Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-33647 | |
Entity Registrant Name | MercadoLibre, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-0212790 | |
Entity Address, Address Line One | WTC Free Zone | |
Entity Address, Address Line Two | Dr. Luis Bonavita 1294 | |
Entity Address, Address Line Three | Of. 1733, Tower II | |
Entity Address, City or Town | Montevideo | |
Entity Address, Country | UY | |
Entity Address, Postal Zip Code | 11300 | |
Country Region | +598 | |
City Area Code | 2 | |
Local Phone Number | 927-2770 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,559,537 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Central Index Key | 0001099590 | |
Common Stock, $0.001 par value per share | ||
Entity Addresses [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | MELI | |
Security Exchange Name | NASDAQ | |
2.375% Sustainability Notes due 2026 | ||
Entity Addresses [Line Items] | ||
Title of 12(b) Security | 2.375% Sustainability Notes due 2026 | |
Trading Symbol | MELI26 | |
Security Exchange Name | NASDAQ | |
2031 Notes | ||
Entity Addresses [Line Items] | ||
Title of 12(b) Security | 3.125% Notes due 2031 | |
Trading Symbol | MELI31 | |
Security Exchange Name | NASDAQ |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,171 | $ 1,910 |
Restricted cash and cash equivalents | 1,085 | 1,453 |
Short-term investments | 3,320 | 2,339 |
Accounts receivable, net | 161 | 130 |
Credit card receivables and other means of payments, net | 3,375 | 2,946 |
Loans receivable, net of allowances of $989 and $1,074 (Note 6) | 2,336 | 1,704 |
Prepaid expenses | 43 | 38 |
Inventories | 246 | 152 |
Customer crypto-assets safeguarding assets | 21 | 15 |
Other assets | 292 | 266 |
Total current assets | 13,050 | 10,953 |
Non-current assets: | ||
Long-term investments | 149 | 322 |
Loans receivable, net of allowances of $35 and $30 (Note 6) | 42 | 32 |
Property and equipment, net | 1,081 | 993 |
Operating lease right-of-use assets | 796 | 656 |
Goodwill | 159 | 153 |
Intangible assets, net | 21 | 25 |
Deferred tax assets | 489 | 346 |
Other assets | 337 | 256 |
Total non-current assets | 3,074 | 2,783 |
Total assets | 16,124 | 13,736 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,910 | 1,393 |
Funds payable to customers | 4,016 | 3,454 |
Amounts payable due to credit and debit card transactions | 745 | 483 |
Salaries and social security payable | 519 | 401 |
Taxes payable | 530 | 414 |
Loans payable and other financial liabilities | 2,272 | 2,131 |
Operating lease liabilities | 171 | 142 |
Customer crypto-assets safeguarding liabilities | 21 | 15 |
Other liabilities | 122 | 129 |
Total current liabilities | 10,306 | 8,562 |
Non-current liabilities: | ||
Amounts payable due to credit and debit card transactions | 12 | 5 |
Loans payable and other financial liabilities | 2,182 | 2,627 |
Operating lease liabilities | 615 | 514 |
Deferred tax liabilities | 163 | 106 |
Other liabilities | 105 | 95 |
Total non-current liabilities | 3,077 | 3,347 |
Total liabilities | 13,383 | 11,909 |
Commitments and contingencies (Note 10) | ||
Equity | ||
Common stock, $0.001 par value, 110,000,000 shares authorized, 50,496,474 and 50,257,751 shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 1,959 | 2,309 |
Treasury stock | (587) | (931) |
Retained earnings | 1,735 | 913 |
Accumulated other comprehensive loss | (366) | (464) |
Total equity | 2,741 | 1,827 |
Total liabilities and equity | $ 16,124 | $ 13,736 |
Interim Condensed Consolidate_2
Interim Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Loans receivable allowance, current | $ 989 | $ 1,074 |
Loans receivable allowance, noncurrent | $ 35 | $ 30 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 110,000,000 | 110,000,000 |
Common stock, shares issued (in shares) | 50,496,474 | 50,257,751 |
Common stock, shares outstanding (in shares) | 50,496,474 | 50,257,751 |
Interim Condensed Consolidate_3
Interim Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net revenues | $ 3,760 | $ 2,690 | $ 10,212 | $ 7,535 |
Cost of net revenues | (1,765) | (1,342) | (4,961) | (3,830) |
Gross profit | 1,995 | 1,348 | 5,251 | 3,705 |
Operating expenses: | ||||
Product and technology development | (396) | (278) | (1,145) | (774) |
Sales and marketing | (441) | (333) | (1,207) | (916) |
Provision for doubtful accounts | (277) | (288) | (751) | (845) |
General and administrative | (196) | (153) | (565) | (485) |
Total operating expenses | (1,310) | (1,052) | (3,668) | (3,020) |
Income from operations | 685 | 296 | 1,583 | 685 |
Other income (expenses): | ||||
Interest income and other financial gains | 196 | 65 | 545 | 142 |
Interest expense and other financial losses | (111) | (92) | (297) | (221) |
Foreign currency losses, net | (239) | (71) | (508) | (134) |
Net income before income tax expense and equity in earnings of unconsolidated entity | 531 | 198 | 1,323 | 472 |
Income tax expense | (172) | (69) | (504) | (154) |
Equity in earnings of unconsolidated entity | 0 | 0 | 3 | (1) |
Net income | $ 359 | $ 129 | $ 822 | $ 317 |
Basic earning per share | ||||
Basic net income available to shareholders per common share (in dollars per share) | $ 7.18 | $ 2.57 | $ 16.40 | $ 6.30 |
Weighted average of outstanding common shares (in shares) | 50,008,320 | 50,325,075 | 50,137,826 | 50,365,813 |
Diluted earning per share | ||||
Diluted net income available to shareholders per common share (in dollars per share) | $ 7.16 | $ 2.56 | $ 16.36 | $ 6.29 |
Weighted average of outstanding common shares (in shares) | 50,209,439 | 51,315,343 | 50,338,945 | 51,356,081 |
Service | ||||
Net revenues | $ 3,419 | $ 2,437 | $ 9,233 | $ 6,766 |
Product | ||||
Net revenues | $ 341 | $ 253 | $ 979 | $ 769 |
Interim Condensed Consolidate_4
Interim Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 359 | $ 129 | $ 822 | $ 317 |
Other comprehensive income: | ||||
Currency translation adjustment | (76) | (38) | 99 | 0 |
Unrealized (losses) gains on hedging activities | 2 | (9) | (8) | (33) |
Tax benefit (expenses) on unrealized (losses) gains on hedging activities | 1 | (3) | (2) | (8) |
Less: Reclassification adjustment for losses on hedging activities included in cost of net revenues, interest expense and foreign currency losses | (6) | (9) | (8) | (18) |
Less: Reclassification adjustment for estimated tax benefit on unrealized gains | 2 | 3 | 3 | 5 |
Net change in accumulated other comprehensive income, net of income tax | (71) | (38) | 98 | (12) |
Total comprehensive income | $ 288 | $ 91 | $ 920 | $ 305 |
Interim Condensed Consolidate_5
Interim Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Common stock | Common stock Cumulative Effect, Period of Adoption, Adjusted Balance | Additional paid-in capital | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjusted Balance | Treasury Stock | Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated other comprehensive loss | Accumulated other comprehensive loss Cumulative Effect, Period of Adoption, Adjusted Balance | |
Beginning Balance (in shares) at Dec. 31, 2021 | 50,000,000 | 50,000,000 | ||||||||||||||
Beginning Balance at Dec. 31, 2021 | $ 1,531 | $ (97) | $ 1,434 | $ 0 | $ 0 | $ 2,439 | $ (131) | $ 2,308 | $ (790) | $ (790) | $ 397 | $ 34 | $ 431 | $ (515) | $ (515) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Common Stock repurchased | (39) | (39) | ||||||||||||||
Net income | 65 | 65 | ||||||||||||||
Other comprehensive income (loss) | 129 | 129 | ||||||||||||||
Ending Balance (in shares) at Mar. 31, 2022 | 50,000,000 | |||||||||||||||
Ending Balance at Mar. 31, 2022 | 1,589 | $ 0 | 2,308 | (829) | 496 | (386) | ||||||||||
Beginning Balance (in shares) at Dec. 31, 2021 | 50,000,000 | 50,000,000 | ||||||||||||||
Beginning Balance at Dec. 31, 2021 | 1,531 | $ (97) | $ 1,434 | $ 0 | $ 0 | 2,439 | $ (131) | $ 2,308 | (790) | $ (790) | 397 | $ 34 | $ 431 | (515) | $ (515) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 317 | |||||||||||||||
Other comprehensive income (loss) | (12) | |||||||||||||||
Ending Balance (in shares) at Sep. 30, 2022 | 50,000,000 | |||||||||||||||
Ending Balance at Sep. 30, 2022 | 1,631 | $ 0 | 2,308 | (898) | 748 | (527) | ||||||||||
Beginning Balance (in shares) at Mar. 31, 2022 | 50,000,000 | |||||||||||||||
Beginning Balance at Mar. 31, 2022 | 1,589 | $ 0 | 2,308 | (829) | 496 | (386) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Shares granted | 6 | 6 | ||||||||||||||
Common Stock repurchased | (35) | (35) | ||||||||||||||
Net income | 123 | 123 | ||||||||||||||
Other comprehensive income (loss) | (103) | (103) | ||||||||||||||
Ending Balance (in shares) at Jun. 30, 2022 | 50,000,000 | |||||||||||||||
Ending Balance at Jun. 30, 2022 | 1,580 | $ 0 | 2,308 | (858) | 619 | (489) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Shares granted | 1 | 1 | ||||||||||||||
Stock-based compensation - restricted shares | (1) | (1) | ||||||||||||||
Common Stock repurchased | (40) | (40) | ||||||||||||||
Net income | 129 | 129 | ||||||||||||||
Other comprehensive income (loss) | (38) | (38) | ||||||||||||||
Ending Balance (in shares) at Sep. 30, 2022 | 50,000,000 | |||||||||||||||
Ending Balance at Sep. 30, 2022 | $ 1,631 | $ 0 | 2,308 | (898) | 748 | (527) | ||||||||||
Beginning Balance (in shares) at Dec. 31, 2022 | 50,257,751 | 50,000,000 | ||||||||||||||
Beginning Balance at Dec. 31, 2022 | $ 1,827 | $ 0 | 2,309 | (931) | 913 | (464) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Common Stock repurchased | (61) | (61) | ||||||||||||||
Net income | 201 | 201 | ||||||||||||||
Other comprehensive income (loss) | 73 | 73 | ||||||||||||||
Ending Balance (in shares) at Mar. 31, 2023 | 50,000,000 | |||||||||||||||
Ending Balance at Mar. 31, 2023 | $ 2,040 | $ 0 | 2,309 | (992) | 1,114 | (391) | ||||||||||
Beginning Balance (in shares) at Dec. 31, 2022 | 50,257,751 | 50,000,000 | ||||||||||||||
Beginning Balance at Dec. 31, 2022 | $ 1,827 | $ 0 | 2,309 | (931) | 913 | (464) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 822 | |||||||||||||||
Other comprehensive income (loss) | $ 98 | |||||||||||||||
Ending Balance (in shares) at Sep. 30, 2023 | 50,496,474 | 50,000,000 | ||||||||||||||
Ending Balance at Sep. 30, 2023 | $ 2,741 | $ 0 | 1,959 | (587) | 1,735 | (366) | ||||||||||
Beginning Balance (in shares) at Mar. 31, 2023 | 50,000,000 | |||||||||||||||
Beginning Balance at Mar. 31, 2023 | 2,040 | $ 0 | 2,309 | (992) | 1,114 | (391) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Common Stock repurchased | (146) | (146) | ||||||||||||||
Net income | 262 | 262 | ||||||||||||||
Other comprehensive income (loss) | 96 | 96 | ||||||||||||||
Ending Balance (in shares) at Jun. 30, 2023 | 50,000,000 | |||||||||||||||
Ending Balance at Jun. 30, 2023 | 2,252 | $ 0 | 2,309 | (1,138) | [1] | 1,376 | (295) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Capped call settlement | 0 | 412 | (412) | |||||||||||||
Conversion of 2028 Convertible Notes | 350 | (762) | 1,112 | |||||||||||||
Common Stock repurchased | (149) | (149) | ||||||||||||||
Net income | 359 | 359 | ||||||||||||||
Other comprehensive income (loss) | $ (71) | (71) | ||||||||||||||
Ending Balance (in shares) at Sep. 30, 2023 | 50,496,474 | 50,000,000 | ||||||||||||||
Ending Balance at Sep. 30, 2023 | $ 2,741 | $ 0 | $ 1,959 | $ (587) | $ 1,735 | $ (366) | ||||||||||
[1]As of September 30, 2023, the Company held 425,913 shares as treasury stock. |
Interim Condensed Consolidate_6
Interim Condensed Consolidated Statements of Equity (Parenthetical) | Sep. 30, 2023 shares |
Statement of Stockholders' Equity [Abstract] | |
Treasury stock, shares (in shares) | 425,913 |
Interim Condensed Consolidate_7
Interim Condensed Consolidated Statement of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operations: | ||
Net income | $ 822 | $ 317 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in earnings of unconsolidated entity | (3) | 1 |
Unrealized foreign currency losses, net | 498 | 265 |
Impairment of digital assets | 0 | 11 |
Depreciation and amortization | 389 | 281 |
Accrued interest income | (232) | (111) |
Non cash interest expense and amortization of debt issuance costs and other charges | 79 | 132 |
Provision for doubtful accounts | 751 | 845 |
Results on derivative instruments | 26 | 28 |
Stock-based compensation expense — restricted shares | 0 | 1 |
Long term retention program (“LTRP”) accrued compensation | 122 | 59 |
Deferred income taxes | (84) | (96) |
Changes in assets and liabilities: | ||
Accounts receivable | (46) | (27) |
Credit card receivables and other means of payments | (361) | (768) |
Prepaid expenses | (3) | (22) |
Inventories | (85) | 102 |
Other assets | (89) | (60) |
Payables and accrued expenses | 605 | 150 |
Funds payable to customers | 440 | 216 |
Amounts payable due to credit and debit card transactions | 255 | 77 |
Other liabilities | (85) | (87) |
Interest received from investments | 213 | 84 |
Net cash provided by operating activities | 3,212 | 1,398 |
Cash flows from investing activities: | ||
Purchases of investments | (15,540) | (9,266) |
Proceeds from sale and maturity of investments | 14,847 | 7,861 |
Payments from settlements of derivative instruments | (49) | (7) |
Purchases of intangibles assets | 0 | (1) |
Changes in loans receivable, net | (1,465) | (1,470) |
Investments of property and equipment | (329) | (342) |
Net cash used in investing activities | (2,536) | (3,225) |
Cash flows from financing activities: | ||
Proceeds from loans payable and other financial liabilities | 19,390 | 12,478 |
Payments on loans payable and other financing liabilities | (19,353) | (11,421) |
Payments of finance lease obligations | (21) | (14) |
Common Stock repurchased | (356) | (115) |
Net cash (used in) provided by financing activities | (340) | 928 |
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents | (443) | (221) |
Net decrease in cash, cash equivalents, restricted cash and cash equivalents | (107) | (1,120) |
Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period | 3,363 | 3,648 |
Cash, cash equivalents, restricted cash and cash equivalents, end of the period | $ 3,256 | $ 2,528 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in the state of Delaware, in the United States of America, in October 1999. MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of necessary digital and technology tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform, which allows users to buy and sell in most of Latin America. Through Mercado Pago, the fintech solution, MercadoLibre enables individuals and businesses to send and receive digital payments; through Mercado Envios, MercadoLibre facilitates the shipping of goods from the Company and sellers to buyers; through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their products and services on the web; through Mercado Shops, MercadoLibre allows users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model; through Mercado Credito, MercadoLibre extends loans to certain merchants and consumers; and through Mercado Fondo, MercadoLibre allows users to invest funds deposited in their Mercado Pago accounts. As of September 30, 2023, MercadoLibre, through its wholly-owned subsidiaries, operated online e-commerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates its fintech solution in Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador, and extends loans through Mercado Credito in Argentina, Brazil, Mexico and Chile. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia, Chile, Uruguay, Peru and Ecuador. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Basis of presentation The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). Investments in entities where the Company holds joint control, but not control, over the investee are accounted for using the equity method of accounting. These unaudited interim condensed consolidated financial statements are stated in U.S. dollars, except where otherwise indicated. Intercompany transactions and balances with subsidiaries have been eliminated for consolidation purposes. Substantially all net revenues, cost of net revenues and operating expenses are generated in the Company’s foreign operations. Long-lived assets, intangible assets and goodwill and operating lease right-of-use assets located in the foreign jurisdictions totaled $2,046 million and $1,817 million as of September 30, 2023 and December 31, 2022, respectively. These unaudited interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of September 30, 2023 and December 31, 2022. These unaudited interim condensed consolidated financial statements include the Company’s consolidated statements of income, comprehensive income and equity for the nine and three-month periods ended September 30, 2023 and 2022 and statements of cash flows for the nine-month periods ended September 30, 2023 and 2022. These unaudited interim condensed consolidated financial statements include all normal recurring adjustments that Management believes are necessary to fairly state the Company’s financial position, operating results and cash flows. Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) (the “Company’s 2022 10-K”). The Company has evaluated all subsequent events through the date these unaudited interim condensed consolidated financial statements were issued. The unaudited interim condensed consolidated statements of income, comprehensive income, equity and cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. For a more detailed discussion of the Company’s significant accounting policies, see Note 2 to the financial statements in the Company’s 2022 10-K. During the nine-month period ended September 30, 2023, there were no material updates made to the Company’s significant accounting policies. Use of estimates The preparation of these unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, accounting for allowance for doubtful accounts and chargeback provisions, inventories valuation reserves, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of short-term and long-term investments, impairment of long-lived assets, separation of lease and non lease components for aircraft leases, compensation costs relating to the Company’s long term retention program, fair value of convertible debt, fair value of investments, fair value of loans receivable, fair value of derivative instruments, income taxes and contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements. Actual results could differ from those estimates. Revenue recognition Revenue recognition criteria for the services provided and goods sold by the Company are described in Note 2 to the consolidated financial statements in the Company’s 2022 10-K. The aggregate gain included in “Fintech services” revenues arising from financing transactions and sales of financial assets, net of the costs recognized on sale of credit card receivables, is $1,055 million and $379 million for the nine and three-month periods ended September 30, 2023 and $751 million and $261 million for the nine and three-month periods ended September 30, 2022, respectively. Contract balances Timing of revenue recognition may differ from the timing of invoicing to customers. Receivables represent amounts invoiced and revenue recognized prior to invoicing when the Company has satisfied the performance obligation and has the unconditional right to payment. Accounts receivable and credit card receivables and other means of payments are presented net of allowance for doubtful accounts and chargebacks of $35 million and $25 million as of September 30, 2023 and December 31, 2022, respectively. See Note 6 of these unaudited interim condensed consolidated financial statements for information related to the allowance for doubtful accounts with respect to the Company’s loans receivable. Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period in accordance with Accounting Standards Codification (“ASC”) 606. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following months. Deferred revenue as of December 31, 2022 was $44 million, of which $29 million was recognized as revenue during the nine-month period ended September 30, 2023. As of September 30, 2023, total deferred revenue was $34 million, mainly due to fees related to classifieds advertising services billed and loyalty programs that are expected to be recognized as revenue in the coming months. Foreign currency translation All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Argentina, which has used the U.S. dollar as its functional currency since July 1, 2018. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from their local currencies into U.S. dollars by using period-end exchange rates while income and expense accounts are translated at the average monthly rates in effect during the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive income. Net foreign currency transaction results are included in the unaudited interim condensed consolidated statements of income under the caption “Foreign currency losses, net”. Argentine currency status As of July 1, 2018, the Company transitioned its Argentine operations to highly inflationary status in accordance with U.S. GAAP, and changed the functional currency for Argentine subsidiaries from Argentine Pesos to U.S. dollars, which is the functional currency of their immediate parent company. Argentina’s inflation rate for the nine-month periods ended September 30, 2023 and 2022 was 103.2% and 66.1%, respectively. The Company uses Argentina’s official exchange rate to account for transactions in the Argentine segment, which as of September 30, 2023 and December 31, 2022 was 349.95 and 177.16 Argentine Pesos, respectively, against the U.S. dollar. On August 14, 2023, Argentina’s local currency depreciated 22% against the U.S. dollar. reaching the official exchange rate of 349.95 Argentine Pesos. For the nine-month periods ended September 30, 2023 and 2022, Argentina’s depreciation of its local currency against the U.S. dollar was 97.5% and 43.4%, respectively. The following table sets forth the assets, liabilities and net assets of the Company’s Argentine subsidiaries and consolidated VIEs, before intercompany eliminations, as of September 30, 2023 and December 31, 2022: September 30, December 31, (In millions) Assets $ 3,936 $ 3,238 Liabilities 2,601 2,419 Net assets $ 1,335 $ 819 The following table provides information relating to net revenues and direct contribution (see Note 8 of these unaudited interim condensed consolidated financial statements for definition of direct contribution) for the nine and three-month periods ended September 30, 2023 and 2022 of the Company’s Argentine subsidiaries and consolidated VIEs: Nine Months Ended Three Months Ended 2023 2022 2023 2022 (In millions) (In millions) Net revenues $ 2,317 $ 1,787 $ 825 $ 675 Direct contribution 1,028 719 384 299 Argentine exchange regulations Since the second half of 2019, the Argentine government instituted exchange controls restricting the ability of companies and individuals to exchange Argentine Pesos for foreign currencies and their ability to remit foreign currency out of Argentina. An entity’s authorization request to the Central Bank of Argentina (“CBA”) to access the official exchange market to make foreign currency payments may be denied depending on the circumstances. As a result of these exchange controls, markets in Argentina developed trading mechanisms, in which an entity or individual buys U.S. dollar denominated securities in Argentina (i.e. shares, sovereign debt) using Argentine Pesos, and subsequently sells the securities for U.S. dollars, in Argentina, to access U.S. dollars locally, or outside Argentina, by transferring the securities abroad, prior to being sold (the latter commonly known as “Blue Chip Swap Rate”). The Blue Chip Swap Rate has diverged significantly from Argentina’s official exchange rate (commonly known as exchange spread). In recent years, the Blue Chip Swap Rate has been higher than Argentina’s official exchange rate. As of September 30, 2023 and December 31, 2022, the spread of the Blue Chip Swap was 135.0% and 94.2%, respectively (see Note 16 of these unaudited interim condensed consolidated financial statements). As part of the exchange controls, since 2019, the Argentine government imposes a tax on the acquisition of foreign currency through the official exchange market in certain circumstances. On July 24, 2023, through the Executive Power Decree No. 377/2023, the Argentine government extended the application of this tax to the following cases: (i) certain services acquired from abroad or services rendered by foreign residents in Argentina (i.e. technical, legal, accounting, management, advertising, engineering, audiovisual services, among others), which will be subject to a 25% tax rate, (ii) freight and other transportation services for import and export of goods, which will be subject to a 7.5% tax rate; and (iii) imported goods, which will be subject to a 7.5% tax rate, with certain exemptions (such as fuels and products of the basic food basket). Income taxes Income taxes’ accounting policy is described in Note 2 to the consolidated financial statements in the Company’s 2022 10-K. The Company’s consolidated estimated effective tax rate for the nine-month period ended September 30, 2023 increased as compared to the same period in 2022. This was a result of (i) taxable foreign exchange gains accounted for local tax purposes that are not recorded for accounting purposes since, under U.S. GAAP, Argentina’s operations’ functional currency is the U.S. dollar due to the highly inflationary status of the country, (ii) a higher proportion of pre-tax results arising from entities under general income tax treatment regime over the Brazilian segment as compared to the same period in 2022 and (iii) higher non-deductible foreign exchange losses related to the acquisition of our own common stock in the Argentine market. This increase was partially offset by the reversal of the valuation allowances in one of the Company’s Mexican subsidiaries during the third quarter of 2023. The Company’s consolidated estimated effective tax rate for the three-month period ended September 30, 2023 decreased as compared to the same period in 2022, mainly as a result of the reversal of the valuation allowances in one of its Mexican subsidiaries during the third quarter of 2023. This decrease was partially offset by taxable foreign exchange gains accounted for local tax purposes, which are not recorded for accounting purposes given that under U.S. GAAP and due to Argentina’s highly inflationary status, Argentina’s operations’ functional currency is the U.S. dollar. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. In accordance with ASC 740, Management periodically assesses the need to either establish or reverse a valuation allowance for deferred tax assets considering positive and negative objective evidence related to the realization of the deferred tax assets. In its assessment, Management considers, among other factors, the nature, frequency and magnitude of current and cumulative losses on an individual subsidiary basis, projections of future taxable income, the duration of statutory carryforward periods, as well as feasible tax planning strategies, which would be employed by the Company to prevent tax loss carryforwards from expiring unutilized. As of September 30, 2023, the Company’s Management concluded that an amount of $141 million of valuation allowance should be reversed at that date given that is more likely than not that deferred tax assets from DeRemate.com de México, S. de R.L. de C.V., a Mexican subsidiary, will be realized in the foreseeable future. The change in judgment regarding the realizability of the deferred tax assets of the Mexican subsidiary was triggered during the three-month period ended September 30, 2023, as positive trends observed in recent periods became enough evidence to support the conclusion. Knowledge-based economy promotional regime in Argentina In August 2021, the Under Secretariat of Knowledge Economy issued the Disposition 316/2021 approving MercadoLibre S.R.L.’s application for eligibility under the knowledge-based economy promotional regime, established by the Law No. 27,506 and complemented by Argentina’s Executive Power Decree No. 1034/2020, Argentina’s Ministry of Productive Development’s Resolution No. 4/2021 and the Under Secretariat of Knowledge Economy’s Disposition No. 11/2021. As a result, the Company recorded an income tax benefit of $35 million and $14 million, and $19 million and $15 million during the nine and three-month periods ended September 30, 2023 and 2022, respectively. The aggregate per share effect of the income tax benefit amounted to $0.69 and $0.27, and $0.38 and $0.30 for the nine and three-month periods ended September 30, 2023 and 2022, respectively. Furthermore, the Company recorded a social security benefit of $49 million and $16 million, and $39 million and $13 million during the nine and three-month periods ended September 30, 2023 and 2022, respectively. Fair value option applied to certain financial instruments Under ASC 825, U.S. GAAP provides an option to elect fair value with impact on the statement of income as an alternative measurement for certain financial instruments and other items on the balance sheet. The Company has elected to measure certain financial assets at fair value with impact on the statement of income for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in the unaudited interim condensed consolidated statement of income and unaudited interim condensed consolidated statement of comprehensive income and to better reflect the financial model applied for selected instruments. The Company’s election of the fair value option applies to the: i) Brazilian federal government bonds and ii) U.S. treasury notes. Recently Adopted Accounting Standards On October 28, 2021, the FASB issued the Accounting Standards Update (“ASU”) 2021-08 “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The amendments in this update improve comparability for the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by specifying for all acquired revenue contracts regardless of their timing of payment (1) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and (2) how to measure those contract assets and contract liabilities. The amendments provide consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The Company adopted this standard effective as of January 1, 2023 and it did not have a material impact on the Company’s financial statements. On March 31, 2022, the FASB issued the ASU 2022-02 “Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial Instruments – Credit Losses”, which eliminates the accounting guidance on TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the guidance requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases. The amendments should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company adopted this standard effective as of January 1, 2023 and it did not have a material impact on the Company’s financial statements. On September 29, 2022, the FASB issued the ASU 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The amendments in this update require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about their obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The Company adopted this standard effective as of January 1, 2023, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The guidance should be applied retrospectively to all periods in which a balance sheet is presented, except for the rollforward requirement, which should be applied prospectively. The Company and certain financial institutions participate in a supplier finance program (“SFP”) that enables certain of the Company’s suppliers, at their own election, to request the payment of their invoices to the financial institutions earlier than the terms stated in the Company’s payment policy. Suppliers’ voluntary inclusion of invoices in the SFP does not change the Company’s payment terms, the amounts paid or liquidity. The Company has no economic interest in a supplier’s decision to participate in the SFP and has no financial impact in connection with the SFP. As of September 30, 2023 and December 31, 2022, the obligations outstanding that the Company has confirmed as valid to the financial institutions amounted to $302 million and $227 million, respectively, and are included in the unaudited interim condensed consolidated balance sheets within accounts payable and accrued expenses line. Recently issued accounting pronouncements not yet adopted As of the date of issuance of these unaudited interim condensed consolidated financial statements there were no accounting pronouncements issued not yet adopted expected to have a material impact on the Company’s financial statements. |
Fintech Regulations
Fintech Regulations | 9 Months Ended |
Sep. 30, 2023 | |
Fintech Regulations [Abstract] | |
Fintech Regulations | Fintech Regulations Regulations issued by the Central Banks and other regulators of the countries where the Company operates applicable to its Fintech business are described in Note 3 to the consolidated financial statements in the Company’s 2022 10-K. Argentina On September 1, 2022, the CBA issued Communication “A” 7593, which extended the application of regulations for the protection of financial services users to the payment service providers who offer payment accounts (“PSPOCP” according to its Spanish acronym), such as MercadoLibre S.R.L. The regulations were already applicable to non-financial credit providers. This communication came into effect on March 1, 2023. On February 15, 2023, the CBA issued Communication “A” 7699, which establishes that PSPOCP must submit the Information Regime on Claims, with the first submission deadline being April 24, 2023, and the Information Regime on Transparency, Chapter II, with first submission deadline for monthly information being March 14, 2023. On August 24, 2023, the CBA issued Communication “A” 7825, which states that PSPOCPs must allocate in full to their clients any compensation received from financial institutions for investing clients’ funds held in deposit accounts into Argentine treasury bonds. Since August 25, 2023, MercadoLibre S.R.L. is not receiving any compensation from financial institutions for clients’ funds held in deposit account. As a consequence, Communication “A” 7825 has no applicable effect for MercadoLibre S.R.L. On September 14, 2023, the CBA issued Communication “A” 7861, establishing that starting on December 1, 2023, DEBIN (debit immediate), the main funding source of Mercado Pago users’ accounts, will be suspended and replaced with a pull transfer method that requires the consent of the client outside of Mercado Pago’s environment before the first use. Management is currently assessing the situation since this suspension and replacement may lead to pertinent changes to the way that Mercado Pago users are able to link and transfer funds to their digital accounts from their respective bank accounts or other digital accounts. Brazil The new prudential rules announced by the Central Bank during March 2022 were effective starting in July 2023, with full implementation by January 2025. The new rules require a gradual increase in regulatory capital requirement for the Company’s regulated Brazilian subsidiaries until 2025: 6.75% from July 2023, 8.75% from January 2024 and 10.50% from January 2025. Colombia On June 28, 2023, MercadoPago S.A. Compañía de Financiamiento obtained a license to operate as a financial institution in Colombia which enables it to offer financial deposits (digital accounts). The minimum capital requirement has been paid-in. This subsidiary is expected to be operational by the first quarter of 2024. Uruguay On July 11, 2023, the Central Bank of Uruguay approved MercadoPago Uruguay S.R.L. to start operations as an Electronic Money Issuing Institution (“IEDE” according to its Spanish acronym). On October 1, 2023, MercadoPago Uruguay S.R.L. started operations. Under applicable regulations, MercadoPago Uruguay S.R.L. must deposit and maintain users’ funds in specific local bank accounts in order to ensure availability of existing balances in each user’s digital account. Chile On April 27, 2023, the Commission for the Financial Market (“CMF” according to its Spanish acronym) authorized the merger of Mercado Pago Operadora S.A. (formerly known as “Mercado Pago S.A.”) and Red Procesadora de Pagos Limitada, effective on May 1, 2023. This merger allows Mercado Pago Operadora S.A. to extend the processing of transactions and enable businesses and entrepreneurs in Chile the opportunity to access the Company’s ecosystem of Fintech services. |
Net income per share
Net income per share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net income per share | Net income per share Basic earnings per share for the Company’s common stock is computed by dividing, net income for the period by the weighted average number of common shares outstanding during the period. In August, 2018, the Company issued an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (“2028 Notes”). The conversion of these notes is included in the calculation for diluted earnings per share utilizing the “if converted” method. Accordingly, conversion of these Notes is not assumed for purposes of computing diluted earnings per share if the effect is antidilutive. The denominator for diluted net income per share for the nine and three-month periods ended September 30, 2022 did not include any effect from the capped call transactions entered into by the Company with certain financial institutions with respect to shares of the Company’s common stock (“2028 Notes Capped Call Transactions”), which were settled on September 1, 2023, because it would be antidilutive. See Note 12 to these unaudited interim condensed consolidated financial statements and Note 17 to the financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K for more details regarding the 2028 Notes and the 2028 Notes Capped Call Transactions. Net income per share of common stock is as follows for the nine and three-month periods ended September 30, 2023 and 2022: Nine Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income per common share (*) $ 16.40 $ 16.36 $ 6.30 $ 6.29 $ 7.18 $ 7.16 $ 2.57 $ 2.56 Numerator (in millions): Net income $ 822 $ 822 $ 317 $ 317 $ 359 $ 359 $ 129 $ 129 Effect of dilutive 2028 Notes — 1 — 6 — — — 2 Net income available to common stock $ 822 $ 823 $ 317 $ 323 $ 359 $ 359 $ 129 $ 131 Denominator: Weighted average of common stock outstanding for earnings per share 50,137,826 50,137,826 50,365,813 50,365,813 50,008,320 50,008,320 50,325,075 50,325,075 Adjustment for assumed conversions — 201,119 — 990,268 — 201,119 — 990,268 Adjusted weighted average of common stock outstanding for earnings per share 50,137,826 50,338,945 50,365,813 51,356,081 50,008,320 50,209,439 50,325,075 51,315,343 |
Cash, cash equivalents, restric
Cash, cash equivalents, restricted cash and cash equivalents and investments | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash, cash equivalents, restricted cash and cash equivalents and investments | Cash, cash equivalents, restricted cash and cash equivalents and investments The composition of cash, cash equivalents, restricted cash and cash equivalents, short-term and long-term investments is as follows: September 30, 2023 December 31, 2022 (In millions) Cash and cash equivalents Cash in bank accounts $ 1,238 $ 1,160 Money market 764 599 Time deposits 169 130 U.S. government debt securities — 21 Total cash and cash equivalents $ 2,171 $ 1,910 Restricted cash and cash equivalents Securitization transactions (2) $ 281 $ 459 Foreign government debt securities (Central Bank of Brazil mandatory guarantee) (1) — 158 Bank account (Argentine Central Bank regulation) (1) 413 496 Bank account (Mexican National Banking and Securities Commission regulation) (1) 38 9 Time deposits (Mexican National Banking and Securities Commission regulation) (1) 264 239 Bank account (Chilean Commission for the Financial Market regulation) (1) 27 4 Time deposits (Chilean Commission for the Financial Market regulation) (1) 36 49 Money market (Secured lines of credit guarantee) 26 33 Bank account (Financial Superintendence of Colombia regulation) (1) — 1 Money market (Financial Superintendence of Colombia regulation) (1) — 5 Total restricted cash and cash equivalents $ 1,085 $ 1,453 Total cash, cash equivalents, restricted cash and cash equivalents (3) $ 3,256 $ 3,363 Short-term investments U.S. government debt securities $ 1,124 $ 558 Foreign government debt securities (Central Bank of Brazil mandatory guarantee) (1) 1,762 1,219 Foreign government debt securities (4) 94 123 Time deposits 326 439 Securitization transactions (2) 1 — Equity securities at fair value 13 $ — Total short-term investments $ 3,320 $ 2,339 Long-term investments U.S. government debt securities $ — $ 175 Foreign government debt securities (5) 67 70 Securitization transactions (2) 24 21 Equity securities held at cost 58 56 Total long-term investments $ 149 $ 322 (1) Regulations issued by the Central Banks and other regulators of the countries where the Company operates applicable to its Fintech business are described in Note 3 to the consolidated financial statements in the Company’s 2022 10-K. Recently issued regulations are described in Note 3 of these unaudited interim condensed consolidated financial statements. (2) Investments from securitization transactions are restricted to the payment of amounts due to third-party investors. (3) Cash, cash equivalents, restricted cash and cash equivalents as reported in the consolidated statement of cash flows. (4) As of September 30, 2023, this includes $6 million that guarantee a line of credit and are considered restricted. (5) On September 11, 2023, the Brazilian subsidiary Mercado Crédito Sociedade de Crédito, Financiamento e Investimento S.A. received $15 million of capital contribution from its shareholders, which is in the process of legal registration by the Central Bank of Brazil. As a result, $15 million of long-term investments are considered restricted as of September 30, 2023 . |
Loans receivable, net
Loans receivable, net | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Loans receivable, net | Loans receivable, net The Company classifies loans receivable as “On-line merchant”, “Consumer”, “In-store merchant” and “Credit cards”. As of September 30, 2023 and December 31, 2022, the components of Loans receivable, net were as follows: September 30, 2023 Loans receivable Allowance for doubtful accounts Loans receivable, net (In millions) On-line merchant $ 418 $ (120) $ 298 Consumer 1,827 (573) 1,254 In-store merchant 294 (127) 167 Credit cards 863 (204) 659 Total $ 3,402 $ (1,024) $ 2,378 December 31, 2022 Loans receivable Allowance for doubtful accounts Loans receivable, net (In millions) On-line merchant $ 394 $ (120) $ 274 Consumer 1,568 (614) 954 In-store merchant 267 (145) 122 Credit cards 611 (225) 386 Total $ 2,840 $ (1,104) $ 1,736 The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $1,038 million and $1,112 million as of September 30, 2023 and December 31, 2022, respectively, which includes $14 million and $8 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the unaudited interim condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023, the Company is exposed to off-balance sheet unused agreed loan commitments on its credit cards portfolio, which exposes the Company to credit risks. For the nine and three-month periods ended September 30, 2023, the Company recognized in Provision for doubtful accounts of $5 million and $2 million as expected credit losses, respectively. 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 Mercado Credito 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 the number of transactions in the Company’s ecosystem and the 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, 2023 December 31, 2022 (In millions) 1-30 days past due $ 183 $ 118 31-60 days past due 98 88 61-90 days past due 78 86 91-120 days past due 83 103 121-150 days past due 81 110 151-180 days past due 73 112 181-210 days past due 69 100 211-240 days past due 74 93 241-270 days past due 71 89 271-300 days past due 72 73 301-330 days past due 82 85 331-360 days past due 84 75 Total past due 1,048 1,132 To become due 2,354 1,708 Total $ 3,402 $ 2,840 The following tables summarize the allowance for doubtful accounts activity during the nine-month periods ended September 30, 2023 and 2022: September 30, 2023 On-line merchant Consumer In-store merchant Credit cards Total (In millions) Balance at beginning of year $ 120 $ 614 $ 145 $ 225 $ 1,104 Net charged to Net Income 81 417 93 140 731 Currency translation adjustments 3 9 — 10 22 Write-offs (*) (84) (467) (111) (171) (833) Balance at end of period $ 120 $ 573 $ 127 $ 204 $ 1,024 September 30, 2022 On-line merchant Consumer In-store merchant Credit cards Total (In millions) Balance at beginning of year $ 79 $ 232 $ 76 $ 48 $ 435 Net charged to Net Income 83 457 111 191 842 Currency translation adjustments (2) (19) (3) (9) (33) Write-offs (*) (48) (133) (48) (7) (236) Balance at end of period $ 112 $ 537 $ 136 $ 223 $ 1,008 (*) The Company writes off loans when customer balance becomes 360 days past due. The increase in write-offs for the nine-month period ended September 30, 2023, compared to the same period in 2022, is mainly generated by higher originations of loans receivable for the nine-month period ended September 30, 2022, compared to the same period in 2021, generating a higher write-offs effect in the period ended September 30, 2023. |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | . Goodwill and intangible assets Intangible assets The composition of goodwill and intangible assets is as follows: September 30, 2023 December 31, 2022 (In millions) Goodwill $ 159 $ 153 Intangible assets with indefinite lives - Trademarks 3 4 ' - Digital assets (1) 9 9 Amortizable intangible assets - Licenses and others 14 13 - Non-compete agreements 4 4 - Customer lists 12 12 - Trademarks 13 12 - Hubs network 4 4 - Others 3 3 Total intangible assets $ 62 $ 61 Accumulated amortization (41) (36) Total intangible assets, net $ 21 $ 25 (1) Digital assets are net of $21 million of impairment losses as of both September 30, 2023 and December 31, 2022. Goodwill The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2023 and the year ended December 31, 2022 are as follows: Nine Months Ended September 30, 2023 Brazil Argentina Mexico Chile Colombia Other countries Total (In millions) Balance, beginning of the period $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153 Effect of exchange rates changes 2 — 5 (2) 1 — 6 Balance, end of the period $ 62 $ 10 $ 44 $ 35 $ 6 $ 2 $ 159 Year Ended December 31, 2022 Brazil Argentina Mexico Chile Colombia Other countries Total (In millions) Balance, beginning of the period $ 56 $ 10 $ 37 $ 37 $ 6 $ 2 $ 148 Effect of exchange rates changes 4 — 2 — (1) — 5 Balance, end of the period $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153 Amortizable intangible assets 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, 2023 and 2022 amounted to $4 million and $4 million, respectively, while aggregate amortization expense for intangible assets totaled $1 million and $1 million for the three-month periods ended September 30, 2023 and 2022, respectively. The following table summarizes the remaining amortization of intangible assets (in millions of U.S. dollars) with definite useful life as of September 30, 2023: For year to be ended December 31, 2023 $ 1 For year to be ended December 31, 2024 3 For year to be ended December 31, 2025 1 For year to be ended December 31, 2026 1 Thereafter 3 $ 9 |
Segment reporting
