運營的許可，因此能夠提供信貸、數字帳戶、投資和預付卡。2024年4月22日，MercadoPago S.A. Compañía de Financiamiento開始運營，目前僅提供“普通存入”產品，並受到最低資本額、報告、消費者保護和風險管理要求的規範。根據規定，存款現在受到監管流動性、儲備和資本適足要求，以確保客戶基金的保護。
Intangible assets with definite useful life are comprised of customer lists, non-compete and non-solicitation agreements, hubs network, acquired software licenses and other acquired intangible assets including developed technologies and trademarks. Aggregate amortization expense for intangible assets for the nine-month periods ended September 30, 2024 and 2023 amounted to $4 million and $4 million, respectively, while aggregate amortization expense for intangible assets totaled $2 million and $1 million for the three-month periods ended September 30, 2024 and 2023, respectively.
Notes to unaudited interim condensed consolidated financial statements
The following table summarizes the remaining amortization of intangible assets (in millions) with definite useful life as of September 30, 2024:
For year to be ended December 31, 2024
$
1
For year to be ended December 31, 2025
2
For year to be ended December 31, 2026
2
For year to be ended December 31, 2027
1
Thereafter
2
$
8
NOTE 8. INTANGIBLE ASSETS AT FAIR VALUE
The following tables present the digital assets name, cost basis, fair value, and number of units for each significant digital asset holding as of September 30, 2024 and December 31, 2023:
Digital asset name
September 30, 2024
Cost basis (1)
Fair value
Number of units held
(In millions, except for number of units held)
Bitcoin
$
6
$
26
412.7
Ether
3
8
3,049.5
Digital asset name
December 31, 2023
Cost basis (1)
Fair value
Number of units held
(In millions, except for number of units held)
Bitcoin
$
6
$
17
412.7
Ether
3
7
3,041.6
(1) Cost basis of the digital assets is net of $21 million of impairment losses recognized prior to the adoption of ASU 2023-08.
NOTE 9. 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, Mexico, Argentina 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.
Notes to unaudited interim condensed consolidated financial statements
The following tables summarize the financial performance of the Company’s reporting segments:
Nine Months Ended September 30, 2024
Brazil
Mexico
Argentina
Other Countries
Total
(In millions)
Net revenues and financial income
$
8,270
$
3,317
$
2,511
$
620
$
14,718
Direct costs
(6,528)
(2,707)
(1,449)
(543)
(11,227)
Direct contribution
1,742
610
1,062
77
3,491
Operating expenses and indirect costs of net revenues and financial expenses
(1,680)
Income from operations
1,811
Other income (expenses):
Interest income and other financial gains
107
Interest expense and other financial losses
(117)
Foreign currency losses, net
(132)
Net income before income tax expense and equity in earnings of unconsolidated entity
$
1,669
Nine Months Ended September 30, 2023 (1)
Brazil
Mexico
Argentina
Other Countries
Total
(In millions)
Net revenues and financial income
$
5,544
$
2,129
$
2,552
$
473
$
10,698
Direct costs
(4,183)
(1,593)
(1,314)
(445)
(7,535)
Direct contribution
1,361
536
1,238
28
3,163
Operating expenses and indirect costs of net revenues and financial expenses
(1,291)
Income from operations
1,872
Other income (expenses):
Interest income and other financial gains
95
Interest expense and other financial losses
(136)
Foreign currency losses, net
(508)
Net income before income tax expense and equity in earnings of unconsolidated entity
$
1,323
(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.
Notes to unaudited interim condensed consolidated financial statements
Three Months Ended September 30, 2024
Brazil
Mexico
Argentina
Other Countries
Total
(In millions)
Net revenues and financial income
$
2,913
$
1,145
$
1,033
$
221
$
5,312
Direct costs
(2,408)
(953)
(576)
(191)
(4,128)
Direct contribution
505
192
457
30
1,184
Operating expenses and indirect costs of net revenues and financial expenses
(627)
Income from operations
557
Other income (expenses):
Interest income and other financial gains
43
Interest expense and other financial losses
(40)
Foreign currency losses, net
(40)
Net income before income tax expense and equity in earnings of unconsolidated entity
$
520
Three Months Ended September 30, 2023 (1)
Brazil
Mexico
Argentina
Other Countries
Total
(In millions)
Net revenues and financial income
$
2,063
$
795
$
910
$
159
$
3,927
Direct costs
(1,492)
(605)
(447)
(155)
(2,699)
Direct contribution
571
190
463
4
1,228
Operating expenses and indirect costs of net revenues and financial expenses
(443)
Income from operations
785
Other income (expenses):
Interest income and other financial gains
38
Interest expense and other financial losses
(53)
Foreign currency losses, net
(239)
Net income before income tax expense and equity in earnings of unconsolidated entity
$
531
(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.
