MercadoLibre, Inc.
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ITEM 1. BUSINESS
MercadoLibre, Inc. (together with its subsidiaries “us,” “we,” “our,” "MercadoLibre," or the “Company”) is the leading online commerce and fintech ecosystem in Latin America. Our e-commerce platform is the leader in the region based on gross merchandise volume (“GMV”), and our fintech platform is the leader in monthly active users (“MAUs”) among fintech companies in Argentina, Chile and Mexico, and the second largest in Brazil. Mercado Libre's e-commerce platform is present in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela (deconsolidated since December 2017), Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in 8 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador). Our ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online, and the processing of payments online and offline, as well as offering a wide array of simple day-to-day financial services.
We offer our users an ecosystem of integrated e-commerce and digital financial services, which includes: the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and the Mercado Libre Classifieds service.
Our e-commerce platform provides buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people where penetration of e-commerce over total retail significantly lags benchmarks such as the United States of America (“U.S.”), the United Kingdom (“U.K.”) and China. We believe that we offer world-class technological and commercial solutions that address the distinctive cultural and geographic challenges of operating a digital commerce platform in Latin America.
The Mercado Libre Marketplace is a user-friendly online commerce platform that can be accessed through our mobile app or website. Third-party sellers (“3P”) account for most of the GMV transacted on the Marketplace. We complement this by selling directly to consumers on a first-party basis (“1P”) in selected categories where we can enhance price competitiveness and assortment; this accounts for less than 10% of GMV. The Marketplace has an extensive assortment of products, with a wide range of categories including consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods. We also have a selection of international products available, primarily from sellers in China and the U.S., through our cross-border trade (“CBT”) operations. Our users can also list vehicles, properties and services they are looking to sell via Mercado Libre Classifieds. These listings differ from our Marketplace listings because we charge placing fees only, not final value fees.
Mercado Envios is a logistics solution that is one of the value-added services that we offer to our sellers and buyers on our platform. The logistics services we offer are an integral and crucial part of our value proposition as they reduce friction between buyers and sellers, allow us to have greater control over the full user experience and enable faster deliveries at a more competitive cost than would otherwise be available with third-party carriers. Sellers that use Mercado Envios are eligible to access shipping subsidies that enable free or discounted shipping for consumers that buy sellers’ goods on our Marketplace. Our logistics network is built around fulfillment centers (which accounts for more than half of shipments) where sellers place their inventory in our warehouses, and cross-docking, where we collect items sold from sellers directly or via a network of thousands of partner stores (“MELI Places”) where sellers drop off sold items that need to be fed into our logistics network. MELI Places are also enabled for pick up of items purchased and processing of returns. Our transportation network includes dedicated aircraft, trucks and thousands of last-mile delivery vans, the vast majority of which are owned and operated by our third-party carriers.
Our advertising platform, Mercado Ads, is another value-added service that we offer to sellers on our platform and brands both on- and off-platform. The platform enables sellers and brands to access the millions of consumers who browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate. This enables advertisers to target highly granular audiences. The products we offer are Product Ads (sponsored listings), Brands Ads (product carrousels), Display Ads (banners) and Video Ads, the last two of which we are able to offer inventory off-platform as well as on our own Marketplace and fintech platform.
Mercado Shops is a service we offer to sellers to complement their business on our Marketplace. It is a digital storefront solution that allows sellers to set up, manage and promote their own digital stores, whilst using Mercado Libre's logistics, advertising and payments services. In January 2025, we announced the migration of Mercado Shops to “Mi Página,” which offers similar functionalities but is fully embedded within our Marketplace (without an external storefront). Mercado Shops was discontinued as of December 31, 2025.
Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplace by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments. This brought trust to the merchant-consumer relationship. In the countries in which Mercado Pago operates, it processes and settles all transactions on our Marketplace.
Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre’s Marketplace. We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America.
As we deployed our digitally-based payments solutions, we also observed that individuals and micro, small and medium-sized enterprises (“MSMEs”) in the physical world were being underserved or overlooked by incumbent payment providers and financial institutions in Latin America, and that a very large number of retail transactions were still being settled in cash throughout the region. Consequently, we deepened our fintech offering by launching payments processing services for offline merchants through the sale of point-of-sale (“POS”) devices and quick response (“QR”) codes.
Mercado Pago also offers an array of day-to-day financial services for consumers and merchants through our digital account. The digital account initially offered transfers and simple payments, but today the services offered are much broader.
5 | MercadoLibre, Inc.
In our main markets, we currently offer the following solutions:
■Digital payment solutions for utilities, mobile phone top up, peer-to-peer payments and more through our digital account;
■Pre-paid cards and debit cards for users to spend and withdraw their account balances from their Mercado Pago digital account;
■Credit cards and merchant and consumer credits, both on and off the Mercado Libre Marketplace;
■Insurance products such as extended warranties, personal accident cover, theft and damage policies, among others;
■Savings and investment products to invest balances stored on Mercado Pago digital accounts; and
■A cryptocurrency buy, hold and sell feature of our digital account in Brazil, Mexico and Chile, for users to buy, hold and sell selected global cryptocurrencies and stablecoins, and Meli Dólar.