Segment reporting | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment reporting | Segment reporting 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 from external customers less direct costs, which include costs of net revenues, 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: Nine Months Ended September 30, 2023 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 5,365 $ 2,317 $ 2,066 $ 464 $ 10,212 Direct costs (4,027) (1,289) (1,593) (429) (7,338) Direct contribution 1,338 1,028 473 35 2,874 Operating expenses and indirect costs of net revenues (1,291) Income from operations 1,583 Other income (expenses): Interest income and other financial gains 545 Interest expense and other financial losses (297) Foreign currency losses, net (508) Net income before income tax expense and equity in earnings of unconsolidated entity $ 1,323 Nine Months Ended September 30, 2022 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 4,134 $ 1,787 $ 1,257 $ 357 $ 7,535 Direct costs (3,472) (1,068) (1,075) (348) (5,963) Direct contribution 662 719 182 9 1,572 Operating expenses and indirect costs of net revenues (887) Income from operations 685 Other income (expenses): Interest income and other financial gains 142 Interest expense and other financial losses (221) Foreign currency losses, net (134) Net income before income tax expense and equity in earnings of unconsolidated entity $ 472 Three Months Ended September 30, 2023 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 2,006 $ 825 $ 772 $ 157 $ 3,760 Direct costs (1,435) (441) (605) (150) (2,631) Direct contribution 571 384 167 7 1,129 Operating expenses and indirect costs of net revenues (444) Income from operations 685 Other income (expenses): Interest income and other financial gains 196 Interest expense and other financial losses (111) Foreign currency losses, net (239) Net income before income tax expense and equity in earnings of unconsolidated entity $ 531 Three Months Ended September 30, 2022 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 1,431 $ 675 $ 465 $ 119 $ 2,690 Direct costs (1,209) (376) (384) (121) (2,090) Direct contribution 222 299 81 (2) 600 Operating expenses and indirect costs of net revenues (304) Income from operations 296 Other income (expenses): Interest income and other financial gains 65 Interest expense and other financial losses (92) Foreign currency losses, net (71) Net income before income tax expense and equity in earnings of unconsolidated entity $ 198 The following tables summarize net revenues per reporting segment, which have been disaggregated by similar products and services for the nine and three-month periods ended September 30, 2023 and 2022: Nine Months Ended September 30, Brazil Argentina Mexico Other Countries Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 (In millions) Commerce services (a) $ 2,615 $ 1,877 $ 727 $ 602 $ 1,160 $ 702 $ 293 $ 234 $ 4,795 $ 3,415 Commerce products sales (b) 552 344 158 198 212 161 23 29 945 732 Total commerce revenues $ 3,167 $ 2,221 $ 885 $ 800 $ 1,372 $ 863 $ 316 $ 263 $ 5,740 $ 4,147 Fintech services (c) 1,375 1,059 927 636 198 97 134 86 2,634 1,878 Credit revenues (d) 808 833 502 347 489 291 5 2 1,804 1,473 Fintech products sales (e) 15 21 3 4 7 6 9 6 34 37 Total fintech revenues $ 2,198 $ 1,913 $ 1,432 $ 987 $ 694 $ 394 $ 148 $ 94 $ 4,472 $ 3,388 Total net revenues $ 5,365 $ 4,134 $ 2,317 $ 1,787 $ 2,066 $ 1,257 $ 464 $ 357 $ 10,212 $ 7,535 Three Months Ended September 30, Brazil Argentina Mexico Other Countries Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 (In millions) Commerce services (a) $ 1,007 $ 669 $ 260 $ 221 $ 429 $ 257 $ 100 $ 76 $ 1,796 $ 1,223 Commerce products sales (b) 204 111 50 69 70 54 8 8 332 242 Total commerce revenues $ 1,211 $ 780 $ 310 $ 290 $ 499 $ 311 $ 108 $ 84 $ 2,128 $ 1,465 Fintech services (c) 487 357 344 245 75 38 45 32 951 672 Credit revenues (d) 304 287 171 139 195 115 2 1 672 542 Fintech products sales (e) 4 7 — 1 3 1 2 2 9 11 Total fintech revenues $ 795 $ 651 $ 515 $ 385 $ 273 $ 154 $ 49 $ 35 $ 1,632 $ 1,225 Total net revenues $ 2,006 $ 1,431 $ 825 $ 675 $ 772 $ 465 $ 157 $ 119 $ 3,760 $ 2,690 (a) Includes final value fees paid by sellers derived from intermediation services and related shipping and storage fees, classified fees derived from classified advertising services and ad sales. (b) Includes revenues from inventory sales and related shipping fees. (c) Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution, 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, Mercado Pago credit and debit card fees and insurtech fees. (d) Includes interest earned on loans and advances granted to merchants and consumers, and interest earned on Mercado Pago credit card transactions. (e) Includes sales of mobile point of sales devices. The following table summarizes the allocation of property and equipment, net based on geography: September 30, 2023 December 31, 2022 (In millions) US property and equipment, net $ 2 $ 1 Property and equipment, net Argentina 199 188 Brazil 527 514 Mexico 267 206 Other countries 86 84 $ 1,079 $ 992 Total property and equipment, net $ 1,081 $ 993 The following table summarizes the allocation of the operating lease right-of-use assets based on geography: September 30, 2023 December 31, 2022 (In millions) Argentina $ 49 $ 53 Brazil 349 286 Mexico 330 245 Other countries 68 72 Total operating lease right-of-use assets $ 796 $ 656 The following table summarizes the allocation of the goodwill and intangible assets based on geography: September 30, 2023 December 31, 2022 (In millions) US intangible assets, net $ 9 $ 9 Goodwill and intangible assets, net Argentina 13 14 Brazil 66 63 Mexico 44 40 Other countries 48 52 $ 171 $ 169 Total goodwill and intangible assets, net $ 180 $ 178 |
Fair value measurement of asset
Fair value measurement of assets and liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement of assets and liabilities | 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, 2023 and December 31, 2022: Description Balances as of Quoted Prices in Significant other Unobservable Balances as of Quoted Prices in Significant other Unobservable (In millions) Assets Cash and Cash Equivalents: Money Market $ 764 $ 764 $ — $ — $ 599 $ 599 $ — $ — U.S. government debt securities (1) — — — — 21 21 — — Restricted Cash and Cash Equivalents: Money Market (3) 219 219 — — 352 352 — — Foreign government debt securities (Central Bank of Brazil Mandatory Guarantee) (1) — — — — 158 158 — — Investments: U.S. government debt securities (1) 1,124 1,124 — — 733 733 — — Foreign government debt securities (Central Bank of Brazil Mandatory Guarantee) (1) 1,762 1,762 — — 1,219 1,219 — — Foreign government debt securities (1) (2) 186 186 — — 214 214 — — Equity securities at fair value 13 13 — — — — — — Other Assets: Derivative Instruments 16 — 16 — 1 — 1 — USDC — — — — 3 3 — — Customer crypto-assets safeguarding assets 21 — 21 — 15 — 15 — Total Assets $ 4,105 $ 4,068 $ 37 $ — $ 3,315 $ 3,299 $ 16 $ — Liabilities: Long-term retention program $ 74 $ — $ 74 $ — $ 58 $ — $ 58 $ — Other Liabilities: Contingent considerations — — — — 8 — — 8 Derivative Instruments 18 — 18 — 24 — 24 — Customer crypto-assets safeguarding liabilities 21 — 21 — 15 — 15 — Total Liabilities $ 113 $ — $ 113 $ — $ 105 $ — $ 97 $ 8 (1) Measured at fair value with impact on the statement of income for the application of the fair value option. (See Note 2 – Fair value option applied to certain financial instruments). (2) As of September 30, 2023 and December 31, 2022 includes $25 million and $21 million, respectively, of investments from securitization transactions that are restricted to the payment of amounts due to third-party investors. (See Note 5 - Cash, cash equivalents, restricted cash and cash equivalents and investments). (3) As of September 30, 2023 and December 31, 2022 includes $193 million and $314 million, respectively, of money market funds from securitization transactions. (See Note 5 - Cash, cash equivalents, restricted cash and cash equivalents and investments). As of September 30, 2023 and December 31, 2022, 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. The unobservable inputs of the fair value of contingent considerations classified as Level 3 refer to the amounts to be paid according to the respective agreements of each acquisition, the likelihood of achievement of the performance targets arising from each one (expected to be 100%), and the Company’s historical experience with similar arrangements. Reasonable variation on those unobservable inputs would not significantly change the fair value of those instruments. As of September 30, 2023 and December 31, 2022, the Company had not changed the methodology nor the assumptions used to estimate the fair value of the financial instruments. There were no transfers to and from Levels 1, 2 and 3 during the nine-month period ended September 30, 2023. There were no transfers to and from Levels 1, 2 and 3 during the year ended December 31, 2022, other than as detailed in the table below. As of September 30, 2023, the contingent considerations measured at fair value using Level 3 inputs were settled. The following table summarizes the reconciliation of the financial liabilities measured at fair value using Level 3 inputs as of December 31, 2022: Year Ended December 31, 2022 Derivative Instruments, net Contingent Considerations (In millions) Balance, beginning of the year $ 11 $ (9) Net Additions 3 — Settlements 7 1 Foreign Currency Translation (5) — Gain (Losses) in Other Comprehensive Income (15) — Gain (Losses) on Income Statement (28) — Transfers out of level 3 to level 2 27 — Balance, end of the year $ — $ (8) The Company’s election of the fair value option applies to the: i) Brazilian federal government bonds and ii) U.S. treasury notes. The Company recognized fair value changes in interest income and other financial gains which includes the related interest income of those instruments. Such fair value changes and interest income amount to $195 million and $81 million, and $104 million and $42 million for the nine and three-month periods ended September 30, 2023 and 2022, respectively. As of September 30, 2023 and December 31, 2022, the Company held no debt securities classified as available for sale. However, during the year ended December 31, 2022, the Company purchased and sold all the corporate debt securities classified as available for sale, resulting in $156 million of proceeds from the sales and in gross realized gains less than $1 million. The cost of these securities was determined under a specific identification basis. Financial assets and liabilities not measured and recorded at fair value The following table summarizes the estimated fair value of the financial assets and liabilities of the Company not measured at fair value as of September 30, 2023 and December 31, 2022: Balances as of Estimated fair value as of September 30, 2023 Balances as of Estimated fair value as of December 31, 2022 (In millions) Assets Cash and cash equivalents $ 1,407 $ 1,407 $ 1,290 $ 1,290 Restricted cash and cash equivalents 866 866 943 943 Investments 326 326 439 439 Accounts receivables, net 161 161 130 130 Credit card receivables and other means of payment, net 3,375 3,375 2,946 2,946 Loans receivable, net 2,378 2,387 1,736 1,761 Other assets 395 395 273 273 Total Assets $ 8,908 $ 8,917 $ 7,757 $ 7,782 Liabilities Accounts payable and accrued expenses $ 1,910 $ 1,910 $ 1,393 $ 1,393 Funds payable to customers 4,016 4,016 3,454 3,454 Amounts payable due to credit and debit card transactions 757 757 488 488 Salaries and social security payable 445 445 349 349 Loans payable and other financial liabilities 4,454 4,486 4,758 4,997 Other liabilities 206 206 186 186 Total Liabilities $ 11,788 $ 11,820 $ 10,628 $ 10,867 As of September 30, 2023 and December 31, 2022, the carrying value of the Company’s financial assets (except for loans receivable and equity securities held at cost) not measured at fair value approximated their fair value mainly because of their short-term maturity. If these financial assets were measured at fair value in the financial statements, cash and restricted cash would be classified as Level 1 (where cost and fair value are aligned) and the remaining financial assets would be classified as Level 2. The estimated fair value of the loans receivable would be classified as Level 3 based on the Company’s assumptions. As of September 30, 2023 and December 31, 2022, the carrying value of the Company’s financial liabilities (except for 2028 Notes, 2026 Sustainability Notes and 2031 Notes) not measured at fair value approximated their fair value mainly because of their short-term maturity and the effective interest rates are not materially different from market interest rates. If these financial liabilities were measured at fair value in the financial statements, these would be classified as Level 2. As of September 30, 2023 and December 31, 2022, the estimated fair value of the 2026 Sustainability Notes and 2031 Notes would be $365 million and $359 million, and $553 million and $541 million, respectively, based on Level 2 inputs. Also, as of September 30, 2023 and December 31, 2022, the estimated fair value of the 2028 Notes would be $255 million and $884 million, respectively, and would be classified as Level 2 based on the closing trading price per $100 principal amount of the 2028 Notes as of the last day of trading for the period. The fair value of the 2028 Notes is primarily affected by the trading price of the Company’s common stock and market interest rates. Based on the $1,267.88 closing price of the Company’s common stock on September 30, 2023, the if-converted value of the 2028 Notes exceeded their principal amount by $167 million. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Other Legal Matters The Company is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it considers it probable that future costs will be incurred and such costs can be reasonably estimated. Proceeding-related liabilities are based on developments to date and historical information related to actions filed against the Company. As of September 30, 2023, the Company had accounted for estimated liabilities involving proceeding-related contingencies and other estimated contingencies of $72 million to cover legal actions against the Company in which Management has assessed the likelihood of a final adverse outcome as probable. Expected legal costs related to litigations are accrued when the legal service is actually provided. In addition, as of September 30, 2023, 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 $480 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 2022 10-K. Tax Claims Interstate rate of ICMS-DIFAL on interstate sales 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 2022 10-K. In April 2023, and based on court authorization, the Company withdrew the deposits corresponding to the case related to the State of Santa Catarina, which had become final and unappealable in September 2022 in favor of eBazar.com.br Ltda. In June 2023, the case related to the State of Goiás (whose risk of losing had been considered remote), reached a final and unappealable judgment in favor of eBazar.com.br Ltda. and Mercado Pago Instituição de Pagamento Ltda., and the companies will withdraw the deposits corresponding to the case as soon as the court authorization is granted. In August 2023, one of the cases related to the State of Bahia (whose risk of losing had been considered probable), reached a final and unappealable judgment in favor of the State. Finally, in September 2023, one of the cases related to the State of Rio de Janeiro (whose risk of losing had been considered probable), reached a final and unappealable judgment in favor of the State. The remaining cases pending as of December 31, 2022 had no updates during the nine-month period ended September 30, 2023 . The Company maintains a $3 million provision as of September 30, 2023 for the disputed amounts related to the 4 on going cases whose risk of losing is considered by Management to be probable, based on the opinion of external legal counsel. In addition, with respect to the tax claims related to the interstate rate of ICMS-DIFAL on interstate sales under the supplementary Law No. 190/22, as described in Note 15 to the consolidated financial statements in the Company’s 2022 10-K, the Brazilian Supreme Court has announced that it expects to make a judgment regarding the constitutionality of the supplementary Law on November 22, 2023. Exclusion of ICMS tax benefits from PIS and COFINS tax base The Company receives ICMS tax benefits from the State of Minas Gerais, Brazil, granted through a special regime signed with the State by means of a term of agreement, which are aimed at implementing and expanding business in the State. The Company accounted for the tax benefit netting cost of net revenues for the nine and three-month periods ended September 30, 2023, for $44 million and $16 million, respectively, and for the nine and three-month periods ended September 30, 2022, for $25 million and $8 million, respectively. On April 25, 2023, the Company filed a writ of mandamus seeking an injunction and claiming the exclusion of the amounts relating to the ICMS tax benefits granted by the State of Minas Gerais in the tax base of the Social Contributions (PIS and COFINS). On May 26, 2023, a decision was rendered granting the injunction requested. The Company is currently waiting for the final judicial decision. 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 accounted for $9 million for PIS and COFINS tax benefits arising from the ICMS tax incentives during the nine-month period ended September 30, 2023, considering the exchange rate as of September 30, 2023, of which $2 million corresponded to the period ended December 31, 2021, and $3 million corresponded to the period ended December 31, 2022. Marketplace joint and several liability In the context of intermediation transactions on the marketplace platform, the Brazilian subsidiary eBazar.com.br Ltda. received tax assessments aimed at collecting alleged ICMS debts for the 2017 to 2019 fiscal years, in the amount of $8 million, considering the exchange rate as of September 30, 2023. The tax assessment intends to attribute to eBazar.com.br Ltda. the joint and several liability for the payment of ICMS allegedly due by sellers on the sale of goods without compliant invoices. The Company presented its objection in August 2023. 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. Buyer protection program The buyer protection program (“BPP”) is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance. The Company’s BPP provides protection to consumers by reimbursing them for the total value of a purchased item and the value of any shipping service paid if it does not arrive, arrives incomplete or damaged, does not match the seller’s description or if the buyer regrets the purchase. The Company is entitled to recover from the third-party carrier companies performing the shipping service certain amounts paid under the BPP. Furthermore, in some specific circumstances, the Company enters into insurance contracts with third-party insurance companies in order to cover contingencies that may arise from the BPP. The maximum potential exposure under this program is estimated to be the volume of payments on the Marketplace, for which claims may be made under the terms and conditions of the Company’s BPP. Based on historical losses to date, the Company does not believe that the maximum potential exposure is representative of the actual potential exposure. The Company records a liability with respect to losses under this program when they are probable and the amount can be reasonably estimated. As of September 30, 2023 and December 31, 2022, Management’s estimate of the maximum potential exposure related to the Company’s buyer protection program is $4,364 million and $4,002 million, respectively, for which the Company recorded a provision of $5 million and $6 million, respectively. Commitments The Company committed to purchase cloud platform services from two U.S. suppliers based on the following terms: a) for a total amount of $824 million, to be paid between October 1, 2021 and September 30, 2026. As of September 30, 2023, the Company had paid $342 million; and b) for a total amount of $200 million, to be paid between September 23, 2022 and September 23, 2025. As of September 30, 2023, the Company had paid $51 million. On April 8, 2022, the Company signed a 10-year agreement with Gol Linhas Aereas S.A. under which the Company is committed to contract a minimum amount of air logistics services for a total annual cost of $43 million (total amount once all the dedicated aircraft are in operation). Pursuant to the agreement, Gol Linhas Aereas S.A. provides logistics services in Brazil to Mercado Envios through six dedicated aircraft, five of which have already started operations as of September 30, 2023. In connection with the closing of MELI Kaszek Pioneer Corp’s (“MEKA”) initial public offering on October 1, 2021, MEKA (a special purpose acquisition company sponsored by MELI Kaszek Pioneer Sponsor LLC (the “Sponsor”), which is a joint venture between Company’s subsidiary MELI Capital Ventures LLC and Kaszek Ventures Opportunity II, L.P.) entered into a forward purchase agreement with the Sponsor, pursuant to which the Sponsor committed to purchase from MEKA 5 million Class A ordinary shares at a price of $10 per share in a private placement to close substantially concurrently with the consummation of MEKA’s initial business combination. MEKA will be deemed to be dissolved on January 2, 2024, resulting in the extinguishment of this commitment. |
Long term retention program ("L
Long term retention program ("LTRP") | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Long term retention program ("LTRP") | Long term retention program (“LTRP”) The following table summarizes the long term retention program accrued compensation expense for the nine and three-month periods ended September 30, 2023 and 2022, which are payable in cash according to the decisions made by the Board of Directors (the “Board”): Nine Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 (In millions) (In millions) LTRP 2017 $ — $ (3) $ — $ 1 LTRP 2018 3 (2) 1 1 LTRP 2019 13 12 4 5 LTRP 2020 15 14 5 5 LTRP 2021 17 16 5 5 LTRP 2022 31 22 9 7 LTRP 2023 43 — 15 — Total LTRP $ 122 $ 59 $ 39 $ 24 |
Loans payable and other financi
Loans payable and other financial liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Loans payable and other financial liabilities | Loans payable and other financial liabilities The following tables summarize the Company’s Loans payable and other financial liabilities as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (In millions) Current loans payable and other financial liabilities: Loans from banks $ 489 $ 319 Bank overdrafts — 9 Secured lines of credit 94 115 Financial Bills — 113 Deposit Certificates 901 993 Commercial Notes 2 6 Finance lease obligations 20 14 Collateralized debt 664 535 2028 Notes 87 3 2026 Sustainability Notes 2 4 2031 Notes 4 10 Other lines of credit 9 10 $ 2,272 $ 2,131 Non-Current loans payable and other financial liabilities: Loans from banks $ 90 $ 145 Secured lines of credit 19 24 Financial Bills 8 — Deposit Certificates — 3 Commercial Notes 202 187 Finance lease obligations 40 37 Collateralized debt 774 703 2028 Notes — 436 2026 Sustainability Notes 397 398 2031 Notes 651 694 Other lines of credit 1 — $ 2,182 $ 2,627 Type of instrument Currency Interest Weighted Average Interest Rate Maturity September 30, 2023 December 31, 2022 (In millions) Loans from banks Chilean Subsidiaries Chilean Pesos Fixed 9.99 % October 2023 - April 2025 $ 102 $ 150 Brazilian Subsidiary (*) US Dollar Fixed 5.75 % November 2023 52 — Brazilian Subsidiary (*) US Dollar — — % — — 59 Brazilian Subsidiary (*) US Dollar Fixed 5.91 % August 2024 162 — Brazilian Subsidiary Brazilian Reais Variable TJLP + 0.8 % October 2023 - May 2031 9 9 Mexican Subsidiary Mexican Pesos Variable TIIE + 2.20 - 3.50 % October 2023 - June 2027 192 177 Uruguayan Subsidiary Uruguayan Pesos Fixed 9.90 % October 2023 48 47 Colombian Subsidiary Colombian Pesos Fixed 13.98 % November 2023 14 22 Bank overdrafts Uruguayan Subsidiary Uruguayan Pesos — — % — — 9 Secured lines of credit Argentine Subsidiaries Argentine Pesos Fixed 103.12 % October 2023 84 107 Mexican Subsidiary Mexican Pesos Fixed 10.17 % October 2023 - July 2027 29 32 Financial Bills Brazilian Subsidiary Brazilian Reais Variable CDI + 1.15 - 1.40 % March - June 2025 8 113 Deposit Certificates Brazilian Subsidiary Brazilian Reais — — % — — 272 Brazilian Subsidiary Brazilian Reais Variable 100% to 140% of CDI October 2023 - September 2024 769 565 Brazilian Subsidiary Brazilian Reais Fixed 11.90 - 14.40 % October 2023 - April 2024 92 114 Brazilian Subsidiary Brazilian Reais Variable 106.50% of CDI November 2023 40 45 Commercial Notes Brazilian Subsidiary Brazilian Reais Variable DI + 0.88 % October 2023 - August 2027 72 71 Brazilian Subsidiary Brazilian Reais Variable IPCA + 6.41 % October 2023 - August 2029 132 122 Finance lease obligations 60 51 Collateralized debt 1,438 1,238 2028 Notes US Dollar Fixed 2.00 % October - November 2023 87 439 2026 Sustainability Notes US Dollar Fixed 2.375 % January 2024 - January 2026 399 402 2031 Notes US Dollar Fixed 3.125 % January 2024 - January 2031 655 704 Other lines of credit 10 10 $ 4,454 $ 4,758 (*) The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge accounting. See Note 15 "Derivative instruments" for further detail. See Notes 13 and 14 to these unaudited interim condensed consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease obligations, respectively. 2.375% Sustainability Senior Notes Due 2026 and 3.125% Senior Notes Due 2031 On January 14, 2021, the Company closed a public offering of $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 together with the 2026 Sustainability Notes, the “Notes”). In May 2023, the Company repurchased a $2 million and $44 million principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively. The total amount paid amounted to $38 million. For the nine-month periods ended September 30, 2023, the Company recognized $8 million as a gain in Interest income and other financial gains in the unaudited interim condensed consolidated statements of income. For additional information regarding the 2026 Sustainability Notes and the 2031 Notes please refer to Note 17 to the audited consolidated financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K. 2.00% Convertible Senior Notes Due 2028 (“2028 Notes”) On September 19, 2023, the Company announced its intention to redeem all its 2028 Notes on November 14, 2023. Holders of the 2028 Notes may elect to convert their notes at any time before November 13, 2023. Each $1,000 principal amount of 2028 Notes is convertible into 2.2952 shares of MercadoLibre common stock. This conversion rate reflects an increase of 0.0399 additional shares per $1,000 principal amount of 2028 Notes above the otherwise applicable conversion rate, which applies because the notes have been called for redemption. The Company settles any conversions solely in shares of common stock, except that any fractional shares that would otherwise be deliverable are paid out in cash. The redemption price to be paid for any notes that are not converted will be 100% of the redeemed notes’ principal amount plus accrued and unpaid interest up to, but excluding, the redemption date. As of September 30, 2023, holders of the 2028 Notes converted $351 million principal amount of 2028 Notes into 806,629 shares of the Company’s common stock which MercadoLibre held as treasury stock. As of September 30, 2023, these 2028 Notes conversions generated a non-cash transaction of $350 million. As of the date of issuance of these unaudited interim condensed consolidated financial statements, $379 million principal amount of 2028 Notes were converted into 869,692 shares of the Company’s common stock. After all 2028 Notes’ conversions mentioned, the outstanding principal amount of 2028 Notes is $60 million. The Company entered into 2028 Notes Capped Call Transactions. The settlement averaging period with respect to the 2028 Notes Capped Call Transactions began on June 28, 2023 and ended on August 30, 2023, and the 2028 Notes Capped Call Transactions settlement date was September 1, 2023. As a result the Company received 289,675 shares of common stock. As of September 30, 2023, the principal and issuance costs of the 2028 Notes amounted to $88 million and $1 million, respectively. As of December 31, 2022, the principal and issuance costs of the 2028 Notes amounted to $439 million and $3 million, respectively. For the nine and three-month periods ended September 30, 2023 and 2022, the Company recognized interest expense, including the amortization of issuance costs of $7 million and $2 million, in both periods, respectively. For additional information regarding the 2028 Notes and the 2028 Notes Capped Call Transactions please refer to Note 17 to the audited consolidated financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K. Revolving Credit Agreement On March 31, 2022, the Company, as borrower, and certain of its Subsidiaries, as guarantors, entered into a $400 million revolving credit agreement. For additional information regarding the Credit Agreement please refer to Note 17 to the audited consolidated financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K. |