Notes to unaudited interim condensed consolidated financial statements
The following table summarizes net revenues and financial income per reporting segment, which have been disaggregated by similar products and services for the nine and three-month periods ended September 30, 2024 and 2023:
Nine Months Ended September 30,
Brazil
Mexico
Argentina
Other Countries
Total
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
(In millions)
Commerce services (2)
$
4,176
$
2,615
$
1,864
$
1,160
$
795
$
727
$
396
$
293
$
7,231
$
4,795
Commerce products sales (3)
897
552
306
212
123
158
48
23
1,374
945
Total commerce revenues
5,073
3,167
2,170
1,372
918
885
444
316
8,605
5,740
Financial services and income (4)
1,793
1,554
398
261
1,165
1,162
165
143
3,521
3,120
Credit revenues (5)
1,384
808
738
489
425
502
8
5
2,555
1,804
Fintech products sales (6)
20
15
11
7
3
3
3
9
37
34
Total fintech revenues
3,197
2,377
1,147
757
1,593
1,667
176
157
6,113
4,958
Total net revenues and financial income
$
8,270
$
5,544
$
3,317
$
2,129
$
2,511
$
2,552
$
620
$
473
$
14,718
$
10,698
Three Months Ended September 30,
Brazil
Mexico
Argentina
Other Countries
Total
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
(In millions)
Commerce services (2)
$
1,452
$
1,007
$
647
$
429
$
358
$
260
$
144
$
100
$
2,601
$
1,796
Commerce products sales (3)
357
204
111
70
53
50
17
8
538
332
Total commerce revenues
1,809
1,211
758
499
411
310
161
108
3,139
2,128
Financial services and income (4)
597
544
137
98
458
429
57
47
1,249
1,118
Credit revenues (5)
499
304
246
195
163
171
2
2
910
672
Fintech products sales (6)
8
4
4
3
1
—
1
2
14
9
Total fintech revenues
1,104
852
387
296
622
600
60
51
2,173
1,799
Total net revenues and financial income
$
2,913
$
2,063
$
1,145
$
795
$
1,033
$
910
$
221
$
159
$
5,312
$
3,927
(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.
Notes to unaudited interim condensed consolidated financial statements
NOTE 10. FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES
Assets and liabilities measured and recorded at fair value on a recurring basis
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023:
Balances as of September 30, 2024
Quoted Prices in active markets for identical Assets (Level 1)
Significant other observable inputs (Level 2)
Balances as of December 31, 2023
Quoted Prices in active markets for identical Assets (Level 1)
Significant other observable inputs (Level 2)
(In millions)
Cash and Cash Equivalents:
Money Market
$
302
$
302
$
—
$
639
$
639
$
—
U.S. government debt securities (1)
—
—
—
60
60
—
Foreign government debt securities (1)
—
—
—
32
32
—
Restricted Cash and Cash Equivalents:
Money Market (2)
393
393
—
278
278
—
Foreign government debt securities (1)
—
—
—
116
116
—
Investments:
U.S. government debt securities (1)
1,262
1,262
—
1,009
1,009
—
Foreign government debt securities (1) (3)
4,069
4,069
—
2,530
2,530
—
Corporate debt securities
261
261
—
30
30
—
Other Assets:
Derivative Instruments
26
—
26
23
—
23
Customer crypto-assets safeguarding assets
81
—
81
34
—
34
Intangible assets at fair value
34
34
—
24
24
—
Total Assets
$
6,428
$
6,321
$
107
$
4,775
$
4,718
$
57
Salaries and social security payable:
Long-term retention plan
$
133
$
—
$
133
$
104
$
—
$
104
Other Liabilities:
Derivative Instruments
18
—
18
31
—
31
Other
10
—
10
—
—
—
Customer crypto-assets safeguarding liabilities
81
—
81
34
—
34
Total Liabilities
$
242
$
—
$
242
$
169
$
—
$
169
(1) Measured at fair value with impact on the statement of income for the application of the fair value option. (See Note 2 – Summary of significant accounting policies – Fair value option applied to certain financial instruments).
(2) As of September 30, 2024 and December 31, 2023, includes $390 million and $269 million, respectively, of money market funds from securitization transactions. (See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments).
(3) As of September 30, 2024 and December 31, 2023, includes $19 million and $23 million, respectively, of investments from securitization transactions. (See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments).
The Company’s assets and liabilities measured and recorded at fair value on a recurring basis were valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets); ii) Level 2 inputs: obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date; and iii) Level 3 inputs: valuations based on unobservable inputs reflecting Company’s assumptions. As of September 30, 2024 and December 31, 2023, there were no assets and liabilities measured and recorded at fair value using level 3 inputs.
There were no transfers to and from Levels 1, 2 and 3 during the nine-month period ended September 30, 2024, nor during the year ended December 31, 2023.
In addition, as of September 30, 2024, the Company and its subsidiaries are subject to certain legal actions considered by the Company’s Management and its legal counsels to be reasonably possible of resulting in a loss for an estimated aggregate amount up to $223 million. No loss amounts have been accrued for such reasonably possible legal actions.
For further information related to contingent liabilities please refer to Note 15 to the consolidated financial statements in the Company’s 2023 10-K.