Our lending solution is available in Argentina, Brazil, Mexico and Chile. We offer loans mostly to merchants and consumers that already form part of our user base, many of whom have historically been underserved or overlooked by financial institutions and therefore suffer from a lack of access to credit. Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution. Our distribution capabilities and in-depth understanding of our customers’ behavior and merchants’ sales on the Mercado Libre Marketplace combined with machine learning (“ML”) (pillar of artificial intelligence (“AI”)) algorithms have allowed us to develop our own proprietary credit risk models with unique data that differentiate our scoring from traditional financial institutions. These models enable us to understand and better predict the behavior of our user and originate loans while maintaining acceptable levels of uncollectible debts.
We offer credit lines to merchants that sell on our Marketplace and merchants that use our online, POS and QR payments processing services. Because our online merchants’ business flows through Mercado Pago, we are able to collect principal and interest payments from their existing sales on Mercado Libre’s Marketplace, meaningfully reducing the risk of uncollectability on the loans we originate to our merchants.
Consumers can access credit lines once we score and approve them through our proprietary models. Loans can be used for a purchase on the Mercado Libre Marketplace, or on third party sites that use our payments processing technology. Since 2019, we also extend personal loans to recurring consumer credit borrowers, allowing them to buy products and services outside of our platform via the Mercado Pago digital account. In 2021, we launched the Mercado Pago credit card in Brazil, and this was followed by Mexico in 2023 and Argentina in 2025. It is free, internationally accepted, digitally managed and can be used on- and off-platform. Additionally, in Brazil we offer asset-backed loans to ease the acquisition of cars through financing granted to our users.
Our asset management product, which is available in Argentina, Brazil, Mexico and Chile, is a critical pillar of our financial services offering that enables us to compete with large banks. This product offers remuneration on balances held in the Mercado Pago digital account that is greater than traditional checking and savings accounts. This enables our users to earn a return with funds remaining available for withdrawal or to make payments without their funds being tied up in a time deposit. This product is another way in which we have innovated to promote financial inclusion in a region where there are many underbanked or unbanked consumers. In 2022, we launched savings products in Brazil that enable users to purchase certificates of deposit, which have a higher return than our basic asset management product. In partnership with a third party, we also launched three investment fund options in Brazil, which enable our users to diversify their investment portfolio in an accessible way and with options for quick withdrawal.
As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago account in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively. This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and offers the blockchain infrastructure platform. This feature is available for all users through their Mercado Pago account. In 2024 and 2025 we launched “Meli Dólar,” a stablecoin that is pegged to the US dollar, in Brazil, Mexico and Chile. Members of our loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without any fees.
In 2025, we launched the latest iteration of the Meli+ loyalty program in Argentina, Chile and Colombia, following its launch in Brazil and Mexico in 2024. The latest iteration introduces a tiered structure designed to provide users with a choice of benefits, which differ depending on the country. The Meli+ Essential tier includes ecosystem-wide benefits such as enhanced shipping options, cashback and additional installments on Marketplace purchases. The Meli+ Total tier includes all such benefits and also provides free access to Disney+, as well as discounts on other streaming platforms, such as HBO Max and Paramount+. In Brazil, we introduced a new subscription tier, Meli+ Mega, which consolidates multiple entertainment services into a unique single-subscription bundle, offering access to streaming platforms such as Netflix, Disney+, HBO Max and Apple TV+.
We continue to scale Mercado Play, an advertising-based video on demand (“AVOD”) streaming service first launched in 2023 and available to all users in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay. In 2025, Mercado Play previously available only through our apps, was made available on connected TVs for the first time. Mercado Play serves as a tool to drive user engagement on Mercado Libre and is a new platform to serve video advertising, complementing the portfolio of ads formats available through Mercado Ads. The content we offer through Mercado Play is sourced from third-party studios, with whom we have revenue sharing agreements.
6 | MercadoLibre, Inc.
We have two distinctive revenue streams in our business:
■Commerce revenue
Our Commerce business is comprised of two primary revenue streams: Services and Product Sales. Our Services revenue stream is mainly generated from Marketplace fees that include final value fees, which include the use of the payment solution, and flat fees for certain transactions below a certain merchandise value, related shipping fees, net of third-party carrier costs when we act as an agent, and storage fees, classifieds fees, advertising sales fees, membership subscription fees and fees from other ancillary businesses. Our Product Sales revenue stream entails selling merchandise on a first-party basis from our own inventory and related shipping fees.
■Fintech revenue
Our Fintech business is comprised of three primary revenue streams: (a) Financial services and income, which includes revenues from commissions we charge for transactions off-platform derived from use of the payment solution and asset management product, offering installments, either when we finance transactions directly or when we sell the corresponding financial assets, interest earned on cash and investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains pass through our Brazilian users in connection with our asset management product, as well as Mercado Pago debit card commissions, and insurtech fees; (b) Credit Revenues, which includes revenues from interest earned on loans and advances granted to merchants and consumers, and interest and commissions earned on Mercado Pago credit card transactions; and (c) Fintech Product Sales, which includes revenues from sales of mobile point of sales devices.