Securitization Transactions
Securitization Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Securitization Transactions [Abstract] | |
Securitization Transactions | Securitization Transactions The process of securitization consists of the issuance of securities collateralized by a pool of assets through a special purpose entity (“SPEs”), often under a VIE. The Company securitizes financial assets associated with its credit card receivables and loans receivable portfolio. The Company’s securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote SPEs. The Company generally retains economic interests in the collateralized securitization transactions, which are retained in the form of subordinated interests. For accounting purposes, the Company is generally precluded from recording the transfers of assets in securitization transactions as sales or is required to consolidate the SPE. The Company securitizes certain credit card receivables related to users’ purchases through Chilean SPEs. Under the SPE contracts, the Company has determined that it has no obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it does not retain any equity certificate of participation or subordinated interest in the SPEs. As the Company does not control the vehicles, its assets, liabilities and related results are not consolidated in the Company’s financial statements. Additionally, the Company securitizes certain credit card receivables related to users’ purchases through Brazilian SPEs. Under the SPE contracts, the Company has determined that it has the obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it retains subordinated interest in the SPEs. As the Company controls the vehicles, the assets, liabilities and related results are consolidated in its financial statements. The Company securitizes certain loans receivable through Brazilian, Argentine and Mexican SPEs, formed to securitize loans receivable provided by the Company to its users or purchased from financial institutions that grant loans to the Company’s users through Mercado Pago. According to the SPE contracts, the Company has determined that it has both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant because it retains the equity certificates of participation and would therefore also be consolidated. When the Company controls the vehicle, it accounts for the securitization transactions as if they were secured financing and therefore the assets, liabilities and related results are consolidated in its financial statements. The following table summarizes the Company’s collateralized debt under securitization transactions, as of September 30, 2023: SPEs Collateralized debt as of September 30, 2023 Interest rate Currency Maturity Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados $ 201 CDI + 2.50% Brazilian Reais May 2025 Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado 13 CDI + 3.50% Brazilian Reais August 2025 Olimpia Fundo de Investimento Em Direitos Creditórios 105 CDI + 1.25% Brazilian Reais November 2024 Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados 125 CDI + 2.35% Brazilian Reais January 2030 Seller Fundo De Investimento Em Direitos Creditórios 208 CDI + 1.60% Brazilian Reais March 2026 Seller Fundo De Investimento Em Direitos Creditórios 103 CDI + 1.80% Brazilian Reais May 2026 Mercado Crédito Consumo XVI 2 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos December 2023 Mercado Crédito Consumo XVII 6 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos January 2024 Mercado Crédito Consumo XVIII 12 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos January 2024 Mercado Crédito Consumo XIX 14 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos February 2024 Mercado Crédito Consumo XX 17 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos March 2024 Mercado Crédito Consumo XXI 16 Badlar rates plus 200 basis points with a min 80% and a max 120% Argentine Pesos June 2024 Mercado Crédito Consumo XXII 17 Badlar rates plus 200 basis points with a min 80% and a max 120% Argentine Pesos June 2024 Mercado Crédito Consumo XXIII 18 Badlar rates plus 200 basis points with a min 80% and a max 120% Argentine Pesos August 2024 Mercado Crédito Consumo XXIV 17 Badlar rates plus 200 basis points with a min 100% and a max 140% Argentine Pesos October 2024 Mercado Crédito Consumo XXV (*) 17 Badlar rates plus 200 basis points with a min 100% and a max 150% Argentine Pesos November 2024 Mercado Crédito XVII 3 Badlar rates plus 200 basis points with a min 35% and a max 88% Argentine Pesos March 2024 Mercado Crédito XVIII 5 Badlar rates plus 200 basis points with a min 35% and a max 92% Argentine Pesos January 2024 Mercado Crédito XIX 11 Badlar rates plus 200 basis points with a min 100% and a max 140% Argentine Pesos August 2024 Fideicomiso de administración y fuente de pago CIB/3756 239 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.35% Mexican Pesos August 2026 Fideicomiso de administración y fuente de pago CIB/3369 289 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.0% Mexican Pesos April 2025 $ 1,438 (*) As of September 30, 2023, Loans payable owned by this trust were obtained through private placements. Mercado Crédito Consumo XXV trust made a public bond offering in the Argentine stock market on October 4, 2023. This secured debt is issued by the SPEs and includes collateralized securities used to fund the Company’s Fintech business. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have recourse to the Company. Additionally, the cash flows generated by the SPEs are restricted to the payment of amounts due to third-party investors, but the Company retains the right to residual cash flows. The assets and liabilities of the SPEs are included in the Company’s unaudited interim condensed consolidated financial statements as of September 30, 2023 and December 31, 2022 as follows: September 30, December 31, Assets (In millions) Current assets: Restricted cash and cash equivalents $ 281 $ 459 Short-term investments 1 — Credit card receivables and other means of payments, net 106 317 Loans receivable, net 1,169 799 Total current assets 1,557 1,575 Non-current assets: Long-term investments 24 21 Loans receivable, net 19 24 Total non-current assets 43 45 Total assets $ 1,600 $ 1,620 Liabilities Current liabilities: Accounts payable and accrued expenses $ — $ 4 Loans payable and other financial liabilities 664 535 Other liabilities 4 1 Total current liabilities 668 540 Non-current liabilities: Loans payable and other financial liabilities 774 703 Total non-current liabilities 774 703 Total liabilities $ 1,442 $ 1,243 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases certain fulfillment, cross-docking and services centers, office space, aircraft, aircraft hangars, machines, and vehicles in the various countries in which it operates. The lease agreements do not contain any residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to leases was as follows: September 30, 2023 December 31, 2022 (In millions) Operating Leases Operating lease right-of-use assets $ 796 $ 656 Operating lease liabilities $ 786 $ 656 Finance Leases Property and equipment, at cost 106 87 Accumulated depreciation (42) (31) Property and equipment, net $ 64 $ 56 Loans payable and other financial liabilities $ 60 $ 51 The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 7 Years 8 Years Finance leases 3 Years 3 Years Weighted average discount rate (*) Operating leases 10 % 10 % Finance leases 22 % 16 % (*) Includes discount rates of leases in local currency and U.S. dollar. The components of lease expense were as follows: Nine Months Ended 2023 2022 (In millions) Operating lease cost $ 130 $ 91 Finance lease cost: Depreciation of property and equipment 15 13 Interest on lease liabilities 7 6 Total finance lease cost $ 22 $ 19 Supplemental cash flow information related to leases was as follows: Nine Months Ended 2023 2022 (In millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 129 $ 85 Financing cash flows from finance leases 21 14 Assets obtained in exchange for lease obligations: Operating leases $ 188 $ 193 Finance leases 20 15 The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by the Company’s incremental borrowing rates to calculate the lease liabilities for the operating and finance leases: Period Ending September 30, 2023 Operating Leases Finance Leases (In millions) One year or less $ 171 $ 32 One year to two years 171 27 Two years to three years 144 22 Three years to four years 118 8 Four years to five years 111 — Thereafter 384 — Total lease payments $ 1,099 $ 89 Less imputed interest (313) (29) Total $ 786 $ 60 |
Leases | Leases The Company leases certain fulfillment, cross-docking and services centers, office space, aircraft, aircraft hangars, machines, and vehicles in the various countries in which it operates. The lease agreements do not contain any residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to leases was as follows: September 30, 2023 December 31, 2022 (In millions) Operating Leases Operating lease right-of-use assets $ 796 $ 656 Operating lease liabilities $ 786 $ 656 Finance Leases Property and equipment, at cost 106 87 Accumulated depreciation (42) (31) Property and equipment, net $ 64 $ 56 Loans payable and other financial liabilities $ 60 $ 51 The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 7 Years 8 Years Finance leases 3 Years 3 Years Weighted average discount rate (*) Operating leases 10 % 10 % Finance leases 22 % 16 % (*) Includes discount rates of leases in local currency and U.S. dollar. The components of lease expense were as follows: Nine Months Ended 2023 2022 (In millions) Operating lease cost $ 130 $ 91 Finance lease cost: Depreciation of property and equipment 15 13 Interest on lease liabilities 7 6 Total finance lease cost $ 22 $ 19 Supplemental cash flow information related to leases was as follows: Nine Months Ended 2023 2022 (In millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 129 $ 85 Financing cash flows from finance leases 21 14 Assets obtained in exchange for lease obligations: Operating leases $ 188 $ 193 Finance leases 20 15 The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by the Company’s incremental borrowing rates to calculate the lease liabilities for the operating and finance leases: Period Ending September 30, 2023 Operating Leases Finance Leases (In millions) One year or less $ 171 $ 32 One year to two years 171 27 Two years to three years 144 22 Three years to four years 118 8 Four years to five years 111 — Thereafter 384 — Total lease payments $ 1,099 $ 89 Less imputed interest (313) (29) Total $ 786 $ 60 |
Derivative instruments
Derivative instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments | Derivative instruments Cash flow hedges As of September 30, 2023, 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 derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. As of September 30, 2023, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive income will be reclassified into earnings within the next 12 months. In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its variable financial debt issued by one of its Brazilian subsidiaries. The Company designated the swap contracts as cash flow hedges. The derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings within the next 12 months. Fair value hedges The Company has entered into cross currency swap contracts to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt issued by its Brazilian subsidiaries. The Company designated the swap contracts as fair value hedges. The derivative’s gain or loss is reported in earnings in the same line items as the change in the value of the financial debt due to the hedged risks. Since the terms of the interest rate swaps match the terms of the hedged debts, changes in the fair value of the interest rate swaps are offset by changes in the fair value of the hedged debts attributable to changes in interest rates. Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debts is recorded at the floating rates. Net investment hedge The Company used cross currency swap contracts, to reduce the foreign currency exchange risk related to its investment in its Brazilian foreign subsidiaries and the interest rate risk. This derivative was designated as a net investment hedge and, accordingly, gains and losses are reported as a component of accumulated other comprehensive income. The derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and is expected to be reclassified into earnings in the same period that the interest expense affects earnings. Derivative instruments not designated as hedging instruments As of September 30, 2023, the Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S. dollars of certain of its Brazilian subsidiaries, whose functional currencies are the Brazilian Real. These transactions were not designated as hedges for accounting purposes. Finally, as of September 30, 2023, the Company entered into swap contracts to hedge the interest rate fluctuation of a certain portion of its financial debt in its Brazilian subsidiaries and VIEs. These transactions were not designated as hedges for accounting purposes. The following table presents the notional amounts of the Company’s outstanding derivative instruments: Notional Amount as of September 30, 2023 December 31, 2022 (In millions) Designated as hedging instrument Foreign exchange contracts $ 62 $ 109 Interest rate swap contracts — 229 Cross currency swap contracts 244 133 Not designated as hedging instrument Foreign exchange contracts $ 39 $ 110 Interest rate swap contracts 249 480 Derivative Instrument Contracts The fair values of the Company’s outstanding derivative instruments as of September 30, 2023 and December 31, 2022 were as follows: Balance sheet location September 30, 2023 December 31, 2022 (In millions) Derivative Instruments Foreign exchange contracts designated as cash flow hedges Other current assets $ — $ 1 Cross currency swap contracts designated as fair value hedge Other current assets 5 — Interest rate swap contracts not designated as hedging instruments Other non-current assets 11 — Cross currency swap contracts designated as net investment hedge Other current liabilities 4 2 Interest rate swap contracts designated as cash flow hedges Other current liabilities — 8 Cross currency swap contracts designated as fair value hedge Other current liabilities 4 2 Interest rate swap contracts not designated as hedging instruments Other current liabilities 7 1 Foreign exchange contracts not designated as hedging instruments Other current liabilities 2 2 Foreign exchange contracts designated as cash flow hedges Other current liabilities 1 2 Interest rate swap contracts not designated as hedging instruments Other non-current liabilities — 6 Cross currency swap contracts designated as net investment hedge Other non-current liabilities — 1 The effects of derivative contracts on the unaudited interim condensed consolidated statement of comprehensive income as of September 30, 2023 were as follows: December 31, Amount of gain (loss) recognized in other comprehensive income Amount of (gain) loss reclassified from accumulated other comprehensive income September 30, (In millions) Foreign exchange contracts designated as cash flow hedges $ (2) $ (9) $ 9 $ (2) Interest swap contracts designated as cash flow hedges (2) 8 (6) — Cross currency swap contracts designated as net investment hedge (1) (7) 5 (3) $ (5) $ (8) $ 8 $ (5) The effect of the Company’s fair value hedge relationships on the unaudited interim condensed consolidated statements of income for the nine and three-month periods ended September 30, 2023 is a loss of $9 million and a gain of $4 million, respectively, and affected interest expense and other financial losses and foreign exchange losses, net. For the nine and three-month periods ended September 30, 2022, the Company recognized a gain of $1 million that affected interest expense and other financial losses. The carrying amount of the hedged items for fair value hedges as of September 30, 2023 and December 31, 2022 was $214 million and $59 million, respectively. The effect of the Company’s fair value hedge relationships on the unaudited interim condensed consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of September 30, 2023 is less than $1 million, while as of September 30, 2022 is $1 million. The effects of derivative contracts not designated as hedging instruments on the unaudited interim condensed consolidated statements of income for the nine and three-month periods ended September 30, 2023 and 2022 were as follows: Nine Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 (In millions) (In millions) Foreign exchange contracts not designated as hedging instruments recognized in Foreign currency losses, net $ (10) $ — $ 1 $ — Currency swap contracts not designated as hedging instruments recognized in Foreign currency losses, net — (23) — (1) Interest rate contracts not designated as hedging instruments recognized in Interest expense and other financial losses 1 (5) (4) (5) |
Share repurchase program
Share repurchase program | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Share repurchase program | Share repurchase program On February 21, 2023, the Board authorized the Company to repurchase shares of the Company’s common stock, for an aggregate consideration of up to $900 million to expire on March 31, 2024. As of September 30, 2023, the estimated remaining balance available for share repurchases under this Program was $157 million. The Company expects to purchase shares at any time and from time to time, in compliance with applicable federal securities laws, through open-market purchases, block trades, derivatives, trading plans established in accordance with SEC rules, or privately negotiated transactions. The timing of repurchases will depend on factors including market conditions and prices, the Company’s liquidity requirements and alternative uses of capital. The share repurchase program may be suspended from time to time or discontinued, and there is no assurance as to the number of shares that will be repurchased under the program or that there will be any additional repurchases. As of September 30, 2023, the Company had acquired 570,049 shares under the aforementioned share repurchase programs. From time to time, the Company acquires shares of its own common stock in the Argentine market and pays for them in Argentine Pesos at a price that reflects the additional cost of accessing U.S. dollars through securities denominated in U.S. dollars, because of restrictions imposed by the Argentine government for buying U.S. dollars at the official exchange rate in Argentina (See Note 2 - “Summary of significant accounting policies - Argentine currency status” of these unaudited interim condensed consolidated financial statements). As a result, the Company recognized foreign currency losses of $386 million and $108 million for the nine-month periods ended September 30, 2023 and 2022 respectively, while foreign currency losses for the three-month periods ended September 30, 2023 and 2022 amounted to $173 million and $45 million, respectively. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net income | $ 359 | $ 262 | $ 201 | $ 129 | $ 123 | $ 65 | $ 822 | $ 317 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). Investments in entities where the Company holds joint control, but not control, over the investee are accounted for using the equity method of accounting. These unaudited interim condensed consolidated financial statements are stated in U.S. dollars, except where otherwise indicated. Intercompany transactions and balances with subsidiaries have been eliminated for consolidation purposes. |
Use of estimates | Use of estimates The preparation of these unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, accounting for allowance for doubtful accounts and chargeback provisions, inventories valuation reserves, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of short-term and long-term investments, impairment of long-lived assets, separation of lease and non lease components for aircraft leases, compensation costs relating to the Company’s long term retention program, fair value of convertible debt, fair value of investments, fair value of loans receivable, fair value of derivative instruments, income taxes and contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements. Actual results could differ from those estimates. |
Revenue recognition | Revenue recognition Revenue recognition criteria for the services provided and goods sold by the Company are described in Note 2 to the consolidated financial statements in the Company’s 2022 10-K. The aggregate gain included in “Fintech services” revenues arising from financing transactions and sales of financial assets, net of the costs recognized on sale of credit card receivables, is $1,055 million and $379 million for the nine and three-month periods ended September 30, 2023 and $751 million and $261 million for the nine and three-month periods ended September 30, 2022, respectively. Contract balances Timing of revenue recognition may differ from the timing of invoicing to customers. Receivables represent amounts invoiced and revenue recognized prior to invoicing when the Company has satisfied the performance obligation and has the unconditional right to payment. Accounts receivable and credit card receivables and other means of payments are presented net of allowance for doubtful accounts and chargebacks of $35 million and $25 million as of September 30, 2023 and December 31, 2022, respectively. See Note 6 of these unaudited interim condensed consolidated financial statements for information related to the allowance for doubtful accounts with respect to the Company’s loans receivable. |
Foreign currency translation | Foreign currency translation All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Argentina, which has used the U.S. dollar as its functional currency since July 1, 2018. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from their local currencies into U.S. dollars by using period-end exchange rates while income and expense accounts are translated at the average monthly rates in effect during the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive income. Net foreign currency transaction results are included in the unaudited interim condensed consolidated statements of income under the caption “Foreign currency losses, net”. Argentine currency status |