Notes to unaudited interim condensed consolidated financial statements
Tax Claims
Brazilian preliminary injunction against the Brazilian tax authorities (withholding income tax)
The tax claim related to the Brazilian preliminary injunction against the Brazilian tax authorities is described in Note 15 to the consolidated financial statements in the Company’s 2023 10-K. On April 3, 2024, the Superior Court of Justice decided to analyze whether the matter under consideration is capable of becoming a binding precedent. In April 2024, the Company submitted a petition claiming that the case is fully capable of being judged as a binding precedent and the civil association, Câmara Brasileira da Economia Digital, submitted a petition as amicus curiae with the same arguments. On October 14, 2024, the Superior Court of Justice decided the matter under consideration will be judged as a binding precedent. On September 17, 2024, Mercado Crédito Sociedade de Crédito, Financiamento e Investimento S.A. filed a writ of mandamus and requested a preliminary injunction to avoid the withholding income tax over payment being remitted to Argentina by applying the convention signed between Brazil and Argentina to prevent double taxation (the "Brazil-Argentina Treaty") which was granted to the aforementioned entity. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is probable based on the technical merits of the Company’s tax position and the existence of adverse decisions issued by the Superior Court of Justice. For that reason, the Company has recorded a provision for the disputed amounts, which was $360 million as of September 30, 2024, and which was recorded in non-current other liabilities in the consolidated balance sheets, net of the corresponding judicial deposits for $326 million (which includes $61 million of interest income).
Considering that the Brazil-Argentina Treaty to prevent double taxation treaty was amended in 2017, the Company started a new tax claim for the period from January 2019 to September 30, 2024, and the court granted a preliminary injunction recognizing the right of collecting the withholding tax at a 10% rate was granted. As a result of this preliminary injunction, further judicial deposits of withholding tax will be based on a rate of 10%. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is possible based on the technical merits of the Company’s position;therefore the Company will maintain the provision considering a 15% rate.
Interstate rate of ICMS-DIFAL on interstate sales
Interstate rate of ICMS-DIFAL on interstate sales without Complementary Law
The tax claim related to the interstate rate of ICMS-DIFAL (Imposto sobre Circulaçao de Mercadorias, Serviços de Transporte Interestadual, Intermunicipal e Comunicação on interstate sales at a differential rate) without the existence of a complementary law is described in Note 15 to the consolidated financial statements in the Company’s 2023 10-K. In March 2024, one of the cases related to the State of Santa Catarina (where the risk of losing had been considered probable) received judgment in favor of the State and will no longer be reported. In June 2024, one of the cases related to the State of Rio de Janeiro (where the risk of losing had been considered remote) received judgment partially in favor of the Company. Therefore, the Company presented a motion of clarification which is now pending judgment. In September 2024, one of the cases related to the State of Paraná (where the risk of losing had been considered remote) had been received in the Superior Tribunal of Justice to the judgment of an Special Appeal filed by the State. In June 2024, one of the cases related to the State of Rio de Janeiro (where the risk of losing had been considered remote) received judgment partially in favor of the Company. Therefore, the Company presented a motion of clarification which is now pending judgment. In addition, a case related to the State do Goiás (where the risk of losing had been considered probable) received judgment in favor of the Company, as a result of which, in June 2024, the State filed an appeal that was rejected by the Court. The case has not become final and unappealable. The remaining cases pending as of December 31, 2023 had no updates during the nine-month period ended September 30, 2024. The Company maintains a $2 million provision as of September 30, 2024 for the disputed amounts related to the 3 ongoing cases where the risk of losing is considered by Management to be probable, based on the opinion of external legal counsel.
Exclusion of ICMS tax benefits from federal taxes base
The tax claim related to the exclusion of ICMS tax benefits from the tax base of the Corporate Income Tax (“IRPJ”) and of the Social Contribution on Net Profits (“CSLL”) is described in Note 15 to the consolidated financial statements in the Company’s 2023 10-K. On April 17, 2024, the Federal Regional Court ruled in favor of the Company. Therefore, the Federal Government presented a motion of clarification, which was rejected in August 2024. In response, the Federal Government filed a special appeal, but it was rejected on October 10, 2024. The case has not yet become final and unappealable. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is not more likely than not based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any expense or liability for the disputed amounts. As of September 30, 2024, the total amount under dispute was $61 million.
The tax claim related to the exclusion of ICMS tax benefits from tax base of the Social Contributions (PIS and COFINS) is described in Note 15 to the consolidated financial statements in the Company’s 2023 10-K. On April 25, 2024, a ruling favorable to the Company was issued recognizing the Company’s right to exclude the amounts of credits arising from ICMS tax incentives from the PIS and COFINS calculation basis. On June 7, 2024, the Federal Government filed an appeal. The Company responded to the appeal and the case was referred to the Court for judgment on the request for an appeal. The first instance court’s decision has not yet become final and unappealable. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is reasonably possible but not probable based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any expense or liability for the disputed amounts. The Company had recorded $17 million of PIS and COFINS tax benefits arising from the ICMS tax incentives as of September 30, 2024.
於2024年9月27日，公司與放款人及公司附屬公司MercadoLibre S.R.L.、Ebazar.com.br Ltda.、Mercado Pago Instituição de Pagamento Ltda.、DeRemate.com de Mexico S. de R.L. de C.V.、MP Agregador、S. de R.L. de C.V.、MercadoLibre Chile Ltda.和MercadoLibre Colombia Ltda.簽署了一份為期$百萬的《修訂和重簽循環信貸協議》(“修訂和重簽信貸協議”)，並由初步保證人(集)MercadoLibre S.R.L.、Ebazar.com.br Ltda.、Mercado Pago Instituição de Pagamento Ltda.、DeRemate.com de Mexico S. de R.L. de C.V.、MP Agregador、S. de R.L. de C.V.、MercadoLibre Chile Ltda.和MercadoLibre Colombia Ltda.擔保公司根據《修訂和重簽信貸協議》之債務。400公司根據《修訂和重簽信貸協議》之債務由初步保證人擔保。
As of September 30, 2024, the Company used foreign currency exchange contracts to hedge the foreign currency effects related to the forecasted purchase of MPOs devices in U.S. dollars owed by a Brazilian subsidiary whose functional currency is the Brazilian Real. The Company designated the foreign currency exchange contracts as cash flow hedges, the derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the interim condensed consolidated statements of income in the “Cost of net revenues and financial expenses” line item, in the same period the forecasted transaction affects earnings. As of September 30, 2024, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into the interim condensed consolidated statements of income within the next 12 months.