Our strategy
Our main focus is to serve people in Latin America by enabling wider access to e-commerce, digital payments and financial services. By providing compelling technology-based solutions that democratize commerce and money, we contribute to the development of a large and growing digital economy in the region.
We serve our buyers by giving them access to a broad and affordable variety of products and services, a selection we believe to be larger than otherwise available to them via other online and offline sources serving our Latin American markets. We believe we serve our sellers by giving them access to a larger and more geographically diverse user base at a lower overall cost and investment than offline venues serving our Latin American markets. Additionally, we provide payment settlement services and shipping solutions to facilitate such transactions, and advertising solutions to promote them.
We also serve our users by making financial services more accessible through different credit and other financial products and by fostering entrepreneurship and social mobility, with the goal of creating significant value for our stakeholders.
More broadly, we strive to make inefficient markets more efficient through technology and in that process generate value for all our stakeholders.
To achieve these objectives, we intend to pursue the following strategies:
■Expand into additional transactional service offerings. Our strategic focus is to enable online transactions of multiple types of goods and services throughout Latin America. Consequently, we strive to launch online transactional offerings in new product and service categories where we believe business opportunities exist. These new transactional offerings include, but are not limited to: (a) offering additional product categories in our Marketplace, (b) bringing new brands to our Marketplace, (c) complementing our 3P selection with 1P goods in selected categories where we can enhance price competitiveness and assortment and (d) expanding our presence in vehicle, real estate and services classifieds.
■Continue to improve the shopping experience for our users.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of our operations in conjunction with our audited consolidated financial statements and the notes to those statements included elsewhere in this report. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors” and elsewhere in this report.
The discussion and analysis of our financial condition and results of operations has been organized to present the following:
■a brief overview of our Company;
■a review of our critical accounting policies and estimates;
■a discussion of our principal trends and results of operations for the years ended December 31, 2025, 2024 and 2023;
■a discussion of the principal factors that influence our results of operations, financial condition and liquidity;
■a discussion of our liquidity and capital resources and a discussion of our capital expenditures;
■a description of our key performance indicators; and
■a description of our non-GAAP financial measures.
For discussion on results from 2024 compared to 2023, please refer to “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2024.
Certain monetary amounts included elsewhere in this document have been subject to rounding adjustments. Accordingly, figures shown as totals and percentages in certain tables may not be the arithmetic aggregation of the figures that precede them.
Business Overview
Our e-commerce platform is the leader in the Latin America region based on GMV, and our fintech platform is the leader in MAUs amongst fintech companies in Argentina, Chile and Mexico, and the second largest in Brazil. Mercado Libre's e-commerce platform is present in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela, Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in 8 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador). Our ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online, and the processing of payments online and offline, as well as offering a wide array of simple day-to-day financial services.
We offer our users an ecosystem of integrated e-commerce and digital financial services, which includes: the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and the Mercado Libre Classifieds service.
Our e-commerce platform provides buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people where penetration of e-commerce over total retail significantly lags benchmarks such as the United States of America (“U.S.”), the United Kingdom (“U.K.”) and China. We believe that we offer world-class technological and commercial solutions that address the distinctive cultural and geographic challenges of operating a digital commerce platform in Latin America.
The Mercado Libre Marketplace is a user-friendly online commerce platform that can be accessed through our mobile app or website. Third-party sellers (“3P”) account for most of the GMV transacted on the Marketplace. We complement this by selling directly to consumers on a first-party basis (“1P”) in selected categories where we can enhance price competitiveness and assortment; this accounts for less than 10% of GMV. The Marketplace has an extensive assortment of products, with a wide range of categories including consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods. We also have a selection of international products available, primarily from sellers in China and the U.S., through our cross-border trade (“CBT”) operations. Our users can also list vehicles, properties and services they are looking to sell via Mercado Libre Classifieds. These listings differ from our Marketplace listings because we charge placing fees only, not final value fees.
Mercado Envios is a logistics solution that is one of the value-added services that we offer to our sellers and buyers on our platform. The logistics services we offer are an integral and crucial part of our value proposition as they reduce friction between buyers and sellers, allow us to have greater control over the full user experience and enable faster deliveries at a more competitive cost than would otherwise be available with third-party carriers. Sellers that use Mercado Envios are eligible to access shipping subsidies that enable free or discounted shipping for consumers that buy sellers’ goods on our Marketplace. Our logistics network is built around fulfillment centers (which accounts for more than half of shipments) where sellers place their inventory in our warehouses, and cross-docking, where we collect items sold from sellers directly or via a network of thousands of partner stores (“MELI Places”) where sellers drop off sold items that need to be fed into our logistics network. MELI Places are also enabled for pick up of items purchased and processing of returns. Our transportation network includes dedicated aircraft, trucks and thousands of last-mile delivery vans, the vast majority of which are owned and operated by our third-party carriers.