Income taxes | Income taxes Income taxes’ accounting policy is described in Note 2 to the consolidated financial statements in the Company’s 2022 10-K. The Company’s consolidated estimated effective tax rate for the nine-month period ended September 30, 2023 increased as compared to the same period in 2022. This was a result of (i) taxable foreign exchange gains accounted for local tax purposes that are not recorded for accounting purposes since, under U.S. GAAP, Argentina’s operations’ functional currency is the U.S. dollar due to the highly inflationary status of the country, (ii) a higher proportion of pre-tax results arising from entities under general income tax treatment regime over the Brazilian segment as compared to the same period in 2022 and (iii) higher non-deductible foreign exchange losses related to the acquisition of our own common stock in the Argentine market. This increase was partially offset by the reversal of the valuation allowances in one of the Company’s Mexican subsidiaries during the third quarter of 2023. The Company’s consolidated estimated effective tax rate for the three-month period ended September 30, 2023 decreased as compared to the same period in 2022, mainly as a result of the reversal of the valuation allowances in one of its Mexican subsidiaries during the third quarter of 2023. This decrease was partially offset by taxable foreign exchange gains accounted for local tax purposes, which are not recorded for accounting purposes given that under U.S. GAAP and due to Argentina’s highly inflationary status, Argentina’s operations’ functional currency is the U.S. dollar. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. In accordance with ASC 740, Management periodically assesses the need to either establish or reverse a valuation allowance for deferred tax assets considering positive and negative objective evidence related to the realization of the deferred tax assets. In its assessment, Management considers, among other factors, the nature, frequency and magnitude of current and cumulative losses on an individual subsidiary basis, projections of future taxable income, the duration of statutory carryforward periods, as well as feasible tax planning strategies, which would be employed by the Company to prevent tax loss carryforwards from expiring unutilized. As of September 30, 2023, the Company’s Management concluded that an amount of $141 million of valuation allowance should be reversed at that date given that is more likely than not that deferred tax assets from DeRemate.com de México, S. de R.L. de C.V., a Mexican subsidiary, will be realized in the foreseeable future. The change in judgment regarding the realizability of the deferred tax assets of the Mexican subsidiary was triggered during the three-month period ended September 30, 2023, as positive trends observed in recent periods became enough evidence to support the conclusion. Knowledge-based economy promotional regime in Argentina In August 2021, the Under Secretariat of Knowledge Economy issued the Disposition 316/2021 approving MercadoLibre S.R.L.’s application for eligibility under the knowledge-based economy promotional regime, established by the Law No. 27,506 and complemented by Argentina’s Executive Power Decree No. 1034/2020, Argentina’s Ministry of Productive Development’s Resolution No. 4/2021 and the Under Secretariat of Knowledge Economy’s Disposition No. 11/2021. As a result, the Company recorded an income tax benefit of $35 million and $14 million, and $19 million and $15 million during the nine and three-month periods ended September 30, 2023 and 2022, respectively. The aggregate per share effect of the income tax benefit amounted to $0.69 and $0.27, and $0.38 and $0.30 for the nine and three-month periods ended September 30, 2023 and 2022, respectively. Furthermore, the Company recorded a social security benefit of $49 million and $16 million, and $39 million and $13 million during the nine and three-month periods ended September 30, 2023 and 2022, respectively. |
Fair value option applied to certain financial instruments | Fair value option applied to certain financial instruments Under ASC 825, U.S. GAAP provides an option to elect fair value with impact on the statement of income as an alternative measurement for certain financial instruments and other items on the balance sheet. The Company has elected to measure certain financial assets at fair value with impact on the statement of income for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in the unaudited interim condensed consolidated statement of income and unaudited interim condensed consolidated statement of comprehensive income and to better reflect the financial model applied for selected instruments. The Company’s election of the fair value option applies to the: i) Brazilian federal government bonds and ii) U.S. treasury notes. |
Recently Adopted Accounting Standards & Recently issued accounting pronouncements not yet adopted | Recently Adopted Accounting Standards On October 28, 2021, the FASB issued the Accounting Standards Update (“ASU”) 2021-08 “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The amendments in this update improve comparability for the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by specifying for all acquired revenue contracts regardless of their timing of payment (1) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and (2) how to measure those contract assets and contract liabilities. The amendments provide consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The Company adopted this standard effective as of January 1, 2023 and it did not have a material impact on the Company’s financial statements. On March 31, 2022, the FASB issued the ASU 2022-02 “Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial Instruments – Credit Losses”, which eliminates the accounting guidance on TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the guidance requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases. The amendments should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company adopted this standard effective as of January 1, 2023 and it did not have a material impact on the Company’s financial statements. On September 29, 2022, the FASB issued the ASU 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The amendments in this update require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about their obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The Company adopted this standard effective as of January 1, 2023, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The guidance should be applied retrospectively to all periods in which a balance sheet is presented, except for the rollforward requirement, which should be applied prospectively. The Company and certain financial institutions participate in a supplier finance program (“SFP”) that enables certain of the Company’s suppliers, at their own election, to request the payment of their invoices to the financial institutions earlier than the terms stated in the Company’s payment policy. Suppliers’ voluntary inclusion of invoices in the SFP does not change the Company’s payment terms, the amounts paid or liquidity. The Company has no economic interest in a supplier’s decision to participate in the SFP and has no financial impact in connection with the SFP. As of September 30, 2023 and December 31, 2022, the obligations outstanding that the Company has confirmed as valid to the financial institutions amounted to $302 million and $227 million, respectively, and are included in the unaudited interim condensed consolidated balance sheets within accounts payable and accrued expenses line. Recently issued accounting pronouncements not yet adopted As of the date of issuance of these unaudited interim condensed consolidated financial statements there were no accounting pronouncements issued not yet adopted expected to have a material impact on the Company’s financial statements. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Assets, Liabilities and Net Assets of Company's Argentinean Subsidiaries | The following table sets forth the assets, liabilities and net assets of the Company’s Argentine subsidiaries and consolidated VIEs, before intercompany eliminations, as of September 30, 2023 and December 31, 2022: September 30, December 31, (In millions) Assets $ 3,936 $ 3,238 Liabilities 2,601 2,419 Net assets $ 1,335 $ 819 |
Schedule of Net Revenues and Net Income Before Income Tax of Company's Subsidiaries | The following table provides information relating to net revenues and direct contribution (see Note 8 of these unaudited interim condensed consolidated financial statements for definition of direct contribution) for the nine and three-month periods ended September 30, 2023 and 2022 of the Company’s Argentine subsidiaries and consolidated VIEs: Nine Months Ended Three Months Ended 2023 2022 2023 2022 (In millions) (In millions) Net revenues $ 2,317 $ 1,787 $ 825 $ 675 Direct contribution 1,028 719 384 299 |
Net income per share (Tables)
Net income per share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share of Common Stock | Net income per share of common stock is as follows for the nine and three-month periods ended September 30, 2023 and 2022: Nine Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income per common share (*) $ 16.40 $ 16.36 $ 6.30 $ 6.29 $ 7.18 $ 7.16 $ 2.57 $ 2.56 Numerator (in millions): Net income $ 822 $ 822 $ 317 $ 317 $ 359 $ 359 $ 129 $ 129 Effect of dilutive 2028 Notes — 1 — 6 — — — 2 Net income available to common stock $ 822 $ 823 $ 317 $ 323 $ 359 $ 359 $ 129 $ 131 Denominator: Weighted average of common stock outstanding for earnings per share 50,137,826 50,137,826 50,365,813 50,365,813 50,008,320 50,008,320 50,325,075 50,325,075 Adjustment for assumed conversions — 201,119 — 990,268 — 201,119 — 990,268 Adjusted weighted average of common stock outstanding for earnings per share 50,137,826 50,338,945 50,365,813 51,356,081 50,008,320 50,209,439 50,325,075 51,315,343 |
Cash, cash equivalents, restr_2
Cash, cash equivalents, restricted cash and cash equivalents and investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Components of Cash, Cash Equivalents, Restricted Cash and Cash Equivalents and Investments | The composition of cash, cash equivalents, restricted cash and cash equivalents, short-term and long-term investments is as follows: September 30, 2023 December 31, 2022 (In millions) Cash and cash equivalents Cash in bank accounts $ 1,238 $ 1,160 Money market 764 599 Time deposits 169 130 U.S. government debt securities — 21 Total cash and cash equivalents $ 2,171 $ 1,910 Restricted cash and cash equivalents Securitization transactions (2) $ 281 $ 459 Foreign government debt securities (Central Bank of Brazil mandatory guarantee) (1) — 158 Bank account (Argentine Central Bank regulation) (1) 413 496 Bank account (Mexican National Banking and Securities Commission regulation) (1) 38 9 Time deposits (Mexican National Banking and Securities Commission regulation) (1) 264 239 Bank account (Chilean Commission for the Financial Market regulation) (1) 27 4 Time deposits (Chilean Commission for the Financial Market regulation) (1) 36 49 Money market (Secured lines of credit guarantee) 26 33 Bank account (Financial Superintendence of Colombia regulation) (1) — 1 Money market (Financial Superintendence of Colombia regulation) (1) — 5 Total restricted cash and cash equivalents $ 1,085 $ 1,453 Total cash, cash equivalents, restricted cash and cash equivalents (3) $ 3,256 $ 3,363 Short-term investments U.S. government debt securities $ 1,124 $ 558 Foreign government debt securities (Central Bank of Brazil mandatory guarantee) (1) 1,762 1,219 Foreign government debt securities (4) 94 123 Time deposits 326 439 Securitization transactions (2) 1 — Equity securities at fair value 13 $ — Total short-term investments $ 3,320 $ 2,339 Long-term investments U.S. government debt securities $ — $ 175 Foreign government debt securities (5) 67 70 Securitization transactions (2) 24 21 Equity securities held at cost 58 56 Total long-term investments $ 149 $ 322 (1) Regulations issued by the Central Banks and other regulators of the countries where the Company operates applicable to its Fintech business are described in Note 3 to the consolidated financial statements in the Company’s 2022 10-K. Recently issued regulations are described in Note 3 of these unaudited interim condensed consolidated financial statements. (2) Investments from securitization transactions are restricted to the payment of amounts due to third-party investors. (3) Cash, cash equivalents, restricted cash and cash equivalents as reported in the consolidated statement of cash flows. (4) As of September 30, 2023, this includes $6 million that guarantee a line of credit and are considered restricted. (5) On September 11, 2023, the Brazilian subsidiary Mercado Crédito Sociedade de Crédito, Financiamento e Investimento S.A. received $15 million of capital contribution from its shareholders, which is in the process of legal registration by the Central Bank of Brazil. As a result, $15 million of long-term investments are considered restricted as of September 30, 2023 . |
Loans receivable, net (Tables)
Loans receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Loans Receivable, Net | The Company classifies loans receivable as “On-line merchant”, “Consumer”, “In-store merchant” and “Credit cards”. As of September 30, 2023 and December 31, 2022, the components of Loans receivable, net were as follows: September 30, 2023 Loans receivable Allowance for doubtful accounts Loans receivable, net (In millions) On-line merchant $ 418 $ (120) $ 298 Consumer 1,827 (573) 1,254 In-store merchant 294 (127) 167 Credit cards 863 (204) 659 Total $ 3,402 $ (1,024) $ 2,378 December 31, 2022 Loans receivable Allowance for doubtful accounts Loans receivable, net (In millions) On-line merchant $ 394 $ (120) $ 274 Consumer 1,568 (614) 954 In-store merchant 267 (145) 122 Credit cards 611 (225) 386 Total $ 2,840 $ (1,104) $ 1,736 |
Schedule of Credit Quality Analysis of Loans Receivables | The amortized cost of the loans receivable classified by the Company’s credit quality internal indicator was as follows: September 30, 2023 December 31, 2022 (In millions) 1-30 days past due $ 183 $ 118 31-60 days past due 98 88 61-90 days past due 78 86 91-120 days past due 83 103 121-150 days past due 81 110 151-180 days past due 73 112 181-210 days past due 69 100 211-240 days past due 74 93 241-270 days past due 71 89 271-300 days past due 72 73 301-330 days past due 82 85 331-360 days past due 84 75 Total past due 1,048 1,132 To become due 2,354 1,708 Total $ 3,402 $ 2,840 |
Summary of Allowance for Uncollectible Accounts Activity | The following tables summarize the allowance for doubtful accounts activity during the nine-month periods ended September 30, 2023 and 2022: September 30, 2023 On-line merchant Consumer In-store merchant Credit cards Total (In millions) Balance at beginning of year $ 120 $ 614 $ 145 $ 225 $ 1,104 Net charged to Net Income 81 417 93 140 731 Currency translation adjustments 3 9 — 10 22 Write-offs (*) (84) (467) (111) (171) (833) Balance at end of period $ 120 $ 573 $ 127 $ 204 $ 1,024 September 30, 2022 On-line merchant Consumer In-store merchant Credit cards Total (In millions) Balance at beginning of year $ 79 $ 232 $ 76 $ 48 $ 435 Net charged to Net Income 83 457 111 191 842 Currency translation adjustments (2) (19) (3) (9) (33) Write-offs (*) (48) (133) (48) (7) (236) Balance at end of period $ 112 $ 537 $ 136 $ 223 $ 1,008 (*) The Company writes off loans when customer balance becomes 360 days past due. |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Composition of Goodwill and Intangible Assets | The composition of goodwill and intangible assets is as follows: September 30, 2023 December 31, 2022 (In millions) Goodwill $ 159 $ 153 Intangible assets with indefinite lives - Trademarks 3 4 ' - Digital assets (1) 9 9 Amortizable intangible assets - Licenses and others 14 13 - Non-compete agreements 4 4 - Customer lists 12 12 - Trademarks 13 12 - Hubs network 4 4 - Others 3 3 Total intangible assets $ 62 $ 61 Accumulated amortization (41) (36) Total intangible assets, net $ 21 $ 25 (1) Digital assets are net of $21 million of impairment losses as of both September 30, 2023 and December 31, 2022. |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2023 and the year ended December 31, 2022 are as follows: Nine Months Ended September 30, 2023 Brazil Argentina Mexico Chile Colombia Other countries Total (In millions) Balance, beginning of the period $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153 Effect of exchange rates changes 2 — 5 (2) 1 — 6 Balance, end of the period $ 62 $ 10 $ 44 $ 35 $ 6 $ 2 $ 159 Year Ended December 31, 2022 Brazil Argentina Mexico Chile Colombia Other countries Total (In millions) Balance, beginning of the period $ 56 $ 10 $ 37 $ 37 $ 6 $ 2 $ 148 Effect of exchange rates changes 4 — 2 — (1) — 5 Balance, end of the period $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153 |
Expected Intangible Asset Amortization Expense | The following table summarizes the remaining amortization of intangible assets (in millions of U.S. dollars) with definite useful life as of September 30, 2023: For year to be ended December 31, 2023 $ 1 For year to be ended December 31, 2024 3 For year to be ended December 31, 2025 1 For year to be ended December 31, 2026 1 Thereafter 3 $ 9 |
Segment reporting (Tables)
Segment reporting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Financial Performance of Company's Reporting Segments | The following tables summarize the financial performance of the Company’s reporting segments: Nine Months Ended September 30, 2023 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 5,365 $ 2,317 $ 2,066 $ 464 $ 10,212 Direct costs (4,027) (1,289) (1,593) (429) (7,338) Direct contribution 1,338 1,028 473 35 2,874 Operating expenses and indirect costs of net revenues (1,291) Income from operations 1,583 Other income (expenses): Interest income and other financial gains 545 Interest expense and other financial losses (297) Foreign currency losses, net (508) Net income before income tax expense and equity in earnings of unconsolidated entity $ 1,323 Nine Months Ended September 30, 2022 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 4,134 $ 1,787 $ 1,257 $ 357 $ 7,535 Direct costs (3,472) (1,068) (1,075) (348) (5,963) Direct contribution 662 719 182 9 1,572 Operating expenses and indirect costs of net revenues (887) Income from operations 685 Other income (expenses): Interest income and other financial gains 142 Interest expense and other financial losses (221) Foreign currency losses, net (134) Net income before income tax expense and equity in earnings of unconsolidated entity $ 472 Three Months Ended September 30, 2023 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 2,006 $ 825 $ 772 $ 157 $ 3,760 Direct costs (1,435) (441) (605) (150) (2,631) Direct contribution 571 384 167 7 1,129 Operating expenses and indirect costs of net revenues (444) Income from operations 685 Other income (expenses): Interest income and other financial gains 196 Interest expense and other financial losses (111) Foreign currency losses, net (239) Net income before income tax expense and equity in earnings of unconsolidated entity $ 531 Three Months Ended September 30, 2022 Brazil Argentina Mexico Other Countries Total (In millions) Net revenues $ 1,431 $ 675 $ 465 $ 119 $ 2,690 Direct costs (1,209) (376) (384) (121) (2,090) Direct contribution 222 299 81 (2) 600 Operating expenses and indirect costs of net revenues (304) Income from operations 296 Other income (expenses): Interest income and other financial gains 65 Interest expense and other financial losses (92) Foreign currency losses, net (71) Net income before income tax expense and equity in earnings of unconsolidated entity $ 198 |
Consolidated Net Revenues by Similar Products and Services | The following tables summarize net revenues per reporting segment, which have been disaggregated by similar products and services for the nine and three-month periods ended September 30, 2023 and 2022: Nine Months Ended September 30, Brazil Argentina Mexico Other Countries Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 (In millions) Commerce services (a) $ 2,615 $ 1,877 $ 727 $ 602 $ 1,160 $ 702 $ 293 $ 234 $ 4,795 $ 3,415 Commerce products sales (b) 552 344 158 198 212 161 23 29 945 732 Total commerce revenues $ 3,167 $ 2,221 $ 885 $ 800 $ 1,372 $ 863 $ 316 $ 263 $ 5,740 $ 4,147 Fintech services (c) 1,375 1,059 927 636 198 97 134 86 2,634 1,878 Credit revenues (d) 808 833 502 347 489 291 5 2 1,804 1,473 Fintech products sales (e) 15 21 3 4 7 6 9 6 34 37 Total fintech revenues $ 2,198 $ 1,913 $ 1,432 $ 987 $ 694 $ 394 $ 148 $ 94 $ 4,472 $ 3,388 Total net revenues $ 5,365 $ 4,134 $ 2,317 $ 1,787 $ 2,066 $ 1,257 $ 464 $ 357 $ 10,212 $ 7,535 Three Months Ended September 30, Brazil Argentina Mexico Other Countries Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 (In millions) Commerce services (a) $ 1,007 $ 669 $ 260 $ 221 $ 429 $ 257 $ 100 $ 76 $ 1,796 $ 1,223 Commerce products sales (b) 204 111 50 69 70 54 8 8 332 242 Total commerce revenues $ 1,211 $ 780 $ 310 $ 290 $ 499 $ 311 $ 108 $ 84 $ 2,128 $ 1,465 Fintech services (c) 487 357 344 245 75 38 45 32 951 672 Credit revenues (d) 304 287 171 139 195 115 2 1 672 542 Fintech products sales (e) 4 7 — 1 3 1 2 2 9 11 Total fintech revenues $ 795 $ 651 $ 515 $ 385 $ 273 $ 154 $ 49 $ 35 $ 1,632 $ 1,225 Total net revenues $ 2,006 $ 1,431 $ 825 $ 675 $ 772 $ 465 $ 157 $ 119 $ 3,760 $ 2,690 (a) Includes final value fees paid by sellers derived from intermediation services and related shipping and storage fees, classified fees derived from classified advertising services and ad sales. (b) Includes revenues from inventory sales and related shipping fees. (c) Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution, 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, Mercado Pago credit and debit card fees and insurtech fees. (d) Includes interest earned on loans and advances granted to merchants and consumers, and interest earned on Mercado Pago credit card transactions. (e) 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: September 30, 2023 December 31, 2022 (In millions) US property and equipment, net $ 2 $ 1 Property and equipment, net Argentina 199 188 Brazil 527 514 Mexico 267 206 Other countries 86 84 $ 1,079 $ 992 Total property and equipment, net $ 1,081 $ 993 |
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: September 30, 2023 December 31, 2022 (In millions) Argentina $ 49 $ 53 Brazil 349 286 Mexico 330 245 Other countries 68 72 Total operating lease right-of-use assets $ 796 $ 656 |
Allocation of Goodwill and Intangible Assets Based on Geography | The following table summarizes the allocation of the goodwill and intangible assets based on geography: September 30, 2023 December 31, 2022 (In millions) US intangible assets, net $ 9 $ 9 Goodwill and intangible assets, net Argentina 13 14 Brazil 66 63 Mexico 44 40 Other countries 48 52 $ 171 $ 169 Total goodwill and intangible assets, net $ 180 $ 178 |
Fair value measurement of ass_2
Fair value measurement of assets and liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022: Description Balances as of Quoted Prices in Significant other Unobservable Balances as of Quoted Prices in Significant other Unobservable (In millions) Assets Cash and Cash Equivalents: Money Market $ 764 $ 764 $ — $ — $ 599 $ 599 $ — $ — U.S. government debt securities (1) — — — — 21 21 — — Restricted Cash and Cash Equivalents: Money Market (3) 219 219 — — 352 352 — — Foreign government debt securities (Central Bank of Brazil Mandatory Guarantee) (1) — — — — 158 158 — — Investments: U.S. government debt securities (1) 1,124 1,124 — — 733 733 — — Foreign government debt securities (Central Bank of Brazil Mandatory Guarantee) (1) 1,762 1,762 — — 1,219 1,219 — — Foreign government debt securities (1) (2) 186 186 — — 214 214 — — Equity securities at fair value 13 13 — — — — — — Other Assets: Derivative Instruments 16 — 16 — 1 — 1 — USDC — — — — 3 3 — — Customer crypto-assets safeguarding assets 21 — 21 — 15 — 15 — Total Assets $ 4,105 $ 4,068 $ 37 $ — $ 3,315 $ 3,299 $ 16 $ — Liabilities: Long-term retention program $ 74 $ — $ 74 $ — $ 58 $ — $ 58 $ — Other Liabilities: Contingent considerations — — — — 8 — — 8 Derivative Instruments 18 — 18 — 24 — 24 — Customer crypto-assets safeguarding liabilities 21 — 21 — 15 — 15 — Total Liabilities $ 113 $ — $ 113 $ — $ 105 $ — $ 97 $ 8 (1) Measured at fair value with impact on the statement of income for the application of the fair value option. (See Note 2 – Fair value option applied to certain financial instruments). (2) As of September 30, 2023 and December 31, 2022 includes $25 million and $21 million, respectively, of investments from securitization transactions that are restricted to the payment of amounts due to third-party investors. (See Note 5 - Cash, cash equivalents, restricted cash and cash equivalents and investments). (3) As of September 30, 2023 and December 31, 2022 includes $193 million and $314 million, respectively, of money market funds from securitization transactions. (See Note 5 - Cash, cash equivalents, restricted cash and cash equivalents and investments). |
Summary of Reconciliation of Financial Liabilities Valuated at Fair Value | The following table summarizes the reconciliation of the financial liabilities measured at fair value using Level 3 inputs as of December 31, 2022: Year Ended December 31, 2022 Derivative Instruments, net Contingent Considerations (In millions) Balance, beginning of the year $ 11 $ (9) Net Additions 3 — Settlements 7 1 Foreign Currency Translation (5) — Gain (Losses) in Other Comprehensive Income (15) — Gain (Losses) on Income Statement (28) — Transfers out of level 3 to level 2 27 — Balance, end of the year $ — $ (8) |