In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its financial debt held by one of its Brazilian subsidiaries. The Company designated the swap contracts as cash flow hedges. The derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the interim condensed consolidated statements of income in the “Cost of net revenues and financial expenses” line item within the next 12 months. As of September 30, 2024, there are no outstanding derivatives hedging the interest rate fluctuation of the financial debt designated as cash flow hedges.
我們的廣告平台，Mercado Ads，讓企業能在mercadolibre市場和Mercado Pago Fintech平台上推廣其產品和服務。透過我們的廣告平台，mercadolibre的品牌和賣家能夠在我們的網頁上展示廣告，包括產品搜索、橫幅廣告或推薦產品。我們的廣告平台讓商家和品牌能夠接觸到在我們市場上隨時都有意購買的數百萬消費者，這不僅提高轉換率，也讓廣告商能夠利用我們的第一方數據來創建和定位高度特定的受眾。
(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 to our unaudited interim condensed consolidated financial statements for further details.
See Note 9 – Segments of our unaudited interim condensed consolidated financial statements for further information regarding our net revenues and financial income disaggregated by similar products and services for the nine and three-month periods ended September 30, 2024 and 2023.
Our Commerce revenues grew $2,865 million and $1,011 million, or 49.9% and 47.5%, for the nine and three-month periods ended September 30, 2024, respectively, as compared to the same periods in 2023. This increase in Commerce revenues was primarily attributable to:
■(i) an increase of $2,436 million and $805 million in our Commerce services revenues for the nine and three-month periods ended September 30, 2024, respectively, mainly related to a 18.0% and 13.6% increase in gross merchandise volume, respectively, (ii) a 28.8% and 29.4% increase in our shipped items, respectively, and (iii) higher flat fee contributions for low gross merchandise volume transactions. Shipping carrier costs, which are netted against revenues, decreased $916 million and $398 million, from $1,710 million and $611 million for the nine and three-month periods ended September 30, 2023, to $794 million and $213 million for the nine and three-month periods ended September 30, 2024, respectively, mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; and
■an increase of $429 million in our revenues from Commerce products sales for the nine-month period ended September 30, 2024, as compared to the same period in 2023, mainly in Brazil and Mexico, partially offset by Argentina, mainly due to an increase in the Argentina’s official exchange rate against U.S. dollar, and an increase of $206 million for the three-month period ended September 30, 2024, as compared to the same period in 2023, mainly in Brazil and Mexico.
Our Fintech revenues grew 23.3% and 20.8%, from $4,958 million and $1,799 million for the nine and three-month periods ended September 30, 2023, respectively, to $6,113 million and $2,173 million for the nine and three-month periods ended September 30, 2024, respectively. This increase was mainly generated by:
■an increase of $751 million and $238 million in our credits revenues for the nine and three-month periods ended September 30, 2024, respectively, mainly as a consequence of higher originations; and
■an increase of $401 million and $131 million in our revenues from Financial services and income for the nine and three-month periods ended September 30, 2024, respectively, mainly related to a 34.7% and 34.0% increase in our total payment volume, and a 52.2% and 47.5% increase in our total payment transactions, respectively, partially offset by a decrease of financial income as a result of lower interest rates mainly in Argentina.
Brazil
Commerce revenues in Brazil increased 60.2% in the nine-month period ended September 30, 2024 as compared to the same period in 2023. This increase was generated by an increase of $1,561 million in our Commerce services revenues mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase of $345 million in our revenues from Commerce products sales. Fintech revenues grew by 34.5%, a $820 million increase, during the nine-month period ended September 30, 2024 as compared to the same period in 2023, mainly driven by an increase of $576 million in our Credits revenues and an increase of $239 million in our revenues from Financial services and income.
Commerce revenues in Brazil increased 49.4% in the three-month period ended September 30, 2024 as compared to the same period in 2023. This increase was generated by an increase of $445 million in our Commerce services revenues mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase of $153 million in our revenues from Commerce products sales. Fintech revenues grew by 29.6%, a $252 million increase, during the three-month period ended September 30, 2024 as compared to the same period in 2023, mainly driven by an increase of $195 million in our Credits revenues and an increase of $53 million in our revenues from Financial services and income.
Net revenues growth during the nine and three-month periods ended September 30, 2024, as compared to the same periods in 2023, were offset by the average increase of Brazil´s exchange rate against U.S. dollar of 4.6% and 13.6%, respectively.
Mexico
Commerce revenues in Mexico increased 58.2% in the nine-month period ended September 30, 2024 as compared to the same period in 2023. This increase was generated by an increase of $704 million in our Commerce services revenues mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase of $94 million in our revenues from Commerce products sales. Fintech revenues grew 51.5%, a $390 million increase, during the nine-month period ended September 30, 2024 as compared to the same period in 2023, mainly driven by an increase of $249 million in our Credits revenues and an increase of $137 million in our revenues from Financial services and income.