39 | MercadoLibre, Inc.
Our advertising platform, Mercado Ads, is another value-added service that we offer to sellers on our platform and brands both on- and off-platform. The platform enables sellers and brands to access the millions of consumers who browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate. This enables advertisers to target highly granular audiences. The products we offer are Product Ads (sponsored listings), Brands Ads (product carrousels), Display Ads (banners) and Video Ads, the last two of which we are able to offer inventory off-platform as well as on our own Marketplace and fintech platform.
Mercado Shops is a service we offer to sellers to complement their business on our Marketplace. It is a digital storefront solution that allows sellers to set up, manage and promote their own digital stores, whilst using Mercado Libre's logistics, advertising and payments services. In January 2025, we announced the migration of Mercado Shops to “Mi Página,” which offers similar functionalities but is fully embedded within our Marketplace (without an external storefront). Mercado Shops was discontinued as of December 31, 2025.
Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplace by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments. This brought trust to the merchant-consumer relationship. In the countries in which Mercado Pago operates, it processes and settles all transactions on our Marketplace.
Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre’s Marketplace. We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America.
Our lending solution is available in Argentina, Brazil, Mexico and Chile. We offer loans mostly to merchants and consumers that already form part of our user base, many of whom have historically been underserved or overlooked by financial institutions and therefore suffer from a lack of access to credit. Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution.
Our asset management product, which is available in Argentina, Brazil, Mexico and Chile, is a critical pillar of our financial services offering that enables us to compete with large banks. This product offers remuneration on balances held in the Mercado Pago digital account that is greater than traditional checking and savings accounts. This enables our users to earn a return with funds remaining available for withdrawal or to make payments without their funds being tied up in a time deposit.
As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago account in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively. This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and offers the blockchain infrastructure platform. This feature is available for all users through their Mercado Pago account. In 2024 and 2025 we launched “Meli Dólar,” a stablecoin that is pegged to the US dollar, in Brazil, Mexico and Chile. Members of our loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without any fees.
Reporting Segments and Geographic Information
Our segment reporting is based on geography, which is the criterion our Management currently uses to evaluate our segment performance. Our geographic segments are Brazil, Mexico, Argentina and Other Countries (including Bermuda, Chile, China, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.). Although we discuss long-term trends in our business, it is our policy not to provide earnings guidance in the traditional sense. We believe that uncertain conditions make the forecasting of near-term results difficult. Further, we seek to make decisions focused primarily on the long-term welfare of our Company and believe focusing on short-term earnings does not best serve the interests of our stockholders. We believe that execution of key strategic initiatives as well as our expectations for long-term growth in our markets will best create stockholder value. A long-term focus may make it more difficult for industry analysts and the market to evaluate the value of our Company, which could reduce the value of our common stock or permit competitors with short-term tactics to grow more rapidly than us. We, therefore, encourage potential investors to consider this strategy before making an investment in our common stock.
The following table sets forth the percentage of our consolidated net revenues and financial income by segment for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31, | |||||||||||||||||
(% of total consolidated net revenues and financial income) | 2025 | 2024 | 2023 (1) | ||||||||||||||
Brazil | 52.6 | % | 54.9 | % | 51.8 | % | |||||||||||
Mexico | 22.4 | 22.4 | 20.3 | ||||||||||||||
Argentina | 20.6 | 18.4 | 23.5 | ||||||||||||||
Other countries | 4.4 | 4.3 | 4.4 | ||||||||||||||
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.
Net revenues and financial income for the year ended December 31, 2025 as compared to the year ended December 31, 2024 are described in “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of operations— Net revenues and financial income.
40 | MercadoLibre, Inc.
Critical Accounting Policies and Estimates
The preparation of our audited consolidated financial statements and related notes requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We have based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management has discussed the development, selection and disclosure of these estimates with our audit committee and our board of directors. Actual results may differ from these estimates under different assumptions or conditions.
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our audited consolidated financial statements. You should read the following descriptions of critical accounting policies, judgments and estimates in conjunction with our audited consolidated financial statements and the notes thereto and other disclosures included in this report.
For an analysis of our Critical Accounting Policies and Estimates please refer to Note 2 – Summary of significant accounting policies to our audited consolidated financial statements included elsewhere in this report.