Fair Value of Financial Assets and Liabilities Measured at Amortized Cost | The following table summarizes the estimated fair value of the financial assets and liabilities of the Company not measured at fair value as of September 30, 2023 and December 31, 2022: Balances as of Estimated fair value as of September 30, 2023 Balances as of Estimated fair value as of December 31, 2022 (In millions) Assets Cash and cash equivalents $ 1,407 $ 1,407 $ 1,290 $ 1,290 Restricted cash and cash equivalents 866 866 943 943 Investments 326 326 439 439 Accounts receivables, net 161 161 130 130 Credit card receivables and other means of payment, net 3,375 3,375 2,946 2,946 Loans receivable, net 2,378 2,387 1,736 1,761 Other assets 395 395 273 273 Total Assets $ 8,908 $ 8,917 $ 7,757 $ 7,782 Liabilities Accounts payable and accrued expenses $ 1,910 $ 1,910 $ 1,393 $ 1,393 Funds payable to customers 4,016 4,016 3,454 3,454 Amounts payable due to credit and debit card transactions 757 757 488 488 Salaries and social security payable 445 445 349 349 Loans payable and other financial liabilities 4,454 4,486 4,758 4,997 Other liabilities 206 206 186 186 Total Liabilities $ 11,788 $ 11,820 $ 10,628 $ 10,867 |
Long term retention program (_2
Long term retention program ("LTRP") (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Long Term Retention Program Accrued Compensation Expense | The following table summarizes the long term retention program accrued compensation expense for the nine and three-month periods ended September 30, 2023 and 2022, which are payable in cash according to the decisions made by the Board of Directors (the “Board”): Nine Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 (In millions) (In millions) LTRP 2017 $ — $ (3) $ — $ 1 LTRP 2018 3 (2) 1 1 LTRP 2019 13 12 4 5 LTRP 2020 15 14 5 5 LTRP 2021 17 16 5 5 LTRP 2022 31 22 9 7 LTRP 2023 43 — 15 — Total LTRP $ 122 $ 59 $ 39 $ 24 |
Loans payable and other finan_2
Loans payable and other financial liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Loans Payable and Other Financial Liabilities | The following tables summarize the Company’s Loans payable and other financial liabilities as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (In millions) Current loans payable and other financial liabilities: Loans from banks $ 489 $ 319 Bank overdrafts — 9 Secured lines of credit 94 115 Financial Bills — 113 Deposit Certificates 901 993 Commercial Notes 2 6 Finance lease obligations 20 14 Collateralized debt 664 535 2028 Notes 87 3 2026 Sustainability Notes 2 4 2031 Notes 4 10 Other lines of credit 9 10 $ 2,272 $ 2,131 Non-Current loans payable and other financial liabilities: Loans from banks $ 90 $ 145 Secured lines of credit 19 24 Financial Bills 8 — Deposit Certificates — 3 Commercial Notes 202 187 Finance lease obligations 40 37 Collateralized debt 774 703 2028 Notes — 436 2026 Sustainability Notes 397 398 2031 Notes 651 694 Other lines of credit 1 — $ 2,182 $ 2,627 Type of instrument Currency Interest Weighted Average Interest Rate Maturity September 30, 2023 December 31, 2022 (In millions) Loans from banks Chilean Subsidiaries Chilean Pesos Fixed 9.99 % October 2023 - April 2025 $ 102 $ 150 Brazilian Subsidiary (*) US Dollar Fixed 5.75 % November 2023 52 — Brazilian Subsidiary (*) US Dollar — — % — — 59 Brazilian Subsidiary (*) US Dollar Fixed 5.91 % August 2024 162 — Brazilian Subsidiary Brazilian Reais Variable TJLP + 0.8 % October 2023 - May 2031 9 9 Mexican Subsidiary Mexican Pesos Variable TIIE + 2.20 - 3.50 % October 2023 - June 2027 192 177 Uruguayan Subsidiary Uruguayan Pesos Fixed 9.90 % October 2023 48 47 Colombian Subsidiary Colombian Pesos Fixed 13.98 % November 2023 14 22 Bank overdrafts Uruguayan Subsidiary Uruguayan Pesos — — % — — 9 Secured lines of credit Argentine Subsidiaries Argentine Pesos Fixed 103.12 % October 2023 84 107 Mexican Subsidiary Mexican Pesos Fixed 10.17 % October 2023 - July 2027 29 32 Financial Bills Brazilian Subsidiary Brazilian Reais Variable CDI + 1.15 - 1.40 % March - June 2025 8 113 Deposit Certificates Brazilian Subsidiary Brazilian Reais — — % — — 272 Brazilian Subsidiary Brazilian Reais Variable 100% to 140% of CDI October 2023 - September 2024 769 565 Brazilian Subsidiary Brazilian Reais Fixed 11.90 - 14.40 % October 2023 - April 2024 92 114 Brazilian Subsidiary Brazilian Reais Variable 106.50% of CDI November 2023 40 45 Commercial Notes Brazilian Subsidiary Brazilian Reais Variable DI + 0.88 % October 2023 - August 2027 72 71 Brazilian Subsidiary Brazilian Reais Variable IPCA + 6.41 % October 2023 - August 2029 132 122 Finance lease obligations 60 51 Collateralized debt 1,438 1,238 2028 Notes US Dollar Fixed 2.00 % October - November 2023 87 439 2026 Sustainability Notes US Dollar Fixed 2.375 % January 2024 - January 2026 399 402 2031 Notes US Dollar Fixed 3.125 % January 2024 - January 2031 655 704 Other lines of credit 10 10 $ 4,454 $ 4,758 |
Securitization Transactions (Ta
Securitization Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Securitization Transactions [Abstract] | |
Collateralized Debt | The following table summarizes the Company’s collateralized debt under securitization transactions, as of September 30, 2023: SPEs Collateralized debt as of September 30, 2023 Interest rate Currency Maturity Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados $ 201 CDI + 2.50% Brazilian Reais May 2025 Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado 13 CDI + 3.50% Brazilian Reais August 2025 Olimpia Fundo de Investimento Em Direitos Creditórios 105 CDI + 1.25% Brazilian Reais November 2024 Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados 125 CDI + 2.35% Brazilian Reais January 2030 Seller Fundo De Investimento Em Direitos Creditórios 208 CDI + 1.60% Brazilian Reais March 2026 Seller Fundo De Investimento Em Direitos Creditórios 103 CDI + 1.80% Brazilian Reais May 2026 Mercado Crédito Consumo XVI 2 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos December 2023 Mercado Crédito Consumo XVII 6 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos January 2024 Mercado Crédito Consumo XVIII 12 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos January 2024 Mercado Crédito Consumo XIX 14 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos February 2024 Mercado Crédito Consumo XX 17 Badlar rates plus 200 basis points with a min 60% and a max 92% Argentine Pesos March 2024 Mercado Crédito Consumo XXI 16 Badlar rates plus 200 basis points with a min 80% and a max 120% Argentine Pesos June 2024 Mercado Crédito Consumo XXII 17 Badlar rates plus 200 basis points with a min 80% and a max 120% Argentine Pesos June 2024 Mercado Crédito Consumo XXIII 18 Badlar rates plus 200 basis points with a min 80% and a max 120% Argentine Pesos August 2024 Mercado Crédito Consumo XXIV 17 Badlar rates plus 200 basis points with a min 100% and a max 140% Argentine Pesos October 2024 Mercado Crédito Consumo XXV (*) 17 Badlar rates plus 200 basis points with a min 100% and a max 150% Argentine Pesos November 2024 Mercado Crédito XVII 3 Badlar rates plus 200 basis points with a min 35% and a max 88% Argentine Pesos March 2024 Mercado Crédito XVIII 5 Badlar rates plus 200 basis points with a min 35% and a max 92% Argentine Pesos January 2024 Mercado Crédito XIX 11 Badlar rates plus 200 basis points with a min 100% and a max 140% Argentine Pesos August 2024 Fideicomiso de administración y fuente de pago CIB/3756 239 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.35% Mexican Pesos August 2026 Fideicomiso de administración y fuente de pago CIB/3369 289 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.0% Mexican Pesos April 2025 $ 1,438 |
Assets and Liabilities of the Trust | The assets and liabilities of the SPEs are included in the Company’s unaudited interim condensed consolidated financial statements as of September 30, 2023 and December 31, 2022 as follows: September 30, December 31, Assets (In millions) Current assets: Restricted cash and cash equivalents $ 281 $ 459 Short-term investments 1 — Credit card receivables and other means of payments, net 106 317 Loans receivable, net 1,169 799 Total current assets 1,557 1,575 Non-current assets: Long-term investments 24 21 Loans receivable, net 19 24 Total non-current assets 43 45 Total assets $ 1,600 $ 1,620 Liabilities Current liabilities: Accounts payable and accrued expenses $ — $ 4 Loans payable and other financial liabilities 664 535 Other liabilities 4 1 Total current liabilities 668 540 Non-current liabilities: Loans payable and other financial liabilities 774 703 Total non-current liabilities 774 703 Total liabilities $ 1,442 $ 1,243 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: September 30, 2023 December 31, 2022 (In millions) Operating Leases Operating lease right-of-use assets $ 796 $ 656 Operating lease liabilities $ 786 $ 656 Finance Leases Property and equipment, at cost 106 87 Accumulated depreciation (42) (31) Property and equipment, net $ 64 $ 56 Loans payable and other financial liabilities $ 60 $ 51 |
Summary of Weighted Average Remaining Lease Term and Discount Rate | The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 7 Years 8 Years Finance leases 3 Years 3 Years Weighted average discount rate (*) Operating leases 10 % 10 % Finance leases 22 % 16 % |
Components of Lease Expense | The components of lease expense were as follows: Nine Months Ended 2023 2022 (In millions) Operating lease cost $ 130 $ 91 Finance lease cost: Depreciation of property and equipment 15 13 Interest on lease liabilities 7 6 Total finance lease cost $ 22 $ 19 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: Nine Months Ended 2023 2022 (In millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 129 $ 85 Financing cash flows from finance leases 21 14 Assets obtained in exchange for lease obligations: Operating leases $ 188 $ 193 Finance leases 20 15 |
Maturities of Lease Liabilities | The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by the Company’s incremental borrowing rates to calculate the lease liabilities for the operating and finance leases: Period Ending September 30, 2023 Operating Leases Finance Leases (In millions) One year or less $ 171 $ 32 One year to two years 171 27 Two years to three years 144 22 Three years to four years 118 8 Four years to five years 111 — Thereafter 384 — Total lease payments $ 1,099 $ 89 Less imputed interest (313) (29) Total $ 786 $ 60 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Notional Amounts | The following table presents the notional amounts of the Company’s outstanding derivative instruments: Notional Amount as of September 30, 2023 December 31, 2022 (In millions) Designated as hedging instrument Foreign exchange contracts $ 62 $ 109 Interest rate swap contracts — 229 Cross currency swap contracts 244 133 Not designated as hedging instrument Foreign exchange contracts $ 39 $ 110 Interest rate swap contracts 249 480 |
Summary of Outstanding Derivative Instruments | The fair values of the Company’s outstanding derivative instruments as of September 30, 2023 and December 31, 2022 were as follows: Balance sheet location September 30, 2023 December 31, 2022 (In millions) Derivative Instruments Foreign exchange contracts designated as cash flow hedges Other current assets $ — $ 1 Cross currency swap contracts designated as fair value hedge Other current assets 5 — Interest rate swap contracts not designated as hedging instruments Other non-current assets 11 — Cross currency swap contracts designated as net investment hedge Other current liabilities 4 2 Interest rate swap contracts designated as cash flow hedges Other current liabilities — 8 Cross currency swap contracts designated as fair value hedge Other current liabilities 4 2 Interest rate swap contracts not designated as hedging instruments Other current liabilities 7 1 Foreign exchange contracts not designated as hedging instruments Other current liabilities 2 2 Foreign exchange contracts designated as cash flow hedges Other current liabilities 1 2 Interest rate swap contracts not designated as hedging instruments Other non-current liabilities — 6 Cross currency swap contracts designated as net investment hedge Other non-current liabilities — 1 |
Effect of Derivative Contracts on Comprehensive Income | The effects of derivative contracts on the unaudited interim condensed consolidated statement of comprehensive income as of September 30, 2023 were as follows: December 31, Amount of gain (loss) recognized in other comprehensive income Amount of (gain) loss reclassified from accumulated other comprehensive income September 30, (In millions) Foreign exchange contracts designated as cash flow hedges $ (2) $ (9) $ 9 $ (2) Interest swap contracts designated as cash flow hedges (2) 8 (6) — Cross currency swap contracts designated as net investment hedge (1) (7) 5 (3) $ (5) $ (8) $ 8 $ (5) |
Effect of Derivative Contracts on Income Statement | The effects of derivative contracts not designated as hedging instruments on the unaudited interim condensed consolidated statements of income for the nine and three-month periods ended September 30, 2023 and 2022 were as follows: Nine Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 (In millions) (In millions) Foreign exchange contracts not designated as hedging instruments recognized in Foreign currency losses, net $ (10) $ — $ 1 $ — Currency swap contracts not designated as hedging instruments recognized in Foreign currency losses, net — (23) — (1) Interest rate contracts not designated as hedging instruments recognized in Interest expense and other financial losses 1 (5) (4) (5) |
Summary of significant accoun_4
Summary of significant accounting policies - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) $ / shares | Dec. 31, 2022 USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Long-lived assets, intangible assets and goodwill located in the foreign operations | $ 2,046 | $ 2,046 | $ 1,817 | ||
Aggregate gain included in net revenues arising from financing transactions, net of the costs recognized on sale of credit card receivables, | 379 | $ 261 | 1,055 | $ 751 | |
Allowance for doubtful accounts, loan receivables and chargebacks | 35 | 35 | 25 | ||
Deferred revenue | 34 | 34 | 44 | ||
Deferred revenue, revenue recognized | 29 | ||||
Income tax benefit | (172) | (69) | (504) | (154) | |
Supplier finance program | 302 | 302 | $ 227 | ||
Subsidiary, DeRemate.com de Mexico, S. de R.L. de C.V | |||||
Significant Accounting Policies [Line Items] | |||||
Valuation allowance on deferred tax assets | 141 | 141 | |||
Secretariat Of Knowledge Economy Resolution Issued | |||||
Significant Accounting Policies [Line Items] | |||||
Income tax benefit | $ 14 | $ 15 | $ 35 | $ 19 | |
Aggregate per share effect of the Argentine tax holiday (in dollars per share) | $ / shares | $ 0.27 | $ 0.30 | $ 0.69 | $ 0.38 | |
Social security benefit | $ 16 | $ 13 | $ 49 | $ 39 | |
Argentina | |||||
Significant Accounting Policies [Line Items] | |||||
Quarterly inflation rate | 1.032 | 0.661 | |||
Foreign exchange rate | 349.95 | 349.95 | 177.16 | ||
Quarterly depreciation | 0.975 | 0.434 | |||
Spread of exchange rate | 1.350 | 1.350 | 0.942 |
Summary of significant accoun_5
Summary of significant accounting policies - Assets, Liabilities and Net Assets of Company's Argentinean Subsidiaries (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Subsidiary or Equity Method Investee [Line Items] | ||
Assets | $ 16,124 | $ 13,736 |
Liabilities | 13,383 | 11,909 |
Argentinean Subsidiaries | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Assets | 3,936 | 3,238 |
Liabilities | 2,601 | 2,419 |
Net assets | $ 1,335 | $ 819 |
Summary of significant accoun_6
Summary of significant accounting policies - Net Revenues and Net Income before Income Tax of Company's Argentenian Subsidiaries (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsidiary or Equity Method Investee [Line Items] | ||||
Net revenues | $ 3,760 | $ 2,690 | $ 10,212 | $ 7,535 |
Direct contribution | 1,129 | 600 | 2,874 | 1,572 |
Argentinean Subsidiaries | ||||
Subsidiary or Equity Method Investee [Line Items] | ||||
Net revenues | 825 | 675 | 2,317 | 1,787 |
Direct contribution | $ 384 | $ 299 | $ 1,028 | $ 719 |
Net income per share - Narrativ
Net income per share - Narrative (Details) - Convertible Senior Notes - 2028 Notes $ in Millions | Aug. 31, 2018 USD ($) |
Debt Instrument [Line Items] | |
Convertible senior notes, issued | $ 880 |
Convertible senior notes, interest rate | 2% |
Net income per share - Net Inco
Net income per share - Net Income Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net income attributable to MercadoLibre, Inc. per common share | ||||||||
Net income per common share, Basic (in dollars per share) | $ 7.18 | $ 2.57 | $ 16.40 | $ 6.30 | ||||
Net income per common share, Diluted (in dollars per share) | $ 7.16 | $ 2.56 | $ 16.36 | $ 6.29 | ||||
Numerator: | ||||||||
Net income | $ 359 | $ 262 | $ 201 | $ 129 | $ 123 | $ 65 | $ 822 | $ 317 |
Effect of Dilutive Convertible Senior Notes | 0 | 2 | 1 | 6 | ||||
Net income corresponding to common stock, Basic | 359 | 129 | 822 | 317 | ||||
Net income corresponding to common stock, Diluted | $ 359 | $ 131 | $ 823 | $ 323 | ||||
Denominator: | ||||||||
Weighted average of outstanding common shares, Basic (in shares) | 50,008,320 | 50,325,075 | 50,137,826 | 50,365,813 | ||||
Adjustment for assumed conversions, Diluted (in shares) | 201,119 | 990,268 | 201,119 | 990,268 | ||||
Weighted average of outstanding common shares, Diluted (in shares) | 50,209,439 | 51,315,343 | 50,338,945 | 51,356,081 |
Cash, cash equivalents, restr_3
Cash, cash equivalents, restricted cash and cash equivalents and investments - Components of Cash, Cash Equivalents, Restricted Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 2,171 | $ 1,910 | ||
Restricted cash and cash equivalents | 1,085 | 1,453 | ||
Total cash, cash equivalents, restricted cash and cash equivalents | 3,256 | 3,363 | $ 2,528 | $ 3,648 |
Short-term investments | 3,320 | 2,339 | ||
Long-term investments | 149 | 322 | ||
Cash in bank accounts | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | 1,238 | 1,160 | ||
Cash in bank accounts | Argentina | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 413 | 496 | ||
Cash in bank accounts | Mexico | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 38 | 9 | ||
Cash in bank accounts | Chile | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 27 | 4 | ||
Cash in bank accounts | Columbia | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 0 | 1 | ||
Money market | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | 764 | 599 | ||
Restricted cash and cash equivalents | 26 | 33 | ||
Money market | Columbia | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 0 | 5 | ||
Time deposits | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | 169 | 130 | ||
Time deposits | Mexico | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 264 | 239 | ||
Time deposits | Chile | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 36 | 49 | ||
U.S. government debt securities | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | 0 | 21 | ||
Foreign government debt securities (Central Bank of Brazil mandatory guarantee) | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 0 | 158 | ||
Securitization transactions | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and cash equivalents | 281 | 459 | ||
U.S. government debt securities | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 1,124 | 558 | ||
Long-term investments | 0 | 175 | ||
Foreign government debt securities (Central Bank of Brazil mandatory guarantee) | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 1,762 | 1,219 | ||
Foreign government debt securities | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 94 | 123 | ||
Long-term investments | 67 | 70 | ||
Foreign government debt securities | Guarantee of line of credit | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 6 | |||
Foreign government debt securities | Pending approvals | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Long-term investments | 15 | |||
Time deposits | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 326 | 439 | ||
Securitization transactions | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 1 | 0 | ||
Long-term investments | 24 | 21 | ||
Equity securities at fair value | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term investments | 13 | 0 | ||
Equity securities held at cost | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Long-term investments | $ 58 | $ 56 |
Loans receivable, net - Schedul
Loans receivable, net - Schedule of Loans Receivable, Net (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Loans and Leases Receivable Disclosure [Line Items] | ||||
Loans receivable | $ 3,402 | $ 2,840 | ||
Allowance for doubtful accounts | (1,024) | (1,104) | $ (1,008) | $ (435) |
Loans receivable, net | 2,378 | 1,736 | ||
On-line merchant | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Loans receivable | 418 | 394 | ||
Allowance for doubtful accounts | (120) | (120) | (112) | (79) |
Loans receivable, net | 298 | 274 | ||
Consumer | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Loans receivable | 1,827 | 1,568 | ||
Allowance for doubtful accounts | (573) | (614) | (537) | (232) |
Loans receivable, net | 1,254 | 954 | ||
In-store merchant | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Loans receivable | 294 | 267 | ||
Allowance for doubtful accounts | (127) | (145) | $ (136) | $ (76) |
Loans receivable, net | 167 | 122 | ||
Credit cards | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Loans receivable | 863 | 611 | ||
Allowance for doubtful accounts | (204) | (225) | ||
Loans receivable, net | $ 659 | $ 386 |
Loans receivable, net - Narrati
Loans receivable, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Receivables [Abstract] | |||
Allowance for doubtful accounts | $ 1,038 | $ 1,038 | $ 1,112 |
Unused agreed loan commitment | 14 | 14 | $ 8 |
Expected credit losses | $ 2 | $ 5 |
Loans receivable, net - Sched_2
Loans receivable, net - Schedule of Credit Quality Analysis of Loans Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Total | $ 3,402 | $ 2,840 |
1-30 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 183 | 118 |
31-60 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 98 | 88 |
61-90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 78 | 86 |
91-120 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 83 | 103 |
121-150 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 81 | 110 |
151-180 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 73 | 112 |
181-210 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 69 | 100 |
211-240 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 74 | 93 |
241-270 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 71 | 89 |
271-300 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 72 | 73 |
301-330 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 82 | 85 |
331-360 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 84 | 75 |
Total past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1,048 | 1,132 |
To become due | ||
Financing Receivable, Past Due [Line Items] | ||
Total | $ 2,354 | $ 1,708 |
Loans receivable, net - Summary
Loans receivable, net - Summary of Allowance for Uncollectible Accounts Activity (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of year | $ 1,104 | $ 435 |
Net charged to Net Income | 731 | 842 |
Currency translation adjustments | 22 | (33) |
Utilized/Write-offs | (833) | (236) |
Balance at end of period | 1,024 | 1,008 |
On-line merchant | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of year | 120 | 79 |
Net charged to Net Income | 81 | 83 |
Currency translation adjustments | 3 | (2) |
Utilized/Write-offs | (84) | (48) |
Balance at end of period | 120 | 112 |
Consumer | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of year | 614 | 232 |
Net charged to Net Income | 417 | 457 |
Currency translation adjustments | 9 | (19) |
Utilized/Write-offs | (467) | (133) |
Balance at end of period | 573 | 537 |
In-store merchant | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of year | 145 | 76 |
Net charged to Net Income | 93 | 111 |
Currency translation adjustments | 0 | (3) |
Utilized/Write-offs | (111) | (48) |
Balance at end of period | 127 | 136 |
Credit Card | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of year | 225 | 48 |
Net charged to Net Income | 140 | 191 |
Currency translation adjustments | 10 | (9) |
Utilized/Write-offs | (171) | (7) |
Balance at end of period | $ 204 | $ 223 |
Goodwill and intangible asset_2
Goodwill and intangible assets - Composition of Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill | $ 159 | $ 153 | $ 148 | |
Total intangible assets | 62 | 61 | ||
Accumulated amortization | (41) | (36) | ||
Total intangible assets, net | 21 | 25 | ||
Impairment of digital assets | 0 | $ 11 | ||
Licenses and Others | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 14 | 13 | ||