Commerce revenues in Mexico increased 51.9% in the three-month period ended September 30, 2024 as compared to the same period in 2023. This increase was generated by an increase of $218 million in our Commerce services revenues mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase of $41 million in our revenues from Commerce products sales. Fintech revenues grew 30.7%, a $91 million increase, during the three-month period ended September 30, 2024 as compared to the same period in 2023, mainly driven by an increase of $51 million in our Credits revenues and an increase of $39 million in our revenues from Financial services and income.
Net revenues growth during the three-month period ended September 30, 2024, as compared to the same period in 2023, were offset by the average increase of Mexico´s exchange rate against U.S. dollar of 11.1%.
Argentina
The main driver of the decrease in Argentina’s net revenues and financial income for the nine-month period ended September 30, 2024 is an average inter-annual increase of Argentina’s official exchange rate against the U.S. dollar of 273.8% for the nine-month period ended September 30, 2024, partially offset by an average inter-annual inflation rate in our Argentine segment of 262.8% for the nine-month period ended September 30, 2024.
Commerce revenues in Argentina increased 3.7% in the nine-month period ended September 30, 2024 as compared to the same period in 2023. This increase was generated by an increase of $68 million in our Commerce services revenues, partially offset by a decrease of $35 million in our revenues from Commerce products sales. Fintech revenues decreased 4.4%, a $74 million decrease, during the nine-month period ended September 30, 2024 as compared to the same period in 2023, mainly driven by a decrease of $77 million in our Credits revenues, partially offset by an increase of $3 million in our revenues from Financial services and income.
Commerce revenues in Argentina increased 32.6% in the three-month period ended September 30, 2024 as compared to the same period in 2023. This increase was generated by an increase of $98 million in our Commerce services revenues, and an increase of $3 million in our revenues from Commerce products sales. Fintech revenues increased 3.7%, a $22 million increase, during the three-month period ended September 30, 2024 as compared to the same period in 2023, mainly driven by an increase of $29 million in our revenues from Financial services and income, partially offset by a decrease of $8 million in our Credits revenues.
The following table sets forth our total net revenues and financial income and the sequential quarterly variation of these net revenues and financial income for the periods described below:
Quarter Ended
March 31,
June 30,
September 30,
December 31,
(In millions, except percentages)
2024
Net revenues and financial income
$
4,333
$
5,073
$
5,312
n/a
Percent change from prior quarter
(2)
%
17
%
5% (2)
2023 (1)
Net revenues and financial income
$
3,186
$
3,585
$
3,927
$
4,409
Percent change from prior quarter
2
%
13
%
10
%
12
%
(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 to our unaudited interim condensed consolidated financial statements for further details.
(2) Net revenues growth for the three-month period ended September 30, 2024 as compared to the three-month period ended June 30, 2024 were offset by the average increase of Brazil and Mexico official exchange rate against U.S. dollar of 6.3% and 9.8%, respectively.
The following table sets forth the growth in net revenues and financial income in local currencies, for the nine and three-month periods ended September 30, 2024 as compared to the same period in 2023:
Change from 2023 to 2024
(% of revenue growth in Local Currency) (1)
Nine-month period
Three-month period
Brazil
56.9
%
60.4
%
Mexico
56.3
59.9
Argentina (2)
256.7
245.4
Other countries
41.2
50.3
Total consolidated
103.7
%
102.7
%
(1) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2023 and applying them to the corresponding months in 2024, so as to calculate what our financial results would have been if exchange rates had remained stable from one year to the next. See also “Non-GAAP Financial Measures” section below for details on FX neutral measures.
(2) For the nine-month period ended September 30, 2024, the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 273.8% was partially offset by an average inter-annual inflation rate in our Argentine segment of 262.8%. For the three-month period ended September 30, 2024, the average inter-annual inflation rate in our Argentine segment of 236.4% was higher than the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 204.7%.
Cost of net revenues and financial expenses primarily includes shipping operation costs (including warehousing costs), carrier and other operating costs, cost of goods sold, collection fees, sales taxes, funding costs related to our credits and Mercado Pago business, fraud prevention expenses, hosting and site operation fees, certain tax withholding related to export duties, compensation for customer support personnel and depreciation and amortization. The following table presents cost of net revenues and financial expenses for the periods indicated:
Nine Months Ended September 30,
Change from 2023 to 2024
Three Months Ended September 30,
Change from 2023 to 2024
2024
2023 (1)
in Dollars
in %
2024
2023 (1)
in Dollars
in %
(In millions, except percentages)
(In millions, except percentages)
Cost of net revenues and financial expenses
$
7,890
$
5,158
$
2,732
53.0%
$
2,873
$
1,832
$
1,041
56.8%
As a percentage of net revenues and financial income
53.6
%
48.2%
54.1%
46.7%
(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 to our unaudited interim condensed consolidated financial statements for further details.
For the nine-month period ended September 30, 2024 as compared to the same period in 2023, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $1,838 million increase in shipping operating and carrier costs mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; ii) $326 million increase in cost of sales of goods mainly in Brazil and Mexico, partially offset by a decrease in Argentina; iii) $270 million increase in collection fees, which was mainly attributable to our Brazilian and Mexican operations as a result of the higher growth of total payment volume of Mercado Pago in those countries; and iv) $179 million increase in sales taxes.