Allowance for doubtful accounts
For loans receivable that share similar risk characteristics such as product type, country, unpaid installments, days delinquent, and other relevant factors, we estimate the lifetime expected credit loss allowance based on a collective assessment. The same methodology is applied for the measurement of the current expected credit losses (“CECL”) for the exposure to off balance sheet unused agreed loan commitment on credit cards portfolio. The lifetime expected credit losses is determined by applying probability of default and loss given default models to monthly projected exposures, then discounting these cash flows to present value using the portfolio’s loans interest rate, estimated as a weighted average of the original effective interest rate of all the loans that conform to the portfolio segment. The probability of default is an estimation of the likelihood that a loan receivable will default over a given time horizon. For most of the products, probability of default models (“PDs”) are estimated using a survival methodology; these PDs are constructed using individual default information through time, taking into account the expected future delinquency rate (forward-looking models) using three probability-weighted macroeconomic scenarios (base, optimistic and pessimistic) following the increased complexity and possible outcomes of the global, regional and domestic macroeconomic performance, so that the models include macroeconomic outlook or projections and recent performance. With this model, we estimate marginal monthly default probabilities for each delinquency bucket, type of product and country. Each marginal monthly probability of default represents a different possible scenario of default. However, for new products with limited historical information such as asset backed loans, we estimate PDs using roll rates/transition, until sufficient history is available to migrate to fully empirical approaches. The exposure at default is equal to the receivables’ expected outstanding principal, interest and other allowable balances. We estimate the exposure at default that the portfolio of loans would have in each possible moment of default, meaning for each possible scenario mentioned above. For credit cards loans we estimate an amortization pattern based on historical information. Also, for Brazil credit cards loans, we use, as applicable, a one month credit conversion factor (“CCF”) estimated according to terms and conditions, considering the increase in the volume of credit cards portfolio. The loss given default (“LGD”) is the percentage of the exposure at default that is not recoverable. The LGD is estimated using work-out and Chainladder approaches. This percentage depends on days past due, type of product and country, and is estimated by measuring an average of historical recovery rates from defaulted credits. For asset-backed products, since there is almost no information to apply either a work-out or Chainladder approach, we use the Basel III guidelines for credit risk management. The measurement of the CECL is based on probability-weighted scenarios (probability of default for each month), in view of past events, current conditions and adjustments to reflect the reasonable and supportable forecast of future economic conditions. When Management considers that it is needed, we use an expert credit judgment overlay to reflect factors not captured in the results produced by the CECL model. Considering a hypothetical increase in the probability of default of 10%, we would have recognized an increase in our allowance for doubtful accounts for loans receivable and off-balance sheet unused agreed loan commitment on credit cards portfolio of approximately $99 million.
We believe that the accounting estimate related to allowance for doubtful accounts on loans receivable is a critical accounting estimate because it requires Management to make complex assumptions and scenarios to estimate the CECL.
Contingencies
In connection with certain pending litigation and other claims, we have estimated the range of probable loss and provided for such losses through charges to our consolidated statements of income. These estimates are based on our assessment of the facts and circumstances and historical information related to actions filed against the Company at each balance sheet date and are subject to change based upon new information and future events.
From time to time, we are involved in disputes that arise in the ordinary course of business. We are currently involved in certain proceedings as discussed in “Item 3—Legal Proceedings,” and in Note 14 – Commitments and Contingencies to our audited consolidated financial statements. We believe that we have meritorious defenses to the claims against us, and we will defend ourselves accordingly. However, even if successful, our defense could be costly and could divert Management’s time. If the plaintiffs were to prevail on certain claims, we might be forced to pay material damages or modify our business practices. Any of these consequences could materially harm our business and could have a material adverse impact on our financial position, results of operations or cash flows.
41 | MercadoLibre, Inc.
Income taxes
We are required to recognize a provision for income taxes based upon taxable income and temporary differences between the book and tax bases of our assets and liabilities for each of the tax jurisdictions in which we operate. This process requires a calculation of taxes payable under currently enacted tax laws in each jurisdiction and an analysis of temporary differences between the book and tax bases of our assets and liabilities, including various accruals, allowances, depreciation and amortization. The tax effect of these temporary differences and the estimated tax benefit from our tax net operating losses are reported as deferred tax assets and liabilities in our consolidated balance sheets. We also assess the likelihood that our net deferred tax assets will be realized from future taxable income. To the extent we believe that it is more likely than not that some portion or all of our deferred tax assets will not be realized, we establish a valuation allowance. As far we establish a valuation allowance or change the allowance in a period, we reflect the change with a corresponding increase or decrease in our “Income tax expense” line in our consolidated statements of income. Please refer to Note 2 – Summary of significant accounting policies and Note 13 – Income taxes to our audited consolidated financial statements for additional information regarding income tax.
Results of operations
Principal trends in results of operations
The information included in this section sets forth, for the years presented, certain data from our consolidated statements of income. This information should be read in conjunction with our audited consolidated financial statements and the notes to those statements included elsewhere in this report.
Net revenues and financial income
We disaggregate revenues into four geographical reporting segments. Within each of our segments, the services we provide and the products we sell generally fall into two distinct revenue streams: “Commerce” and “Fintech.”
Commerce revenues are mainly generated from:
■marketplace fees that include final value fees and flat fees. Final value fees represent a percentage of the sale value that is charged to the seller once an item is successfully sold and flat fees represent a fixed charge for certain transactions below a certain merchandise value;
■first party sales, which are generated when control of the good is transferred, upon delivery to our customers;
■shipping fees, which are generated when an item is delivered through our shipping service. When we act as an agent, revenues derived from the shipping services are recognized at the time the transaction is successfully concluded for third-party sales, and presented net of the transportation costs charged by third-party carriers. When we act as principal, revenues derived from shipping services are recognized upon delivery of the good to the customer, and presented on a gross basis. In addition, the Company generates storage fees, which are charged to the seller for the utilization of the Company’s fulfillment facilities;
■ad sales fees due to advertising services provided to sellers, vendors, brands and others, through product searches (product ads and brand ads) and display formats (including video ads and display programmatic), which are recognized based on the number of clicks and impressions, respectively;
■classifieds fees due to offerings in vehicles, real estate and services, which are charged to sellers who opt to give their listings greater exposure throughout our websites;
■subscription fees associated with MELI+ memberships and third party digital content subscriptions; and
■fees from other ancillary businesses.
Fintech revenues and financial income are attributable to:
■commissions representing a percentage of the payment volume processed that are charged to sellers in connection with off-Marketplace platform transactions;
■commissions from additional fees we charge when a buyer elects to pay in installments through our Mercado Pago platform, for transactions that occur either on or off our Marketplace platform;
■interest, cash advances and fees from credit cards, merchant, consumer and asset-backed loans granted under our lending solution;
■revenues from our asset management product;
■interest earned on investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains passed through to our Brazilian users in connection with our asset management product;
■commissions that we charge from transactions carried out with Mercado Pago credit and debit cards;
■revenues from the sale of mobile points of sale products;
■revenues from insurtech fees;
■commissions from additional fees we charge when our sellers elect to withdraw cash; and
■fees from other ancillary services.
42 | MercadoLibre, Inc.
Although we also process payments on the Marketplace, we do not charge sellers an added commission for this service, as it is already included in the Marketplace final value fee that we charge.
The functional currency for each country’s operations is the country’s local currency, except for Argentina, where the functional currency is the U.S. dollar due to Argentina’s status as a highly inflationary economy. Our net revenues and financial income are generated in multiple foreign currencies and then translated into U.S. dollars at the average monthly exchange rate. Please refer to Note 2 – Summary of significant accounting policies to our audited consolidated financial statements for further detail on foreign currency translation.
We have a highly fragmented customer revenue base given the large numbers of sellers and buyers who use our platforms. For the years ended December 31, 2025, 2024 and 2023, no single customer accounted for more than 5.0% of our net revenues and financial income.
Our net revenues and financial income grew during the year 2025, boosted by the growth of credit originations from our lending solution, an increase in total payment volume and fees due to payment in installments in our Mercado Pago platform, and the growth in gross merchandise volume.
The following table summarizes our consolidated net revenues and financial income for the years ended December 31, 2025, 2024 and 2023:
| Year Ended December 31, | Change from 2024 to 2025 | Year Ended December 31, | Change from 2023 to 2024 | |||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | in Dollars | in % | 2024 | 2023 (1) | in Dollars | in % | |||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 28,893 | $ | 20,777 | $ | 8,116 | 39.1% | $ | 20,777 | $ | 15,107 | $ | 5,670 | 37.5% | ||||||||||||||||||||||||||||||||
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.
The following table summarizes our consolidated net revenues and financial income by revenue stream and geographic segment for the years ended December 31, 2025, 2024 and 2023:
| Consolidated net revenues and financial income | Year Ended December 31, | Change from 2024 to 2025 | Year Ended December 31, | Change from 2023 to 2024 | ||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | in Dollars | in % | 2024 | 2023 (1) | in Dollars | in % | |||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||
| Brazil | ||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | $ | 9,184 | $ | 7,038 | $ | 2,146 | 30.5 | % | $ | 7,038 | $ | 4,512 | $ | 2,526 | 56.0 | % | ||||||||||||||||||||||||||||||
| Fintech | 6,017 | 4,368 | 1,649 | 37.8 | 4,368 | 3,309 | 1,059 | 32.0 | ||||||||||||||||||||||||||||||||||||||
| 15,201 | 11,406 | 3,795 | 33.3 | 11,406 | 7,821 | 3,585 | 45.8 | |||||||||||||||||||||||||||||||||||||||
Mexico | ||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 4,185 | 3,072 | 1,113 | 36.2 | 3,072 | 1,979 | 1,093 | 55.2 | ||||||||||||||||||||||||||||||||||||||
| Fintech | 2,290 | 1,592 | 698 | 43.8 | 1,592 | 1,092 | 500 | 45.8 | ||||||||||||||||||||||||||||||||||||||
| 6,475 | 4,664 | 1,811 | 38.8 | 4,664 | 3,071 | 1,593 | 51.9 | |||||||||||||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 2,034 | 1,407 | 627 | 44.6 | 1,407 | 1,261 | 146 | 11.6 | ||||||||||||||||||||||||||||||||||||||
| Fintech | 3,928 | 2,411 | 1,517 | 62.9 | 2,411 | 2,289 | 122 | 5.3 | ||||||||||||||||||||||||||||||||||||||
| 5,962 | 3,818 | 2,144 | 56.2 | 3,818 | 3,550 | 268 | 7.5 | |||||||||||||||||||||||||||||||||||||||
| Other countries | ||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 891 | 642 | 249 | 38.8 | 642 | 449 | 193 | 43.0 | ||||||||||||||||||||||||||||||||||||||
| Fintech | 364 | 247 | 117 | 47.4 | 247 | 216 | 31 | 14.4 | ||||||||||||||||||||||||||||||||||||||
| 1,255 | 889 | 366 | 41.2 | 889 | 665 | 224 | 33.7 | |||||||||||||||||||||||||||||||||||||||
| Consolidated | ||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 16,294 | 12,159 | 4,135 | 34.0 | 12,159 | 8,201 | 3,958 | 48.3 | ||||||||||||||||||||||||||||||||||||||
| Fintech | 12,599 | 8,618 | 3,981 | 46.2 | 8,618 | 6,906 | 1,712 | 24.8 | ||||||||||||||||||||||||||||||||||||||
| Total | $ | 28,893 | $ | 20,777 | $ | 8,116 | 39.1 | % | $ | 20,777 | $ | 15,107 | $ | 5,670 | 37.5 | % | ||||||||||||||||||||||||||||||
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.
43 | MercadoLibre, Inc.
See Note 8 – Segments of our audited consolidated financial statements for further information regarding our net revenues and financial income disaggregated by similar products and services for the years ended December 31, 2025, 2024 and 2023.
Our Commerce revenues grew $4,135 million, or 34.0%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024. This increase in Commerce revenues was primarily attributable to:
■an increase of $2,674 million in Commerce services revenues mainly related to a 26.4% increase in gross merchandise volume and higher flat fee contributions for low gross merchandise volume transactions. Shipping carrier costs, which are netted against revenues, decreased $42 million, from $1,021 million for the year ended December 31, 2024 to $979 million for the year ended December 31, 2025, mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent during the first quarter of 2025; and
■an increase of $1,461 million in our revenues from Commerce products sales, mainly in Brazil, Mexico and Argentina.
Our Fintech revenues grew 46.2%, from $8,618 million for the year ended December 31, 2024, to $12,599 million for the year ended December 31, 2025. This increase is mainly generated by:
■an increase of $2,258 million in our Credits revenues, mainly as a consequence of higher originations.
■an increase of $1,716 million in our revenues from Financial services and income, mainly related to our off-platform transactional fees and financing transactions, as a result of a 41.3% increase in our total payment volume.
Brazil
Commerce revenues in Brazil increased 30.5% in the year ended December 31, 2025 as compared to 2024. This increase was generated by an increase of $1,164 million in our Commerce services revenues and an increase of $982 million in our revenues from Commerce products sales. Fintech revenues grew by 37.8%, a $1,649 million increase, during the year ended December 31, 2025 as compared to 2024, mainly driven by an increase of $1,236 million in our Credits revenues and an increase of $413 million in our revenues from Financial services and income.
Mexico
Commerce revenues in Mexico increased 36.2% in the year ended December 31, 2025 as compared to 2024. This increase was generated by an increase of $824 million in our Commerce services revenues and an increase of $289 million in our revenues from Commerce products sales. Fintech revenues grew 43.8%, a $698 million increase, during the year ended December 31, 2025 as compared to 2024, mainly driven by an increase of $361 million in our Credits revenues and an increase of $331 million in our revenues from Financial services and income.
Argentina
Commerce revenues in Argentina increased 44.6% in the year ended December 31, 2025, as compared to 2024. This increase was generated by an increase of $515 million in our Commerce services revenues and an increase of $112 million in our revenues from Commerce products sales. Fintech revenues grew 62.9%, a $1,517 million increase, during the year ended December 31, 2025 as compared to 2024, mainly driven by an increase of $861 million in our revenues from Financial services and income and an increase of $656 million in our Credits revenues.
The following table sets forth our total net revenues and financial income and the sequential quarterly growth of these net revenues and financial income for the periods described below:
| Quarter Ended | |||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | ||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||
| 2025 | |||||||||||||||||||||||
| Net revenues and financial income | $ | 5,935 | $ | 6,790 | $ | 7,409 | $ | 8,759 | |||||||||||||||
| Percent change from prior quarter | (2%) | 14% | 9% | 18% | |||||||||||||||||||
| 2024 | |||||||||||||||||||||||
| Net revenues and financial income | $ | 4,333 | $ | 5,073 | $ | 5,312 | $ | 6,059 | |||||||||||||||
| Percent change from prior quarter | (2%) | 17% | 5% | 14% | |||||||||||||||||||
2023 (1) | |||||||||||||||||||||||
| Net revenues and financial income | $ | 3,186 | $ | 3,585 | $ | 3,927 | $ | 4,409 | |||||||||||||||
| Percent change from prior quarter | 2% | 13% | 10% | 12% | |||||||||||||||||||
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.
44 | MercadoLibre, Inc.
The following table sets forth the growth in net revenues and financial income in local currencies, for the years ended December 31, 2025 and 2024 as compared to the same periods in 2024 and 2023, respectively:
| Changes from | |||||||||||
| (% of revenue growth in Local Currency) | 2024 to 2025 (1) | 2023 to 2024 (2) | |||||||||
| Brazil | 37.0 | % | 58.5 | % | |||||||
| Mexico | 43.5 | 58.7 | |||||||||
Argentina (3) | 111.7 | 244.0 | |||||||||
| Other countries | 40.8 | 44.1 | |||||||||
| Total consolidated | 52.4 | % | 101.5 | % | |||||||
(1) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2024 and applying them to the corresponding months in 2025, so as to calculate what our financial results would have been had exchange rates remained stable from one year to the next. See also the “Non-GAAP Measures of Financial Performance” section for details on FX neutral measures.
(2) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2023 and applying them to the corresponding months in 2024, so as to calculate what our financial results would have been had exchange rates remained stable from one year to the next. See also the “Non-GAAP Measures of Financial Performance” section for details on FX neutral measures.
(3) For the year ended December 31, 2025 and 2023, the average inter-annual inflation rate in our Argentine segment of 44.5% and 127.9%, respectively, was higher than the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 35.4% and 120.0%, respectively, while for the year ended December 31, 2024, the average inter-annual inflation rate in our Argentine segment of 236.8%, was lower than the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 240.5%. See also "Item 1A. Risk Factors - Risks related to doing business in Latin America - Local currencies used in the conduct of our business are subject to depreciation, volatility and exchange controls."
Cost of net revenues and financial expenses
Cost of net revenues and financial expenses primarily includes shipping operation costs (including warehousing costs), carrier and other operating costs, cost of goods sold, collection fees, sales taxes, funding costs related to our fintech business, fraud prevention expenses, hosting and site operation fees, certain tax withholding related to export duties, compensation for customer support personnel and depreciation and amortization. The following table presents cost of net revenues and financial expenses for the years indicated:
| Year Ended December 31, | Change from 2024 to 2025 | Year Ended December 31, | Change from 2023 to 2024 | |||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | in Dollars | in % | 2024 | 2023 (1) | in Dollars | in % | |||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||
| Cost of net revenues and financial expenses | $ | 16,035 | $ | 11,200 | $ | 4,835 | 43.2% | $ | 11,200 | $ | 7,517 | $ | 3,683 | 49.0% | ||||||||||||||||||||||||||||||||
As a percentage of net revenues and financial income | 55.5% | 53.9% | 53.9% | 49.8% | ||||||||||||||||||||||||||||||||||||||||||
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.
For the year ended December 31, 2025 as compared to the year ended December 31, 2024, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $1,912 million increase in shipping operating and carrier costs; ii) $1,166 million increase in cost of sales of goods mainly in Brazil, Mexico and Argentina; iii) $533 million increase in collection fees, across all of our main segments, as a result of the higher total payment volume of Mercado Pago in those countries; iv) $523 million increase in other fintech costs mainly related to higher funding costs of Mercado Pago; v) $418 million increase in sales taxes; and vi) $210 million increase in hosting and site operation fees.
Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues, which are classified as a cost of net revenues and financial expenses. These taxes represented 6.2%, 6.6% and 7.7% of net revenues and financial income for the years ended December 31, 2025, 2024 and 2023, respectively.
Gross profit margins
Our gross profit margin is defined as total net revenues and financial income minus total cost of net revenues and financial expenses, as a percentage of net revenues and financial income.
Our cost structure is directly affected by the level of operations of our services, and our strategic plan on gross profit is built on factors such as an ample liquidity to fund expenses and investments and a cost-effective capital structure.
For the years ended December 31, 2025 and 2024, our gross profit margins were 44.5% and 46.1%, respectively. The decrease in our gross profit margin resulted mainly due to the reduction of our free shipping threshold in Brazil, together with an increase in our cost of sales of goods and funding costs related to our fintech business, as a percentage of net revenues and financial income, partially offset by a decrease of our collection fees and sales taxes, as a percentage of net revenues and financial income.
45 | MercadoLibre, Inc.
In the future, our gross profit margin could continue declining if we maintain the growth of our sales of goods business, which has a lower pure product margin, due to marketing initiatives or building up our logistics network and if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues and financial income trend.
Product and technology development expenses
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-22 | Aguzin Alejandro Nicolas | Director | Buy | +600 ×2 | $1,655.93 | $993,556 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-05 10-Q expected by 2026-08-11 (in 51 days)
- ~2026-10-30 10-Q expected by 2026-11-05 (in 137 days)
- ~2027-02-24 10-K expected by 2027-03-01 (in 254 days)
- ~2027-05-08 10-Q expected by 2027-05-14 (in 327 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-08 10-Q Quarterly Report
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-23 DEF 14A Proxy Statement
- 2026-04-03 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-02-25 10-K Annual Report
- 2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-09 8-K Other Events; Financial Statements and Exhibits
- 2025-12-05 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-10-30 10-Q Quarterly Report
- 2025-10-29 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-16 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-08-05 10-Q Quarterly Report
- 2025-08-04 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-01 8-K Other Events
- 2025-05-21 8-K Officer/Director Change