Non-Compete Agreement | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 4 | 4 | ||
Customer Lists | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 12 | 12 | ||
Trademarks | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 13 | 12 | ||
Hub Network | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 4 | 4 | ||
Other Intangible Assets | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 3 | 3 | ||
Trademarks | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets with indefinite lives | 3 | 4 | ||
Digital Assets | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets with indefinite lives | 9 | 9 | ||
Impairment of digital assets | $ 21 | $ 21 |
Goodwill and intangible asset_3
Goodwill and intangible assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Balance, beginning of the period | $ 153 | $ 148 |
Effect of exchange rates changes | 6 | 5 |
Balance, end of the period | 159 | 153 |
Brazil | ||
Goodwill [Roll Forward] | ||
Balance, beginning of the period | 60 | 56 |
Effect of exchange rates changes | 2 | 4 |
Balance, end of the period | 62 | 60 |
Argentina | ||
Goodwill [Roll Forward] | ||
Balance, beginning of the period | 10 | 10 |
Effect of exchange rates changes | 0 | 0 |
Balance, end of the period | 10 | 10 |
Mexico | ||
Goodwill [Roll Forward] | ||
Balance, beginning of the period | 39 | 37 |
Effect of exchange rates changes | 5 | 2 |
Balance, end of the period | 44 | 39 |
Chile | ||
Goodwill [Roll Forward] | ||
Balance, beginning of the period | 37 | 37 |
Effect of exchange rates changes | (2) | 0 |
Balance, end of the period | 35 | 37 |
Colombia | ||
Goodwill [Roll Forward] | ||
Balance, beginning of the period | 5 | 6 |
Effect of exchange rates changes | 1 | (1) |
Balance, end of the period | 6 | 5 |
Other countries | ||
Goodwill [Roll Forward] | ||
Balance, beginning of the period | 2 | 2 |
Effect of exchange rates changes | 0 | 0 |
Balance, end of the period | $ 2 | $ 2 |
Goodwill and intangible asset_4
Goodwill and intangible assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Aggregate amortization expense for intangible assets | $ 1 | $ 1 | $ 4 | $ 4 |
Goodwill and intangible asset_5
Goodwill and intangible assets - Expected Intangible Asset Amortization Expense (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
For year to be ended December 31, 2023 | $ 1 |
For year to be ended December 31, 2024 | 3 |
For year to be ended December 31, 2025 | 1 |
For year to be ended December 31, 2026 | 1 |
Thereafter | 3 |
Total remaining amortization of intangible assets | $ 9 |
Segment reporting - Financial P
Segment reporting - Financial Performance of Company's Reporting Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 3,760 | $ 2,690 | $ 10,212 | $ 7,535 |
Direct costs | (2,631) | (2,090) | (7,338) | (5,963) |
Direct contribution | 1,129 | 600 | 2,874 | 1,572 |
Operating expenses and indirect costs of net revenues | (444) | (304) | (1,291) | (887) |
Income from operations | 685 | 296 | 1,583 | 685 |
Other income (expenses): | ||||
Interest income and other financial gains | 196 | 65 | 545 | 142 |
Interest expense and other financial losses | (111) | (92) | (297) | (221) |
Foreign currency losses, net | (239) | (71) | (508) | (134) |
Net income before income tax expense and equity in earnings of unconsolidated entity | 531 | 198 | 1,323 | 472 |
Operating Segments | Brazil | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 2,006 | 1,431 | 5,365 | 4,134 |
Direct costs | (1,435) | (1,209) | (4,027) | (3,472) |
Direct contribution | 571 | 222 | 1,338 | 662 |
Operating Segments | Argentina | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 825 | 675 | 2,317 | 1,787 |
Direct costs | (441) | (376) | (1,289) | (1,068) |
Direct contribution | 384 | 299 | 1,028 | 719 |
Operating Segments | Mexico | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 772 | 465 | 2,066 | 1,257 |
Direct costs | (605) | (384) | (1,593) | (1,075) |
Direct contribution | 167 | 81 | 473 | 182 |
Operating Segments | Other Countries | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 157 | 119 | 464 | 357 |
Direct costs | (150) | (121) | (429) | (348) |
Direct contribution | $ 7 | $ (2) | $ 35 | $ 9 |
Segment reporting - Consolidate
Segment reporting - Consolidated Net Revenues by Similar Products and Services (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | $ 3,760 | $ 2,690 | $ 10,212 | $ 7,535 |
Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 2,128 | 1,465 | 5,740 | 4,147 |
Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 1,632 | 1,225 | 4,472 | 3,388 |
Services | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 1,796 | 1,223 | 4,795 | 3,415 |
Services | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 951 | 672 | 2,634 | 1,878 |
Products Sales | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 332 | 242 | 945 | 732 |
Products Sales | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 9 | 11 | 34 | 37 |
Credit Revenues | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 672 | 542 | 1,804 | 1,473 |
Operating Segments | Brazil | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 2,006 | 1,431 | 5,365 | 4,134 |
Operating Segments | Brazil | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 1,211 | 780 | 3,167 | 2,221 |
Operating Segments | Brazil | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 795 | 651 | 2,198 | 1,913 |
Operating Segments | Brazil | Services | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 1,007 | 669 | 2,615 | 1,877 |
Operating Segments | Brazil | Services | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 487 | 357 | 1,375 | 1,059 |
Operating Segments | Brazil | Products Sales | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 204 | 111 | 552 | 344 |
Operating Segments | Brazil | Products Sales | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 4 | 7 | 15 | 21 |
Operating Segments | Brazil | Credit Revenues | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 304 | 287 | 808 | 833 |
Operating Segments | Argentina | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 825 | 675 | 2,317 | 1,787 |
Operating Segments | Argentina | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 310 | 290 | 885 | 800 |
Operating Segments | Argentina | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 515 | 385 | 1,432 | 987 |
Operating Segments | Argentina | Services | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 260 | 221 | 727 | 602 |
Operating Segments | Argentina | Services | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 344 | 245 | 927 | 636 |
Operating Segments | Argentina | Products Sales | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 50 | 69 | 158 | 198 |
Operating Segments | Argentina | Products Sales | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 0 | 1 | 3 | 4 |
Operating Segments | Argentina | Credit Revenues | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 171 | 139 | 502 | 347 |
Operating Segments | Mexico | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 772 | 465 | 2,066 | 1,257 |
Operating Segments | Mexico | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 499 | 311 | 1,372 | 863 |
Operating Segments | Mexico | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 273 | 154 | 694 | 394 |
Operating Segments | Mexico | Services | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 429 | 257 | 1,160 | 702 |
Operating Segments | Mexico | Services | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 75 | 38 | 198 | 97 |
Operating Segments | Mexico | Products Sales | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 70 | 54 | 212 | 161 |
Operating Segments | Mexico | Products Sales | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 3 | 1 | 7 | 6 |
Operating Segments | Mexico | Credit Revenues | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 195 | 115 | 489 | 291 |
Operating Segments | Other Countries | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 157 | 119 | 464 | 357 |
Operating Segments | Other Countries | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 108 | 84 | 316 | 263 |
Operating Segments | Other Countries | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 49 | 35 | 148 | 94 |
Operating Segments | Other Countries | Services | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 100 | 76 | 293 | 234 |
Operating Segments | Other Countries | Services | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 45 | 32 | 134 | 86 |
Operating Segments | Other Countries | Products Sales | Commerce | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 8 | 8 | 23 | 29 |
Operating Segments | Other Countries | Products Sales | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 2 | 2 | 9 | 6 |
Operating Segments | Other Countries | Credit Revenues | Fintech | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | $ 2 | $ 1 | $ 5 | $ 2 |
Segment reporting - Allocation
Segment reporting - Allocation of Property and Equipment Based on Geography (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 1,081 | $ 993 |
US | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 2 | 1 |
Argentina | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 199 | 188 |
Brazil | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 527 | 514 |
Mexico | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 267 | 206 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 86 | 84 |
Total Other Countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 1,079 | $ 992 |
Segment reporting - Schedule of
Segment reporting - Schedule of Operating Lease Right of Use Assets Based on Geography (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Operating lease right-of-use assets | $ 796 | $ 656 |
Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Operating lease right-of-use assets | 796 | 656 |
Argentina | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Operating lease right-of-use assets | 49 | 53 |
Brazil | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Operating lease right-of-use assets | 349 | 286 |
Mexico | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Operating lease right-of-use assets | 330 | 245 |
Other countries | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Operating lease right-of-use assets | $ 68 | $ 72 |
Segment reporting - Allocatio_2
Segment reporting - Allocation of Goodwill and Intangible Assets Based on Geography (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | $ 180 | $ 178 |
US | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | 9 | 9 |
Argentina | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | 13 | 14 |
Brazil | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | 66 | 63 |
Mexico | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | 44 | 40 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | 48 | 52 |
Total Other Countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets, net | $ 171 | $ 169 |
Fair value measurement of ass_3
Fair value measurement of assets and liabilities - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Money market | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money markets from securitization transactions | $ 193 | $ 314 |
Securitization transactions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount due to third-party investors | 25 | 21 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 4,105 | 3,315 |
Long-term retention plan | 74 | 58 |
Contingent considerations | 0 | 8 |
Derivative Instruments | 18 | 24 |
Customer crypto-assets safeguarding liabilities | 21 | 15 |
Total Financial Liabilities | 113 | 105 |
Fair Value, Measurements, Recurring | Derivative Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 16 | 1 |
Fair Value, Measurements, Recurring | USDC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 3 |
Fair Value, Measurements, Recurring | Customer crypto-assets safeguarding assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 21 | 15 |
Fair Value, Measurements, Recurring | Quoted Prices in active markets for identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 4,068 | 3,299 |
Long-term retention plan | 0 | 0 |
Contingent considerations | 0 | 0 |
Derivative Instruments | 0 | 0 |
Customer crypto-assets safeguarding liabilities | 0 | 0 |
Total Financial Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in active markets for identical Assets (Level 1) | Derivative Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in active markets for identical Assets (Level 1) | USDC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 3 |
Fair Value, Measurements, Recurring | Quoted Prices in active markets for identical Assets (Level 1) | Customer crypto-assets safeguarding assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 37 | 16 |
Long-term retention plan | 74 | 58 |
Contingent considerations | 0 | 0 |
Derivative Instruments | 18 | 24 |
Customer crypto-assets safeguarding liabilities | 21 | 15 |
Total Financial Liabilities | 113 | 97 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Derivative Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 16 | 1 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | USDC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Customer crypto-assets safeguarding assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 21 | 15 |
Fair Value, Measurements, Recurring | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 0 | 0 |
Long-term retention plan | 0 | 0 |
Contingent considerations | 0 | 8 |
Derivative Instruments | 0 | 0 |
Customer crypto-assets safeguarding liabilities | 0 | 0 |
Total Financial Liabilities | 0 | 8 |
Fair Value, Measurements, Recurring | Unobservable inputs (Level 3) | Derivative Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 0 |
Fair Value, Measurements, Recurring | Unobservable inputs (Level 3) | USDC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 0 |
Fair Value, Measurements, Recurring | Unobservable inputs (Level 3) | Customer crypto-assets safeguarding assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Assets | 0 | 0 |
Fair Value, Measurements, Recurring | Money market | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 764 | 599 |
Restricted Cash and cash equivalents | 219 | 352 |
Fair Value, Measurements, Recurring | Money market | Quoted Prices in active markets for identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 764 | 599 |
Restricted Cash and cash equivalents | 219 | 352 |
Fair Value, Measurements, Recurring | Money market | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Restricted Cash and cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Money market | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Restricted Cash and cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 0 | 21 |
Investments | 1,124 | 733 |
Fair Value, Measurements, Recurring | U.S. government debt securities | Quoted Prices in active markets for identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 0 | 21 |
Investments | 1,124 | 733 |
Fair Value, Measurements, Recurring | U.S. government debt securities | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. government debt securities | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 0 | 0 |
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 186 | 214 |
Fair Value, Measurements, Recurring | Foreign government debt securities | Quoted Prices in active markets for identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 186 | 214 |
Fair Value, Measurements, Recurring | Foreign government debt securities | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign government debt securities | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign government debt securities (Central Bank of Brazil mandatory guarantee) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash and cash equivalents | 0 | 158 |
Investments | 1,762 | 1,219 |
Fair Value, Measurements, Recurring | Foreign government debt securities (Central Bank of Brazil mandatory guarantee) | Quoted Prices in active markets for identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash and cash equivalents | 0 | 158 |
Investments | 1,762 | 1,219 |
Fair Value, Measurements, Recurring | Foreign government debt securities (Central Bank of Brazil mandatory guarantee) | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash and cash equivalents | 0 | 0 |
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign government debt securities (Central Bank of Brazil mandatory guarantee) | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash and cash equivalents | 0 | 0 |
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Equity securities at fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 13 | 0 |
Fair Value, Measurements, Recurring | Equity securities at fair value | Quoted Prices in active markets for identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 13 | 0 |
Fair Value, Measurements, Recurring | Equity securities at fair value | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Equity securities at fair value | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair value measurement of ass_4
Fair value measurement of assets and liabilities - Summary of Reconciliation of Financial Liabilities Valuated at Fair Value (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Derivative Instruments, net | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance, beginning of the year | $ 11 |
Net Additions | 3 |
Settlements | 7 |
Foreign Currency Translation | (5) |
Gain (Losses) in Other Comprehensive Income | (15) |
Gain (Losses) on Income Statement | (28) |
Transfers out of level 3 to level 2 | 27 |
Balance, end of the year | 0 |
Contingent Considerations | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance, beginning of the year | (9) |
Net Additions | 0 |
Settlements | 1 |
Foreign Currency Translation | 0 |
Gain (Losses) in Other Comprehensive Income | 0 |
Gain (Losses) on Income Statement | 0 |
Transfers out of level 3 to level 2 | 0 |
Balance, end of the year | $ (8) |
Fair value measurement of ass_5
Fair value measurement of assets and liabilities - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares $ / item | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Recognized gains in interest income and other financial gains | $ 81 | $ 42 | $ 195 | $ 104 | |
Maximum gross realized gains | $ 1 | ||||
Equity securities at fair value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Proceeds from sale of available for sale securitites | 156 | ||||
Auction Rate Securities | Direct Investment | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Investments | 365 | 365 | 359 | ||
Auction Rate Securities | Significant other observable inputs (Level 2) | Direct Investment | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Investments | 553 | 553 | 541 | ||
Convertible Senior Notes | 2028 Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Estimated fair value | $ 255 | $ 255 | $ 884 | ||
Closing trading price per share (in dollars per share) | $ / item | 100 | ||||
Common stock, closing price per share (in dollars per share) | $ / shares | $ 1,267.88 | $ 1,267.88 | |||
Debt instrument convertible, if-converted in excess of principal | $ 167 | $ 167 |
Fair value measurement of ass_6
Fair value measurement of assets and liabilities - Fair Value of Financial Assets and Liabilities Measured at Amortized Cost (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Reported Value Measurement | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | $ 8,908 | $ 7,757 |
Reported Value Measurement | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 11,788 | 10,628 |
Reported Value Measurement | Accounts payable and accrued expenses | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 1,910 | 1,393 |
Reported Value Measurement | Funds payable to customers | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 4,016 | 3,454 |
Reported Value Measurement | Amounts payable due to credit and debit card transactions | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 757 | 488 |
Reported Value Measurement | Salaries and social security payable | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 445 | 349 |
Reported Value Measurement | Loans payable and other financial liabilities | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 4,454 | 4,758 |
Reported Value Measurement | Other liabilities | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 206 | 186 |
Reported Value Measurement | Cash and cash equivalents | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 1,407 | 1,290 |
Reported Value Measurement | Restricted cash and cash equivalents | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 866 | 943 |
Reported Value Measurement | Investments | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 326 | 439 |
Reported Value Measurement | Accounts receivables, net | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 161 | 130 |
Reported Value Measurement | Credit cards | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 3,375 | 2,946 |
Reported Value Measurement | Loans receivable, net | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 2,378 | 1,736 |
Reported Value Measurement | Other assets | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 395 | 273 |
Estimate Of Fair Value Measurement | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 8,917 | 7,782 |
Estimate Of Fair Value Measurement | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 11,820 | 10,867 |
Estimate Of Fair Value Measurement | Accounts payable and accrued expenses | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 1,910 | 1,393 |
Estimate Of Fair Value Measurement | Funds payable to customers | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 4,016 | 3,454 |
Estimate Of Fair Value Measurement | Amounts payable due to credit and debit card transactions | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 757 | 488 |
Estimate Of Fair Value Measurement | Salaries and social security payable | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 445 | 349 |
Estimate Of Fair Value Measurement | Loans payable and other financial liabilities | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 4,486 | 4,997 |
Estimate Of Fair Value Measurement | Other liabilities | Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 206 | 186 |
Estimate Of Fair Value Measurement | Cash and cash equivalents | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 1,407 | 1,290 |
Estimate Of Fair Value Measurement | Restricted cash and cash equivalents | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 866 | 943 |
Estimate Of Fair Value Measurement | Investments | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 326 | 439 |
Estimate Of Fair Value Measurement | Accounts receivables, net | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 161 | 130 |
Estimate Of Fair Value Measurement | Credit cards | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 3,375 | 2,946 |
Estimate Of Fair Value Measurement | Loans receivable, net | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 2,387 | 1,761 |
Estimate Of Fair Value Measurement | Other assets | Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | $ 395 | $ 273 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 08, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) supplier $ / shares shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Loss Contingencies [Line Items] | |||||||
Reserves for proceeding-related contingencies | $ 72,000,000 | $ 72,000,000 | |||||
Aggregate amount for legal actions for which no loss amount has been accrued | 480,000,000 | 480,000,000 | |||||
Loss accrued for reasonably possible legal actions | 0 | ||||||
Income tax benefit | $ (172,000,000) | $ (69,000,000) | $ (504,000,000) | $ (154,000,000) | |||
Number of purchase commitments entered | supplier | 2 | ||||||
Air logistics services agreement term | 10 years | ||||||
Committed contract, minimum annual cost | $ 43,000,000 | ||||||
Sponsor Committed To Purchase Class A Ordinary Shares | |||||||
Loss Contingencies [Line Items] | |||||||
Class A ordinary shares to be purchased (in shares) | shares | 5 | ||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 10 | $ 10 | |||||
Cloud Platform Services | |||||||
Loss Contingencies [Line Items] | |||||||
Paid in relation to the contract | $ 342,000,000 | $ 342,000,000 | |||||
Fully Paid Off Between October 1, 2021 And September 30, 2026 | Cloud Platform Services | |||||||
Loss Contingencies [Line Items] | |||||||
Purchase commitment | 824,000,000 | ||||||
Fully Paid Off Between September 17, 2021 And September 17, 2024 | Cloud Platform Services II | |||||||
Loss Contingencies [Line Items] | |||||||
Purchase commitment | 200,000,000 | ||||||
Paid in relation to the contract | 51,000,000 | 51,000,000 | |||||
ICMS-DIFAL | |||||||
Loss Contingencies [Line Items] | |||||||
Provision for maximum potential exposure | 3,000,000 | 3,000,000 | |||||
ICMS-DIFAL | Lawsuits Filed In 2021 | |||||||
Loss Contingencies [Line Items] | |||||||
Number of lawsuits pending | item | 4,000,000 | ||||||
ICMS Tax Benefits Granted | |||||||
Loss Contingencies [Line Items] | |||||||
Income tax benefit | 16,000,000 | $ 8,000,000 | 44,000,000 | $ 25,000,000 | |||
ICMS Tax Benefits Granted, Considering Exchange Rate | |||||||