For the three-month period ended September 30, 2024 as compared to the same period in 2023, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $678 million increase in shipping operating and carrier costs mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; ii) $167 million increase in cost of sales of goods mainly in Brazil and Mexico; iii) $86 million increase in collection fees, which was mainly attributable to our Brazilian, Argentinian and Mexican operations as a result of the higher transactions volume of Mercado Pago in those countries; and iv) $77 million increase in sales taxes.
Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues and financial income, which are classified as a cost of net revenues and financial expenses. These taxes represented 6.7% and 6.7% of net revenues and financial income for the nine and three-month periods ended September 30, 2024, and 7.5% and 7.1% for the same period in 2023.
Gross profit margins
Our gross profit margin is defined as total net revenues and financial income minus total cost of net revenues and financial expenses, as a percentage of net revenues and financial income.
Our cost structure is directly affected by the level of operations of our services, and our strategic plan on gross profit is built on factors such as an ample liquidity to fund expenses and investments and a cost-effective capital structure.
For the nine and three-month periods ended September 30, 2024 and 2023, our gross profit margins were 46.4% and 45.9%, and 51.8% and 53.3%, respectively.
For the nine-month period ended September 30, 2024, as compared to the same period in 2023, the decrease in our gross profit margin resulted primarily from an increase in our shipping operating and carrier costs, as a percentage of net revenues and financial income mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, partially offset by a decrease of our other fintech costs, sales taxes and collection fees, as a percentage of net revenues and financial income.
For the three-month period ended September 30, 2024, as compared to the same period in 2023, the decrease in our gross profit margin resulted primarily from an increase in our shipping operating and carrier costs, as a percentage of net revenues and financial income, mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase in cost of sales of goods as a percentage of net revenues and financial income, partially offset by a decrease of our other fintech costs, collection fees and sales taxes as a percentage of net revenues and financial income.
In the future, our gross profit margin could continue declining if we maintain the growth of our sales of goods business, which has a lower pure product margin, building up our logistics network and if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues and financial income trend.
Our product and technology development related expenses consist primarily of compensation for our engineering and web-development staff (including long term retention program compensation), depreciation and amortization expenses related to product and technology development, certain tax withholding related to export duties, telecommunications costs and payments to third-party suppliers who provide technology maintenance services to us. The following table presents product and technology development expenses for the periods indicated:
Nine Months Ended September 30,
Change from 2023 to 2024
Three Months Ended September 30,
Change from 2023 to 2024
2024
2023
in Dollars
in %
2024
2023
in Dollars
in %
(In millions, except percentages)
(In millions, except percentages)
Product and technology development
$
1,422
$
1,145
$
277
24.2%
$
504
$
396
$
108
27.3%
As a percentage of net revenues and financial income
9.7
%
10.7
%
9.5%
10.1%
For the nine-month period ended September 30, 2024, the increase in product and technology development expenses as compared to the same period in 2023 was primarily attributable to a: i) $146 million increase in salaries and wages mainly related to the increase of 17% in our product and technology development headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price; ii) $78 million increase in other product and technology development expenses mainly related to certain disputed amounts regarding withholding income tax contingencies in Brazil and higher tax withholding in connection with intercompany export services billing duties; and iii) $32 million increase in depreciation and amortization expenses mainly related to capitalized information and technology assets.
For the three-month period ended September 30, 2024, the increase in product and technology development expenses as compared to the same period in 2023 was primarily attributable to a: i) $63 million increase in salaries and wages mainly related to the increase of 17% in our product and technology development headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price; ii) $28 million increase in other product and technology development expenses mainly related to certain disputed amounts regarding withholding income tax contingencies in Brazil and higher tax withholding in connection with intercompany export services billing duties; and iii) $9 million increase in depreciation and amortization expenses mainly related to capitalized information and technology assets.
We believe that product and technology development is one of our key competitive advantages and we intend to continue to invest in hiring engineers to meet the increasingly sophisticated product expectations of our customer base.
Sales and marketing expenses
Our sales and marketing expenses consist primarily of costs related to marketing our platforms through online and offline advertising and agreements with portals, search engines and other sales expenses related to strategic marketing initiatives, charges related to our buyer protection program, the salaries of employees involved in these activities (including long term retention program compensation), chargebacks related to our Mercado Pago operations, branding initiatives, marketing activities for our users and depreciation and amortization expenses.
We enter into agreements with portals, search engines, social networks, ad networks and other sites in order to attract Internet users to the Mercado Libre Marketplace and convert them into registered users and active traders on our platform.
We also work intensively on attracting, developing and growing our seller community through our customer support efforts. We have dedicated professionals in most of our operations that work with sellers through trade show participation, seminars and meetings to provide them with important tools and skills to become effective sellers on our platform.
The following table presents sales and marketing expenses for the periods indicated:
Nine Months Ended September 30,
Change from 2023 to 2024
Three Months Ended September 30,
Change from 2023 to 2024
2024
2023
in Dollars
in %
2024
2023
in Dollars
in %
(In millions, except percentages)
(In millions, except percentages)
Sales and marketing
$
1,555
$
1,207
$
348
28.8%
$
566
$
441
$
125
28.3%
As a percentage of net revenues and financial income
10.6
%
11.3
%
10.7
%
11.2
%
For the nine-month period ended September 30, 2024, the increase in sales and marketing expenses as compared to the same period in 2023 was primarily attributable to a: i) $212 million increase in online and offline marketing expenses mainly in Brazil and Mexico; ii) $45 million increase in our buyer protection program expenses; iii) $35 million increase in salaries and wages mainly related to the increase of 13% in our sales and marketing headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price; and iv) $32 million increase in chargebacks.
For the three-month period ended September 30, 2024, the increase in sales and marketing expenses as compared to the same period in 2023 was primarily attributable to a: i) $76 million increase in online and offline marketing expenses mainly in Brazil; ii) $14 million increase in our buyer protection program expenses; iii) $13 million increase in chargebacks; and iv) $12 million increase in salaries and wages mainly related to the increase of 16% in our sales and marketing headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price.
Provision for doubtful accounts
Provision for doubtful accounts consists of the current expected credit losses on our financial assets, mainly loans receivable. The following table presents provision for doubtful accounts expenses for the periods indicated:
Nine Months Ended September 30,
Change from 2023 to 2024
Three Months Ended September 30,
Change from 2023 to 2024
2024
2023
in Dollars
in %
2024
2023
in Dollars
in %
(In millions, except percentages)
(In millions, except percentages)
Provision for doubtful accounts
$
1,331
$
751
$
580
77.2%
$
507
$
277
$
230
83.0%
As a percentage of net revenues and financial income
9.0
%
7.0
%
9.5%
7.1%
For the nine and three-month period ended September 30, 2024, as compared to the same period in 2023, the provision for doubtful accounts increased $580 million and $230 million, respectively, due to the increase in originations growing at 76% and 77% (mainly related to the credit card and consumer product), respectively, resulting an increase in the average balance of the loans receivable portfolio of 52.7% and 64.2%, respectively.
General and administrative expenses
Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of non-employee directors, long term retention program compensation, expenses for legal, audit and other professional services, insurance expenses, office space rental expenses, changes in the fair value of digital assets, travel and business expenses, as well as depreciation and amortization expenses. Our general and administrative expenses include the costs of the following areas: general management, finance, treasury, internal audit, administration, accounting, tax, legal and human resources. The following table presents general and administrative expenses for the periods indicated:
Nine Months Ended September 30,
Change from 2023 to 2024
Three Months Ended September 30,
Change from 2023 to 2024
2024
2023
in Dollars
in %
2024
2023
in Dollars
in %
(In millions, except percentages)
(In millions, except percentages)
General and administrative
$
709
$
565
$
144
25.5%
$
305
$
196
$
109
55.6%
As a percentage of net revenues and financial income
4.8
%
5.3
%
5.7%
5.0%
For the nine-month period ended September 30, 2024, the increase in general and administrative expenses as compared to the same period in 2023 was primarily attributable to a: i) $53 million increase in salaries and wages, mainly related to the increase of 11% in general and administrative headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price; ii) $52 million increase in contingencies; and iii) $23 million increase in other general and administrative expenses mainly related to higher tax withholding in connection with intercompany export services billing duties.
Other income (expenses), net consists primarily of interest income derived from our investments and cash equivalents, interest expense and other financial charges related to financial liabilities not related to Mercado Pago’s operations, and foreign currency gains or losses. The following table presents other income (expenses), net for the periods indicated:
For the nine-month period ended September 30, 2024, the decrease in other expense, net as compared to the same period in 2023 was primarily attributable to lower foreign exchange losses of $327 million due to acquisitions of financial instruments in the Argentine market at a price that reflects an additional cost of accessing U.S. dollars through an indirect mechanism due to restrictions imposed by the Argentine government for buying U.S. dollars at the official exchange rate, and due to lower foreign exchange losses from our Argentine subsidiaries. This was partially offset by higher foreign exchange losses from our Brazilian and Mexican subsidiaries.
For the three-month period ended September 30, 2024, the decrease in other expense, net as compared to the same period in 2023 was primarily attributable to (i) lower foreign exchange losses of $146 million due to acquisitions of financial instruments in the Argentine market at a price that reflects an additional cost of accessing U.S. dollars through an indirect mechanism due to restrictions imposed by the Argentine government for buying U.S. dollars at the official exchange rate, and (ii)foreign exchange gains from our Brazilian subsidiaries during the quarter ended September 30, 2024.
Income tax
We are subject to federal and state income tax in the United States, as well as foreign taxes in the multiple jurisdictions where we operate. Our tax obligations consist of current and deferred income taxes incurred in these jurisdictions. We account for income taxes following the liability method of accounting. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of our deferred tax assets will not be realized. Therefore, our income tax expense consists of taxes currently payable, if any (given that in certain jurisdictions we still have net operating loss carry-forwards), plus the change in our deferred tax assets and liabilities as a result of the estimate tax rate, adjusted for discrete items that are accounted for in the relevant period.
The following table summarizes the composition of our income taxes for the nine and three-month periods ended September 30, 2024 and 2023:
Nine Months Ended September 30,
Change from 2023 to 2024
Three Months Ended September 30,
Change from 2023 to 2024
2024
2023
in Dollars
in %
2024
2023
in Dollars
in %
(In millions, except percentages)
(In millions, except percentages)
Income tax expense
$
397
$
504
$
(107)
(21.2)
%
$
123
$
172
$
(49)
(28.5)
%
As a percentage of net revenues and financial income
During the nine and three-month periods ended September 30, 2024 as compared to the same periods in 2023, income tax expense decreased mainly as a result of lower income tax expense in Argentina and Brazil due to lower taxable income in Argentina and higher deferred tax assets in our Brazilian segment. This decrease was partially offset by higher income tax expense in Mexico in 2024 mainly driven by the income tax gains recognized in Mexico during the third quarter of 2023 as a result of the reversal of the valuation allowance in one of our Mexican subsidiaries and higher income tax expense due to withholding tax on dividends.
The following table summarizes our estimated effective tax rates for the nine and three-month periods ended September 30, 2024 and 2023:
Nine Months Ended September 30,
Three Months Ended September 30,
2024
2023
2024
2023
Effective tax rate (1)
23.8%
38.1%
23.7%
32.5%
(1) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table.
In January 2021, we signed agreements with 2028 Notes holders to repurchase $440 million principal amount of our outstanding 2028 Notes. The total amount paid amounted to $1,865 million, which includes principal, interest accrued and premium.
On November 13, 2023, holders of the 2028 Notes converted $439 million principal amount of 2028 Notes into 1,007,597 shares of our common stock, which we held as treasury stock. As of December 31, 2023, no principal amount of 2028 Notes remained outstanding.
Please refer to Note 13 – Loans payable and other financial liabilities to our unaudited interim condensed consolidated financial statements and to Note 17 to the audited consolidated financial statements for the year ended December 31, 2023, contained in the Company’s 2023 10-K for additional information regarding the 2028 Notes and the 2028 Notes Capped Call Transactions.
Debt Securities Guaranteed by Subsidiaries
On January 14, 2021, we issued $400 million aggregate principal amount of 2.375% Sustainability Notes due 2026 (the “2026 Sustainability Notes”) and $700 million aggregate principal amount of 3.125% Notes due 2031 (the “2031 Notes” and collectively, the “Notes”). The payment of principal, premium, if any, interest, and all other amounts in respect of each of the Notes, is fully and unconditionally guaranteed (the “Subsidiary Guarantees”), jointly and severally, on an unsecured basis, by certain of our subsidiaries (the “Subsidiary Guarantors”). The initial Subsidiary Guarantors were MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., Mercado Pago Instituição de Pagamento Ltda. (formerly known as “MercadoPago.com Representações Ltda.”), MercadoLibre Chile Ltda., MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico (formerly known as “MercadoLibre, S. de R.L. de C.V.”), DeRemate.com de México, S. de R.L. de C.V. and MercadoLibre Colombia Ltda. On October 27, 2021, MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico became an excluded subsidiary pursuant to the terms of the Notes and it was released from its Subsidiary Guaranty. On October 27, 2021, MP Agregador, S. de R.L. de C.V. became a Subsidiary Guarantor under the Notes. On July 1 and October 1, 2022, Ibazar.com Atividades de Internet Ltda. and Mercado Envios Servicos de Logistica Ltda. were merged into eBazar.com.br Ltda., respectively.
We pay interest on the Notes on January 14 and July 14 of each year, beginning on July 14, 2021. The 2026 Sustainability Notes will mature on January 14, 2026, and the 2031 Notes will mature on January 14, 2031.
The Notes rank equally in right of payment with all of the Company’s other existing and future senior unsecured debt obligations. Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law.
Each Subsidiary Guarantee will be limited to the maximum amount that would not render the Subsidiary Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of applicable law. By virtue of this limitation, a Subsidiary Guarantor’s obligation under its Subsidiary Guarantee could be significantly less than amounts payable with respect to the Notes, or a Subsidiary Guarantor may have effectively no obligation under its Subsidiary Guarantee.
Under the indenture governing the Notes, the Subsidiary Guarantee of a Subsidiary Guarantor will terminate upon: (i) the sale, exchange, disposition or other transfer (including by way of consolidation or merger) of the Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of the Subsidiary Guarantor (other than to the Company or a Subsidiary) otherwise permitted by the indenture, (ii) satisfaction of the requirements for legal or covenant defeasance or discharge of the Notes, (iii) the release or discharge of the guarantee by such Subsidiary Guarantor of the Triggering Indebtedness (as defined in the applicable indenture) or the repayment of the Triggering Indebtedness, in each case, that resulted in the obligation of such Subsidiary to become a Subsidiary Guarantor, provided that in no event shall the Subsidiary Guarantee of an Initial Subsidiary Guarantor terminate pursuant to this provision, or (iv) such Subsidiary Guarantor becoming an Excluded Subsidiary (as defined in the applicable indenture) or ceasing to be a Subsidiary.
為了補充按照美國通用會計原則（U.S. GAAP）編製的我們的未經審計的中期簡明綜合財務報表，我們提供了利息 income 和其他財務收益前的收益、利息費用和其他財務損失、外匯損失、淨收入稅負、折舊及攤銷以及未合併實體的權益收益（“調整後的 EBITDA”）、淨債務、外匯期貨（“FX”）中立指標、調整後的自由現金流和可投資現金及投資的淨增加（減少）作為非依照 U.S. GAAP 標準之指標。這些非依照 GAAP 標準之財務指標與最相關的 U.S. GAAP 財務指標的調和可以在下面的表格中找到。