Loss Contingencies [Line Items] | |||||||
Income tax benefit | 9,000,000 | $ 3,000,000 | $ 2,000,000 | ||||
eBazar.com.br Ltda | |||||||
Loss Contingencies [Line Items] | |||||||
Tax assessments issued | 8,000,000 | ||||||
Buyer Protection Program | |||||||
Loss Contingencies [Line Items] | |||||||
Provision for maximum potential exposure | 4,364,000,000 | 4,364,000,000 | 4,002,000,000 | ||||
Product liability, contingency, recorded allowance | $ 5,000,000 | $ 5,000,000 | $ 6,000,000 |
Long term retention program (_3
Long term retention program ("LTRP") - Long Term Retention Program Accrued Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | $ 39 | $ 24 | $ 122 | $ 59 |
LTRP 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | 0 | 1 | 0 | (3) |
LTRP 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | 1 | 1 | 3 | (2) |
LTRP 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | 4 | 5 | 13 | 12 |
LTRP 2020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | 5 | 5 | 15 | 14 |
LTRP 2021 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | 5 | 5 | 17 | 16 |
LTRP 2022 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | 9 | 7 | 31 | 22 |
LTRP 2023 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total LTRP | $ 15 | $ 0 | $ 43 | $ 0 |
Loans payable and other finan_3
Loans payable and other financial liabilities - Summary of Book Value of Loans Payable and Other Financial Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current loans payable and other financial liabilities: | ||
Loans from banks | $ 489 | $ 319 |
Bank overdrafts | 0 | 9 |
Secured lines of credit | 94 | 115 |
Financial Bills | 0 | 113 |
Deposit Certificates | 901 | 993 |
Commercial Notes | 2 | 6 |
Finance lease obligations | 20 | 14 |
Collateralized debt | 664 | 535 |
Other lines of credit | 9 | 10 |
Current loans payable and other financial liabilities | 2,272 | 2,131 |
Non-Current loans payable and other financial liabilities: | ||
Loans from banks | 90 | 145 |
Secured lines of credit | 19 | 24 |
Financial Bills | 8 | 0 |
Deposit Certificates | 0 | 3 |
Commercial Notes | 202 | 187 |
Finance lease obligations | 40 | 37 |
Collateralized debt | 774 | 703 |
Other lines of credit | 1 | 0 |
Non Current loans payable and other financial liabilities | 2,182 | 2,627 |
2028 Notes | ||
Current loans payable and other financial liabilities: | ||
2028 Notes | 87 | 3 |
Non-Current loans payable and other financial liabilities: | ||
2028 Notes | 0 | 436 |
2026 Sustainability Notes | ||
Current loans payable and other financial liabilities: | ||
Notes | 2 | 4 |
Non-Current loans payable and other financial liabilities: | ||
Notes | 397 | 398 |
2031 Notes | ||
Current loans payable and other financial liabilities: | ||
Notes | 4 | 10 |
Non-Current loans payable and other financial liabilities: | ||
Notes | $ 651 | $ 694 |
Loans payable and other finan_4
Loans payable and other financial liabilities - Summary of Loans Payable and Other Financial Liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Bank overdrafts | $ 0 | $ 9 |
Finance lease obligations | 60 | 51 |
Collateralized debt | 1,438 | 1,238 |
Other lines of credit | 10 | 10 |
Loans payable and other financial liabilities | $ 4,454 | 4,758 |
Loans From Banks, 11.60% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 9.99% | |
Loans from banks | $ 102 | 150 |
Loans From Banks, 5.75% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 5.75% | |
Loans from banks | $ 52 | 0 |
Loans From Banks, - | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 0% | |
Loans from banks | $ 0 | 59 |
Loans From Banks, 4.32% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 5.91% | |
Loans from banks | $ 162 | 0 |
Loans From Banks, TJLP+0.8% | ||
Debt Instrument [Line Items] | ||
Loans from banks | 9 | 9 |
Loans From Banks, TIIE+2.20-3.50% | ||
Debt Instrument [Line Items] | ||
Loans from banks | $ 192 | 177 |
Loans From Banks, 11.00% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 9.90% | |
Loans from banks | $ 48 | 47 |
Loans From Banks, 14.45% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 13.98% | |
Loans from banks | $ 14 | 22 |
Bank Overdrafts, 11.62% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 0% | |
Bank overdrafts | $ 0 | 9 |
Secured Lines Of Credit, 88.50% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 103.12% | |
Secured lines of credit | $ 84 | 107 |
Secured Lines Of Credit, 10.12% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 10.17% | |
Secured lines of credit | $ 29 | 32 |
Financial Bills, CDI+0.95-1.40% | ||
Debt Instrument [Line Items] | ||
Financial Bills | $ 8 | 113 |
Deposit Certificates -% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 0% | |
Deposit Certificates | $ 0 | 272 |
Deposit Certificates, 100% to 150% of CDI | ||
Debt Instrument [Line Items] | ||
Deposit Certificates | 769 | 565 |
Deposit Certificates, 13.35% - 14.70% | ||
Debt Instrument [Line Items] | ||
Deposit Certificates | 92 | 114 |
Deposit Certificates, 107.20% to 107.05% of CDI | ||
Debt Instrument [Line Items] | ||
Deposit Certificates | 40 | 45 |
Commercial Notes, DI+0.88% | ||
Debt Instrument [Line Items] | ||
Commercial Notes | 72 | 71 |
Commercial Notes, IPCA+6.41% | ||
Debt Instrument [Line Items] | ||
Commercial Notes | $ 132 | 122 |
2028 Notes | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 2% | |
2028 Notes | $ 87 | 439 |
2026 Sustainability Notes | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 2.375% | |
Senior Notes | $ 399 | 402 |
2031 Notes | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 3.125% | |
Senior Notes | $ 655 | $ 704 |
Minimum | Deposit Certificates, 13.35% - 14.70% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 11.90% | |
Maximum | Deposit Certificates, 13.35% - 14.70% | ||
Debt Instrument [Line Items] | ||
Debt weight average rate | 14.40% | |
TJLP | Loans From Banks, TJLP+0.8% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.80% | |
TIIE | Minimum | Loans From Banks, TIIE+2.20-3.50% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.20% | |
TIIE | Maximum | Loans From Banks, TIIE+2.20-3.50% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
CDI | Minimum | Financial Bills, CDI+0.95-1.40% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.15% | |
CDI | Minimum | Deposit Certificates, 100% to 150% of CDI | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 100% | |
CDI | Minimum | Deposit Certificates, 107.20% to 107.05% of CDI | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 106.50% | |
CDI | Maximum | Financial Bills, CDI+0.95-1.40% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.40% | |
CDI | Maximum | Deposit Certificates, 100% to 150% of CDI | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 140% | |
DI | Commercial Notes, DI+0.88% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.88% | |
IPCA | Commercial Notes, IPCA+6.41% | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 6.41% |
Loans payable and other finan_5
Loans payable and other financial liabilities - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2023 USD ($) shares | Sep. 19, 2023 USD ($) shares | May 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jan. 14, 2021 USD ($) | Aug. 31, 2018 USD ($) | Aug. 24, 2018 | |
Debt Instrument [Line Items] | ||||||||||||||
Gain in interest income and other financial gains | $ 8,000,000 | $ 8,000,000 | ||||||||||||
Revolving Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Borrowing under the facility | $ 0 | $ 0 | $ 0 | |||||||||||
Revolving Credit Facility | Subsidiaries | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 400,000,000 | |||||||||||||
2.375% Sustainability Notes due 2026 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible senior notes, interest rate | 2.375% | |||||||||||||
Face amount | $ 400,000,000 | |||||||||||||
Total amount paid | $ 38,000,000 | |||||||||||||
2031 Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible senior notes, interest rate | 3.125% | |||||||||||||
Face amount | $ 700,000,000 | |||||||||||||
Repurchased principal amount | 44,000,000 | |||||||||||||
2026 Sustainability Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repurchased principal amount | $ 2,000,000 | |||||||||||||
Initial Issuance - 2028 Convertible Senior Notes | Convertible Senior Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible senior notes, interest rate | 2% | |||||||||||||
2028 Notes | Convertible Senior Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible senior notes, interest rate | 2% | |||||||||||||
Face amount | $ 880,000,000 | |||||||||||||
Conversion ratio | 0.0022952 | |||||||||||||
Increase in conversion ratio | 0.0000399 | |||||||||||||
Debt instrument outstanding | 88,000,000 | 88,000,000 | 88,000,000 | $ 439,000,000 | ||||||||||
Debt issuance costs | 1,000,000 | 1,000,000 | 1,000,000 | $ 3,000,000 | ||||||||||
Amortization of debt issuance costs | 7,000,000 | $ 2,000,000 | 7,000,000 | $ 2,000,000 | ||||||||||
2028 Notes | Convertible Senior Notes | Notes Converted Into Non Cash Transactions | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Converted shares (in shares) | shares | 869,692 | |||||||||||||
Debt instrument outstanding | 60,000,000 | $ 60,000,000 | $ 60,000,000 | |||||||||||
Total principal amount | $ 351,000,000 | $ 379,000,000 | ||||||||||||
2028 Notes | Convertible Senior Notes | Notes Converted Into Non Cash Transactions | Common stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Converted shares (in shares) | shares | 806,629 | |||||||||||||
2028 Notes | Convertible Senior Notes | Notes Converted Into Non Cash Transactions | 2028 Notes Converted | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Non-cash transaction | $ 350,000,000 | |||||||||||||
2028 Notes | Convertible Senior Notes | Shares Received From 2028 Notes Capped Call Transactions | Common stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Converted shares (in shares) | shares | 289,675 |
Securitization Transactions - C
Securitization Transactions - Collateralized Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Collateralized debt | $ 1,438 | $ 1,238 |
Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 201 | |
Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 13 | |
Olimpia Fundo de Investimento Em Direitos Creditórios | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 105 | |
Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 125 | |
Seller Fundo De Investimento Em Direitos Creditórios | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 208 | |
Seller Fundo De Investimento Em Direitos Creditórios | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 103 | |
Mercado Crédito Consumo XVI | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 2 | |
Mercado Crédito Consumo XVII | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 6 | |
Mercado Crédito Consumo XVIII | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 12 | |
Mercado Crédito Consumo XIX | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 14 | |
Mercado Crédito Consumo XX | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 17 | |
Mercado Crédito Consumo XXI | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 16 | |
Mercado Crédito Consumo XXII | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 17 | |
Mercado Crédito Consumo XXIII | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 18 | |
Mercado Crédito Consumo XXIV | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 17 | |
Mercado Crédito Consumo XXV (*) | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 17 | |
Mercado Crédito XVII | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 3 | |
Mercado Crédito XVIII | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 5 | |
Mercado Crédito XIX | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 11 | |
Fideicomiso de administración y fuente de pago CIB/3756 | ||
Debt Instrument [Line Items] | ||
Collateralized debt | 239 | |
Fideicomiso de administración y fuente de pago CIB/3369 | ||
Debt Instrument [Line Items] | ||
Collateralized debt | $ 289 | |
CDI | Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
CDI | Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
CDI | Olimpia Fundo de Investimento Em Direitos Creditórios | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% | |
CDI | Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.35% | |
CDI | Seller Fundo De Investimento Em Direitos Creditórios | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.60% | |
CDI | Seller Fundo De Investimento Em Direitos Creditórios | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.80% | |
BADLAR Rate | Mercado Crédito Consumo XVI | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XVII | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XVIII | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XIX | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XX | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XXI | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XXIII | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XXIV | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito Consumo XXV (*) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito XVII | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito XVIII | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Mercado Crédito XIX | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XVI | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 60% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XVII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 60% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XVIII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 60% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XIX | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 60% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XX | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 60% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XXI | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 80% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XXII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 80% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XXIII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 80% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XXIV | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 100% | |
BADLAR Rate | Minimum | Mercado Crédito Consumo XXV (*) | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 100% | |
BADLAR Rate | Minimum | Mercado Crédito XVII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 35% | |
BADLAR Rate | Minimum | Mercado Crédito XVIII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 35% | |
BADLAR Rate | Minimum | Mercado Crédito XIX | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 100% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XVI | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 92% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XVII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 92% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XVIII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 92% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XIX | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 92% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XX | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 92% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XXI | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 120% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XXII | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2% | |
Effective interest rate | 120% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XXIII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 120% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XXIV | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 140% | |
BADLAR Rate | Maximum | Mercado Crédito Consumo XXV (*) | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 150% | |
BADLAR Rate | Maximum | Mercado Crédito XVII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 88% | |
BADLAR Rate | Maximum | Mercado Crédito XVIII | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 92% | |
BADLAR Rate | Maximum | Mercado Crédito XIX | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 140% | |
Diario Oficial | Fideicomiso de administración y fuente de pago CIB/3756 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 2.35% | |
Diario Oficial | Fideicomiso de administración y fuente de pago CIB/3369 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3% |
Securitization Transactions - A
Securitization Transactions - Assets and Liabilities of the Trust (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Securitization Transactions [Line Items] | ||
Restricted cash and cash equivalents | $ 1,085 | $ 1,453 |
Short-term investments | 3,320 | 2,339 |
Credit card receivables and other means of payments, net | 3,375 | 2,946 |
Loans receivable, net | 2,336 | 1,704 |
Total current assets | 13,050 | 10,953 |
Long-term investments | 149 | 322 |
Loans receivable, net | 42 | 32 |
Total non-current assets | 3,074 | 2,783 |
Total assets | 16,124 | 13,736 |
Accounts payable and accrued expenses | 1,910 | 1,393 |
Loans payable and other financial liabilities | 2,272 | 2,131 |
Other liabilities | 105 | 95 |
Total current liabilities | 10,306 | 8,562 |
Loans payable and other financial liabilities | 2,182 | 2,627 |
Total non-current liabilities | 3,077 | 3,347 |
Total liabilities | 13,383 | 11,909 |
Trust Created In Brazil | ||
Securitization Transactions [Line Items] | ||
Restricted cash and cash equivalents | 281 | 459 |
Short-term investments | 1 | 0 |
Credit card receivables and other means of payments, net | 106 | 317 |
Loans receivable, net | 1,169 | 799 |
Total current assets | 1,557 | 1,575 |
Long-term investments | 24 | 21 |
Loans receivable, net | 19 | 24 |
Total non-current assets | 43 | 45 |
Total assets | 1,600 | 1,620 |
Accounts payable and accrued expenses | 0 | 4 |
Loans payable and other financial liabilities | 664 | 535 |
Other liabilities | 4 | 1 |
Total current liabilities | 668 | 540 |
Loans payable and other financial liabilities | 774 | 703 |
Total non-current liabilities | 774 | 703 |
Total liabilities | $ 1,442 | $ 1,243 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 796 | $ 656 |
Operating lease liabilities | 786 | 656 |
Property and equipment, at cost | 106 | 87 |
Accumulated depreciation | (42) | (31) |
Property and equipment, net | 64 | 56 |
Loans payable and other financial liabilities | $ 60 | $ 51 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term, Operating leases | 7 years | 8 years |
Weighted average remaining lease term, Finance leases | 3 years | 3 years |
Weighted average discount rate, Operating leases | 10% | 10% |
Weighted average discount rate, Finance leases | 22% | 16% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 130 | $ 91 |
Depreciation of property and equipment | 15 | 13 |
Interest on lease liabilities | 7 | 6 |
Total finance lease cost | $ 22 | $ 19 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 129 | $ 85 |
Financing cash flows from finance leases | 21 | 14 |
Operating leases | 188 | 193 |
Finance leases | $ 20 | $ 15 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
One year or less | $ 171 | |
One year to two years | 171 | |
Two years to three years | 144 | |
Three years to four years | 118 | |
Four years to five years | 111 | |
Thereafter | 384 | |
Total lease payments | 1,099 | |
Less imputed interest | (313) | |
Total | 786 | $ 656 |
Finance Leases | ||
One year or less | 32 | |
One year to two years | 27 | |
Two years to three years | 22 | |
Three years to four years | 8 | |
Four years to five years | 0 | |
Thereafter | 0 | |
Total lease payments | 89 | |
Less imputed interest | (29) | |
Finance lease obligations | $ 60 | $ 51 |
Derivative instruments - Summar
Derivative instruments - Summary of Notional Amounts (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Designated as hedging instrument | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 62 | $ 109 |
Designated as hedging instrument | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 229 |
Designated as hedging instrument | Cross currency swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 244 | 133 |
Not designated as hedging instrument | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 39 | 110 |
Not designated as hedging instrument | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 249 | $ 480 |
Derivative instruments - Summ_2
Derivative instruments - Summary of Outstanding Derivative Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | $ (5) | $ (5) |
Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | (2) | (2) |
Foreign exchange contracts | Other current assets | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 0 | 1 |
Foreign exchange contracts | Other current liabilities | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 1 | 2 |
Foreign exchange contracts | Other current liabilities | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 2 | 2 |
Cross currency swap contracts designated as net investment hedge | Other current liabilities | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 4 | 2 |
Interest rate swap contracts | Other non-current assets | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 11 | 0 |
Interest rate swap contracts | Other current liabilities | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 0 | 8 |
Interest rate swap contracts | Other current liabilities | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 7 | 1 |
Interest rate swap contracts | Other non-current liabilities | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 0 | 6 |
Cross currency swap contracts designated as fair value hedge | Other current assets | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 5 | 0 |
Cross currency swap contracts designated as fair value hedge | Other current liabilities | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | 4 | 2 |
Cross currency swap contracts | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | (3) | (1) |
Cross currency swap contracts | Other non-current liabilities | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative | $ 0 | $ 1 |
Derivative instruments - Effect
Derivative instruments - Effect of Derivative Contracts on Comprehensive Income (Details) - Designated as hedging instrument $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Beginning Balance | $ (5) |
Amount of gain (loss) recognized in other comprehensive income | (8) |
Amount of (gain) loss reclassified from accumulated other comprehensive income | 8 |
End Balance | (5) |
Foreign exchange contracts | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Beginning Balance | (2) |
Amount of gain (loss) recognized in other comprehensive income | (9) |
Amount of (gain) loss reclassified from accumulated other comprehensive income | 9 |
End Balance | (2) |
Interest Swap Contracts | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Beginning Balance | (2) |
Amount of gain (loss) recognized in other comprehensive income | 8 |
Amount of (gain) loss reclassified from accumulated other comprehensive income | (6) |
End Balance | 0 |
Cross currency swap contracts | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Beginning Balance | (1) |
Amount of gain (loss) recognized in other comprehensive income | (7) |
Amount of (gain) loss reclassified from accumulated other comprehensive income | 5 |
End Balance | $ (3) |
Derivative instruments - Narrat
Derivative instruments - Narrative (Details) - Fair Value Hedging - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Loans Payable And Other Financial Liabilities Current | ||||
Derivatives, Fair Value [Line Items] | ||||
Carrying amount of the hedged item | $ 214 | $ 214 | $ 59 | |
Fair value hedge relationships less than | 1 | 1 | $ 1 | |
Designated as hedging instrument | Interest Expense | ||||
Derivatives, Fair Value [Line Items] | ||||
Effect of fair value relationships | $ 4 | $ 9 |
Derivative instruments - Effe_2
Derivative instruments - Effect of Derivative Contracts Not Designated as Hedging Instruments on Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 1 | $ 0 | $ (10) | $ 0 |
Gain (Loss) on Foreign Currency Fair Value Hedge Derivatives | 0 | (1) | 0 | (23) |
Gain (Loss) on Interest Rate Derivative Instruments Not Designated as Hedging Instruments | $ (4) | $ (5) | $ 1 | $ (5) |
Share repurchase program (Detai
Share repurchase program (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 21, 2023 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Shares acquired (in shares) | 425,913 | 425,913 | |||
Foreign currency loss | $ 498 | $ 265 | |||
February 2023 Stock Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Aggregate consideration amount of repurchase program | $ 157 | $ 157 | $ 900 | ||
Share Repurchase Programs | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares acquired (in shares) | 570,049 | 570,049 | |||
August 30, 2020 Board Authorized Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Foreign currency loss | $ 173 | $ 45 | $ 386 | $ 108 |
Uncategorized Items - meli-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |