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What changed in MERCADOLIBRE INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MERCADOLIBRE INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+560 added−589 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-21)

Top changes in MERCADOLIBRE INC's 2025 10-K

560 paragraphs added · 589 removed · 434 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

90 edited+48 added−71 removed85 unchanged
Biggest changeOn January 2, 2024, article 28 of Law 14,690 came into force, which caps the total amount that may be charged to a credit card holder in the form of interest and financial charges at the value of the original debt.
Biggest changeT able of Contents For postpaid credit, since January 2, 2024, a cap has been in force for credit card revolving balances and invoice installment plans: interest and financial charges may not exceed 100% of the original debt amount, pursuant to Article 28 of Law No. 14,690/2023 and the CMN Resolution 5,112/2023, which details the calculation of the “original amount,” invoice disclosures, and balance portability.
While we are currently a market leader in a number of the markets in which we operate, we currently or potentially could compete with marketplace operators, businesses that offer business-to-consumer online e-commerce services or others with a focus on specific vertical categories, as well as brick and mortar retailers that have launched online offerings.
While we are currently the market leader in a number of the markets in which we operate, we currently or potentially could compete with marketplace operators, businesses that offer business-to-consumer online e-commerce services or others with a focus on specific vertical categories, as well as brick and mortar retailers that have launched online offerings.
Amongst the regulatory obligations to which Electronic Payment Institutions are subject, the following are noteworthy: a) maintain minimum capital requirements, b) maintain sufficient reserves in high-quality liquid assets (e.g. cash, treasury bills, etc.), so as to be able to redeem, on par, the funds held on behalf of the clients, c) comply with anti-money laundering and countering of terrorism financing regulations, d) develop and maintain sound cybersecurity and information security policies, including but not limited to the performance of recurrent vulnerability tests and the deployment of strict infrastructure controls.
Amongst the regulatory obligations to which Electronic Payment Institutions are subject, the following are noteworthy: a) maintain minimum capital requirements, b) maintain sufficient reserves in high-quality liquid assets (e.g. cash, treasury bills, etc.), so as to be able to redeem, on par, the funds held on behalf of the clients, c) comply with anti-money laundering and countering of terrorism financing regulations, and d) develop and maintain sound cybersecurity and information security policies, including but not limited to the performance of recurrent vulnerability tests and the deployment of strict infrastructure controls.
These regulations could cover a wide variety of issues, including, without limitation, online commerce, Internet service providers’ responsibility for third party content hosted in their servers, user privacy, fintech transactions, freedom of expression, pricing, content and quality of products and services, taxation (including VAT or sales tax collection obligations, obligation to provide certain information about transactions that occurred through our platform, or about our users), advertising, intellectual property rights, consumer protection and information security.
These regulations could cover a wide variety of issues, including, without limitation, online commerce, Internet service providers’ responsibility for third party content hosted in their servers, user privacy, fintech transactions, freedom of expression, pricing, content and quality of products and services, taxation (including VAT or tax collection obligations, obligation to provide certain information about transactions that occurred through our platform, or about our users), advertising, intellectual property rights, consumer protection and information security.
Under the Fintech Law, institutions that provided the aforementioned services prior to its enactment are required to submit an application to the Comisión Nacional Bancaria y de Valores (the Mexican National Banking Commission or the “CNBV”) to obtain a license, and may continue to provide those services while such license application is being processed.
Under the Fintech Law, institutions that provided the aforementioned services prior to its enactment are required to submit an application to the Comisión Nacional Bancaria y de Valores (the Mexican National Banking and Securities Commission or the “CNBV”) to obtain a license, and may continue to provide those services while such license application is being processed.
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 that browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate.
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.
These licenses transformed Mercado Pago Emisora S.A. and Mercado Pago Operadora S.A. into regulated entities, supervised by the CMF and the Chilean Financial Analysis Unit ("UAF", in charge of supervising anti-money laundering activities in Chile), and became obligated, among other things, to: (i) deliver information on its financial and operational management on a regular basis; (ii) maintain certain minimum capital required; (iii) set up a determined liquidity reserve; (iv) deposit and maintain users’ funds in specific banks’ accounts (only applicable to Mercado Pago Emisora S.A.); and (v) perform know your client and anti-money laundering duties.
These licenses transformed Mercado Pago Emisora S.A. and Mercado Pago Operadora S.A. into regulated entities, supervised by the CMF and the Chilean Financial Analysis Unit (“UAF”, in charge of supervising anti-money laundering activities in Chile), and became obligated, among other things, to: (i) deliver information on its financial and operational management on a regular basis; (ii) maintain certain minimum capital required; (iii) set up a determined liquidity reserve; (iv) deposit and maintain users’ funds in specific banks’ accounts (only applicable to Mercado Pago Emisora S.A.); and (v) perform know your client and anti-money laundering duties.
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 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.
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, and fees from other ancillary businesses.
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.
In 2021, we launched the Mercado Pago credit card in Brazil, and this was followed by Mexico in 2023. 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.
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.
Value-added services that we intend to continue to scale include, but are not limited to: (a) maximizing utilization of Mercado Envios, particularly our fulfillment services, (b) expanding our advertising offerings, both on- and off-platform, (c) maximizing the use of Mercado Pago as a means of payment in our Marketplace, and (d) scaling our loyalty scheme, MELI+.
Value-added services that we intend to continue to scale include, but are not limited to: (a) maximizing utilization of Mercado Envios, particularly our fulfillment services, (b) expanding our advertising offerings, both on- and off-platform, (c) maximizing the use of Mercado Pago as a means of payment in our Marketplace, and (d) scaling our loyalty program, MELI+.
Our lending solution is available in Argentina, Brazil, Mexico and Chile. We offer credits 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.
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.
Government Regulation We are subject to a variety of laws, decrees and regulations that affect companies conducting business on the Internet in some of the countries where we operate related to e-commerce, fintech, privacy, data protection, taxation, obligations to provide information to certain authorities about transactions occurring on our platform or about our users, anti-money laundering regulations, transport regulations and other legislation which also applies to other companies conducting business in general.
T able of Contents Government Regulation We are subject to a variety of laws, decrees and regulations that affect companies conducting business on the Internet in some of the countries where we operate related to e-commerce, fintech, privacy, data protection, taxation, obligations to provide information to certain authorities about transactions occurring on our platform or about our users, anti-money laundering regulations, transport regulations and other legislation which also applies to other companies conducting business in general.
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.
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.
In addition, our developers frequently interact with technology suppliers and attend technology-related events to familiarize themselves with the latest innovations and developments in the field. We also rely on certain technologies that we license from third parties, suppliers of key database technology, operating systems and specific hardware components for our services.
In addition, our developers frequently interact with technology suppliers and attend technology-related events to familiarize themselves with the latest innovations and developments in the field. We also rely on certain technologies that we license from third parties, suppliers of key database technology, operating systems and specific hardware components for our services. 8 | MercadoLibre, Inc.
In addition, we face competition from a number of large online communities and services that have expertise in developing e-commerce, facilitating online interaction, or both. Other large companies with strong brand recognition and experience in e-commerce, such as large newspapers or media companies, also compete in the online listing market in Latin America.
In addition, we face competition from a number of large online communities and services that have expertise in developing e-commerce, facilitating online interaction, or both. Other large companies with strong brand recognition and experience in e-commerce, such as large newspapers or media companies, also compete in the online listing market in Latin America. 9 | MercadoLibre, Inc.
Information on or connected to our website is neither part of nor incorporated into this report on Form 10-K or any other SEC filings we make from time to time.
Information on or connected to our website is neither part of nor incorporated into this report on Form 10-K or any other SEC filings we make from time to time. 10 | MercadoLibre, Inc.
Table of Contents 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.
T able of Contents 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.
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” for more information. We are also subject to significant general data protection and privacy-related regulations in many of the jurisdictions in which we operate (e.g.
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"” for more information. We are also subject to significant general data protection and privacy-related regulations in many of the jurisdictions in which we operate (e.g.
Intellectual Property Rights Our intellectual property ("IP") rights are critical to our future success and rely on a combination of copyright, trademark, patent designs, trade secret laws and contractual restrictions, among others. We pursue the registration of our intangible assets in each country where we operate.
T able of Contents Intellectual Property Rights Our intellectual property ("IP") rights are critical to our future success and rely on a combination of copyright, trademark, patent designs, trade secret laws and contractual restrictions, among others. We pursue the registration of our intangible assets in each country where we operate.
Table of Contents On May 18, 2023 and May 30, 2023, the CBA enacted new regulations establishing that (i) QR codes must be interoperable with credit card payments, effective as from May 1, 2024; and (ii) digital wallets that allow credit card payments by reading QR codes must be interoperable, effective as from July 29, 2024.
T able of Contents On May 18, 2023 and May 30, 2023, the CBA enacted new regulations establishing that (i) QR codes must be interoperable with credit card payments, effective as from May 1, 2024; and (ii) digital wallets that allow credit card payments by reading QR codes must be interoperable, effective as from July 29, 2024.
Chile In 2017 and 2018, Chile enacted regulations regarding the issuance and operation of payment cards, which could affect Mercado Pago’s operations, including authorization to operate, anti-money laundering obligations, capital requirements and reserve funds, operational and security safeguards, among others. 15 | MercadoLibre, Inc.
Chile In 2017 and 2018, Chile enacted regulations regarding the issuance and operation of payment cards, which could affect Mercado Pago’s operations, including authorization to operate, anti-money laundering obligations, capital requirements and reserve funds, operational and security safeguards, among others.
Our purpose is to democratize commerce and financial services to transform the lives of millions across Latin America. Every action we take as a company is anchored in this purpose, with our culture guiding and inspiring each decision we make and every initiative we launch.
Our purpose is to democratize commerce and financial services to transform the lives of millions across Latin America. Every action we take as a company is anchored in this purpose, with our culture guiding and inspiring each decision we make and every initiative we launch. 11 | MercadoLibre, Inc.
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.
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.
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 U.K. and China.
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.
In 2024, in Brazil and Mexico we launched "Meli Dólar", a stablecoin that is pegged to the US dollar. 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 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.
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).
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).
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.
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.
Our distribution capabilities and in-depth understanding of our customers’ behavior and merchants’ sales on the Mercado Libre Marketplace combined with machine learning ("ML") and 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.
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.
Since then, we have seen significant adoption of our platform and entire companies built on and around our APIs and services, all of them focused on adding even more value to our users. 8 | MercadoLibre, Inc. Table of Contents During this overhaul, we built a proprietary Platform as a Service (“PAAS”) product used daily by our development team.
Since then, we have seen significant adoption of our platform and entire companies built on and around our APIs and services, all of them focused on adding even more value to our users. During this overhaul, we built a proprietary Platform as a Service (“PAAS”) product used daily by our development team.
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, (d) expanding our presence in vehicle, real estate and services classifieds and (e) offering enterprise software solutions to our online commerce business users. ■ Continue to improve the shopping experience for our users .
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 .
To achieve this, we work on two complementary pillars: inclusion, through processes and actions that ensure equal opportunities within a culture that fundamentally values the meritocracy; and representativeness, promoting the inclusion of different profiles and experiences, thus reflecting the diversity of our user community. 11 | MercadoLibre, Inc.
To achieve this, we work on two complementary pillars: inclusion, through processes and actions that ensure equal opportunities within a culture that fundamentally values meritocracy; and representation, promoting the inclusion of different profiles and experiences, thus reflecting the diversity of our user community.
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.
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.
Due to these areas of legal uncertainty, and the user ’ s adoption of the Internet and other online services, it is possible that new laws and regulations will be adopted with respect to the Internet or other online services.
Due to these areas of legal uncertainty, and the user’s adoption of the Internet and other online services, it is possible that new laws and regulations will be adopted with respect to the Internet or other online services.
Table of Contents 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.
T able of Contents 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.
During March 2022, the BACEN announced new rules for payment institutions based on their size and complexity and raised standards for required capital.
During March 2022, the BACEN announced new rules for PIs based on their size and complexity and raised standards for required capital.
Table of Contents In November 2021, the Chilean Commission for the Financial Market (“CMF”) granted Mercado Pago, through its entities Mercado Pago Emisora S.A. and Mercado Pago Operadora S.A. (formerly know as MercadoPago S.A.), a prepaid card issuer license and payment card operator license, respectively.
In November 2021, the Chilean Commission for the Financial Market (“CMF”) granted Mercado Pago, through its entities Mercado Pago Emisora S.A. and Mercado Pago Operadora S.A. (formerly known as MercadoPago S.A.), a prepaid card issuer license and payment card operator license, respectively.
The new framework, which was effective starting in July 2023 with full implementation by January 2025, will extend the application of the rule regarding proportionality of regulatory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by payment institutions.
The new framework, which was effective starting in July 2023 with full implementation by January 2025, extended the application of the rule regarding proportionality of regulatory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by PIs.
On April 8, 2024, the Chilean Congress published the Cybersecurity Law. Although Mercado Pago Chilean entities already comply with the law’s main obligations as a result of being regulated entities, pursuant to this new law, such entities will be subject to a new regulator and must comply with certain reporting requirements for cybersecurity incidents.
Although Mercado Pago Chilean entities already comply with the law’s main obligations as a result of being regulated entities, pursuant to this new law, such entities will be subject to a new regulator and must comply with certain reporting requirements for cybersecurity incidents.
On September 1, 2022, the CBA issued a regulation that extended the application of the rules for the protection of users of financial services to payment services providers who offer payment accounts (“PSPOCP” according to its Spanish acronym). The regulation was already applicable to non-financial loan providers. This regulation came into effect on March 1, 2023.
On September 1, 2022, the CBA issued a regulation that extended the application of the rules for the protection of users of financial services to payment services providers who offer payment accounts (“PSPOCP” according to its Spanish acronym). The regulation was already applicable to non-financial loan providers.
On July 3, 2024, MercadoPago Uruguay S.R.L. received authorization from the BCU to offer payment with transfers acquiring services. 16 | MercadoLibre, Inc. Table of Contents On April 17, 2024, MercadoPago Uruguay S.R.L. was approved as a participant in the automated clearing house managed by Urutec S.A.
On July 3, 2024, MercadoPago Uruguay S.R.L. received authorization from the BCU to offer payment with transfers acquiring services. On April 17, 2024, MercadoPago Uruguay S.R.L. was approved as a participant in the automated clearing house managed by Urutec S.A.
This includes, but is not limited to: (a) our digital account to manage their finances; (b) offering credit products to help merchants to scale their businesses, and (c) offering enterprise software solutions that help merchants to manage their businesses. 7 | MercadoLibre, Inc. Table of Contents ■ Continue to grow our business and maintain market leadership .
This includes, but is not limited to: (a) our digital account to manage their finances; (b) offering credit products to help merchants to scale their businesses, and (c) offering enterprise software solutions that help merchants to manage their businesses. ■ Continue to grow our business and maintain market leadership .
Our priority is to guarantee an inclusive and respectful environment. In 2024, we created the Inclusion Insights Team, an intersectional team whose mission is to ensure that our initiatives and processes are inclusive and incorporate a multiplicity of perspectives and experiences, enabling a great place to work for all people.
In 2024, we created the Inclusion Insights Team, an intersectional team whose mission is to ensure that our initiatives and processes are inclusive and incorporate a multiplicity of perspectives and experiences, creating a great place to work for all people.
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 will be discontinued as of December 31, 2025.
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.
We believe in local relevance to create a unique positioning in our top markets and promote a clear, differentiated brand voice. During 2024, we strengthened our buyer acquisition and demand generation efforts with multiple initiatives that helped us to increase GMV.
We believe in local relevance to create a unique positioning in our top markets and promote a clear, differentiated brand voice. During 2025, we strengthened our buyer acquisition and demand generation efforts with multiple initiatives that helped us to increase the usage of our ecosystem.
Law No. 13,709 (“LGPD”) in Brazil, Law No. 25,326 in Argentina, Federal Law on the Protection of Personal Data on Private Sector Possession in Mexico, Laws No. 1581/2012 and 1266/2008 in Colombia, Law No. 21.719 in Chile, Law No. 18,331 in Uruguay, Organic Law on Personal Data Protection in Ecuador, Law No. 29,733 in Peru, Personal Information Protection Law in China and some privacy and data protection state laws in the U.S.).
Law No. 13,709 in Brazil, Law No. 25,326 in Argentina, Federal Law on the Protection of Personal Data on Private Sector Possession in Mexico, Laws No. 1581/2012 and 1266/2008 in Colombia, Law No. 21.719 in Chile, Law No. 18,331 in Uruguay, Organic Law on Personal Data Protection in Ecuador, Law No. 29,733 in Peru, Personal Information Protection Law in China as well as various state-level privacy laws in the United States.
We will continue to focus on improving the functionality of our websites and apps to deliver a more efficient and safe shopping experience and providing our users with the help of a dedicated customer support department. We will continue to focus on increasing purchase frequency and transaction volumes from our existing users.
We will continue to focus on improving the functionality of our websites and apps to deliver a more efficient and safe shopping experience and providing our users with the help of a dedicated customer support department.
Argentina In January 2020, the Central Bank of Argentina (“CBA”) enacted regulations relating to payments service providers that apply to the Fintech institutions that are not financial institutions but nevertheless, provide payment services in at least one of the stages of the payment system.
As of the date of this filing, this authorization is pending approval. Argentina In January 2020, the Central Bank of Argentina (“CBA”) enacted regulations relating to payments service providers that apply to the Fintech institutions that are not financial institutions but nevertheless, provide payment services in at least one of the stages of the payment system.
At MercadoLibre, we achieve this by providing meaningful experiences and co-creating an environment that reflects our DNA. In a fast-paced, dynamic, joyful and collaborative workplace, we give our teams the chance to grow by tackling complex challenges, pursuing excellence and achieving outstanding results together.
To thrive in the diverse markets we serve, attracting, engaging and developing top talent is paramount. At MercadoLibre, we achieve this by providing meaningful experiences and co-creating an environment that reflects our DNA. In a fast-paced, dynamic, joyful and collaborative workplace, we give our teams the chance to grow by tackling complex challenges, pursuing excellence and achieving outstanding results together.
ITEM 1. BUSINESS MercadoLibre, Inc. (together with its subsidiaries “us”, “we”, “our” or the “Company”) is the leading online commerce and fintech ecosystem in Latin America.
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.
This successful overhaul allowed us to unlock greater developer productivity from all our teams. In the past, we opened up our platform to allow third parties to integrate the various features of our platform into custom applications.
Cells interact with each other using Application Programming Interfaces (“APIs”). This successful overhaul allowed us to unlock greater developer productivity from all our teams. In the past, we opened up our platform to allow third parties to integrate the various features of our platform into custom applications.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our Annual Integrated Impact report and the Sustainability Bond report are available on our investor relations website.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our country-specific Impact Reports for Brazil, Mexico and Argentina are available on our investor relations website.
Generation of quality employment opportunities Our recruitment and hiring strategy exemplifies our commitment to being a growth engine for Latin America in response to the socio-economic challenges faced by the region in recent years. We take immense pride in creating quality employment opportunities in the region. This year, we celebrated a remarkable achievement by surpassing 84,000 employees at MercadoLibre.
T able of Contents Generation of quality employment opportunities Our recruitment and hiring strategy exemplifies our commitment to being a growth engine for Latin America in response to the socio-economic challenges faced by the region in recent years. We take immense pride in creating quality employment opportunities in the region.
In the past, we started a deep technology overhaul to switch from a closed and monolithic system to an open and decoupled one. We split our teams into many decoupled and autonomous “cells”. A cell is a functional unit with its own team, hardware, data and source code. Cells interact with each other using Application Programming Interfaces ("APIs").
T able of Contents In the past, we started a deep technology overhaul to switch from a closed and monolithic system to an open and decoupled one. We split our teams into many decoupled and autonomous “cells.” A cell is a functional unit with its own team, hardware, data and source code.
Mercado Pago Servicios de Procesamiento S.R.L. was registered as an Acquirer in the "Registry of Payment Service Providers" of the CBA on February 23, 2024.
Mercado Pago Servicios de Procesamiento S.R.L. was registered as an Acquirer in the "Registry of Payment Service Providers" of the CBA on February 23, 2024. On June 4, 2024, Mercado Pago Inversiones S.R.L. ("MPY") and Mercado Pago Asset Management S.A. ("MPA") were established.
Therefore, we are committed to honoring the value proposition we offer our employees every single day. Multiple perspectives, common purpose We believe in effort and the value of meritocracy, and we know that the inclusion of diverse experiences drives innovation and allows us to anticipate the needs and expectations of those who choose Mercado Libre.
Multiple perspectives, common purpose We believe in effort and the value of meritocracy, and we know that the inclusion of diverse experiences drives innovation and allows us to anticipate the needs and expectations of those who choose MercadoLibre.
We believe this strategy will help us maximize the utilization of Mercado Pago on our Marketplace and the value of Mercado Pago as a day-to-day financial services partner. ■ Overlay value-added services onto our payments processing products . We intend to enhance the value proposition of Mercado Pago's payments processing solutions by adding value-added services for merchants.
We believe this strategy will help us maximize the utilization of Mercado Pago on our Marketplace and the value of Mercado Pago as a day-to-day financial services partner. 7 | MercadoLibre, Inc. T able of Contents ■ Overlay value-added services onto our payments processing products .
This characteristic, which dates back to our early days in a garage in Buenos Aires, continues to thrive among the more than 84,000 talented individuals who comprise our exceptional team across Latin America.
Culture and Development Our entrepreneurial culture is the most significant attribute that makes MercadoLibre a unique place to work. This characteristic, which dates back to our early days in a garage in Buenos Aires, continues to thrive among the more than 123,000 talented individuals who comprise our exceptional team across Latin America.
One of our Leadership principles is to “Lead by Example.” We expect our leaders to be the first to give their all, to inspire enthusiasm, and, above all, to embody our culture and DNA through their actions. In the past year, we have trained over 2,700 leaders to serve as multipliers of our DNA.
Our leadership team plays a central role in exemplifying our culture. One of our Leadership principles is to “Lead by Example.” We expect our leaders to be the first to give their all, to inspire enthusiasm, and, above all, to embody our culture and DNA through their actions.
Risk factors—Intellectual Property Risks—We may not be able to adequately protect and enforce our intellectual property rights. We could potentially face claims alleging that our technologies infringe the property rights of others". 9 | MercadoLibre, Inc. Table of Contents Offices We are a Delaware corporation incorporated on October 15, 1999.
Risk factors—Intellectual Property Risks—We may not be able to adequately protect and enforce our intellectual property rights. We could potentially face claims alleging that our technologies infringe the property rights of others.” Offices We are a Delaware corporation incorporated on October 15, 1999. Our registered office is located at 800 North State Street, Suite 304, Kent County, Dover, Delaware, 19901.
We focus on growing our business, achieving scale-related competitive advantages and strengthening our position as a preferred commerce and fintech platform in each of the markets in which we operate.
We focus on growing our business, achieving scale-related competitive advantages and strengthening our position as a preferred commerce and fintech platform in each of the markets in which we operate. We also intend to grow our business and maintain our leadership by expanding our user base as we reduce the frictions of buying online in Latin America.
Our strategic focus is to bring more users to Mercado Pago by leveraging our ecosystem, promoting financial inclusion and developing deep relationships with these users.
We intend to continue scaling Mercado Pago’s day-to-day financial services offerings for individuals and merchants through our digital account. Our strategic focus is to bring more users to Mercado Pago by leveraging our ecosystem, promoting financial inclusion and developing deep relationships with these users.
Additionally, in February 2022, the National Insurance and Bond Commission granted Mercado Insurtech, Agente de Seguros, S.A. de C.V. definitive authorization to operate as an Insurance Agent.
Additionally, in February 2022, the National Insurance and Bond Commission granted Mercado Insurtech, Agente de Seguros, S.A. de C.V. definitive authorization to operate as an Insurance Agent. On September 11, 2024, MercadoLibre, S.A., de C.V., Institución de Fondos de Pago Electrónico submitted to the CNBV an authorization request to organize and operate as a multiple banking institution.
In July 2023, MercadoPago Uruguay S.R.L. obtained the approval by the BCU to operate as an Electronic Money Issuing Institution (“IEDE”).
In 2016, Mercado Pago was launched in Uruguay and registered in Central Bank of Uruguay ("BCU") to provide services of payments and collections ("PSPC"). In July 2023, MercadoPago Uruguay S.R.L. obtained the approval by the BCU to operate as an Electronic Money Issuing Institution (“IEDE”).
We have licensed certain proprietary rights, such as trademarks or copyrights, to third parties in the past and expect to continue to license such rights in the future.
To prevent disclosure of our proprietary information to unauthorized parties, we have also entered into non-disclosure agreements with our employees, strategic partners and suppliers. We have licensed certain proprietary rights, such as trademarks or copyrights, to third parties in the past and expect to continue to license such rights in the future.
Human Capital Employees and Labor Relations The following table shows the number of our employees by country as of December 31, 2024: Country Number of Employees Brazil 36,548 Mexico 25,699 Argentina 12,043 Colombia 5,286 Chile 2,639 Uruguay 1,863 Peru 54 Venezuela 25 United States 20 Spain 19 Ecuador 6 China 5 Total 84,207 We manage operations in the remaining countries in which we have operations remotely.
T able of Contents Human Capital Employees and Labor Relations The following table shows the number of our employees by country as of December 31, 2025: Country Number of Employees Brazil 61,139 Mexico 34,336 Argentina 16,726 Colombia 5,848 Chile 3,617 Uruguay 1,858 Peru 65 United States 27 Venezuela 25 Spain 16 Ecuador 7 China 6 Total 123,670 We manage operations in the remaining countries in which we have operations remotely.
Any violation of our MELI Code must be reported, and we maintain a confidential reporting line available 24/7 for anonymous reporting. AI-Driven Innovation at MercadoLibre At MercadoLibre, we continuously seek to innovate in all our processes.
Any violation of our MELI Code must be reported, and we maintain a confidential reporting line available 24/7 for anonymous reporting. AI-Driven Innovation at MercadoLibre MercadoLibre is experiencing a new phase in its evolution where the transformative power of technology, specifically AI, challenges the Company to evolve its ways of working.
The DNA of MercadoLibre, embedded in our culture, is best exemplified by a proactive attitude: a relentless commitment to creating value for our users through risk-taking and innovation, all while delivering excellence as a collective. 2024 marked our 25th anniversary, and we celebrate how far we have come, achieving extraordinary and sustainable results.
The DNA of MercadoLibre, embedded in our culture, is best exemplified by a proactive attitude: a relentless commitment to creating value for our users through risk-taking and innovation, all while delivering excellence as a collective. Throughout the years, our culture has been instrumental in shaping our Company’s dynamic and successful journey, serving as a competitive advantage and a crucial differentiator.
In addition, our “Leading Operations” program trained more than 3,775 leaders to strengthen management within our logistics operations. This initiative has boosted productivity and supported our goal of expanding our logistics network to every home in Latin America. To thrive in the diverse markets we serve, attracting, engaging and developing top talent is paramount.
This milestone is particularly significant as we recognize that managing team engagement is an indispensable responsibility of our leaders. In addition, during 2025 our “Leading Operations” program trained more than 2,600 leaders to strengthen management within our logistics operations. This initiative has boosted productivity and supported our goal of expanding our logistics network to every home in Latin America.
We believe that a significant portion of our growth will be derived from the development of these tools and technologies in the future. ■ Become the principal financial services partner to our users. We intend to continue scaling Mercado Pago's day-to-day financial services offerings for individuals and merchants through our digital account.
We will continue to focus on increasing purchase frequency and transaction volumes from our existing users, as well as attracting new buyers to our platform. We believe that a significant portion of our growth will be derived from the development of these tools and technologies in the future. ■ Become the principal financial services partner to our users.
We use our investor relations website as a means of disclosing material, non-public information and for complying with our disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls and webcasts.
Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls and webcasts.
We have been registered as a “Proveedor No Financiero de Crédito” (non-financial loan provider) with the CBA since December 18, 2020.
On July 7, 2020, MercadoLibre S.R.L. was registered with the CBA as a payment service provider in accordance with applicable regulations, and since December 18, 2020 has also been registered as a “Proveedor No Financiero de Crédito” (non-financial loan provider).
In 2024 we continued to scale Mercado Play, an AVOD streaming service first launched in 2023 and available to all users in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay.
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.
After its registration in the General Inspection of Justice on August 5, 2024, on September 2, 2024, this subsidiary requested a Product Administration Agent of Collective Investment - Common Investment Funds license and requested the creation of a Money Market Mutual Fund ("Mercado Fondo Ahorro") from the Argentinian National Securities Commission. Both authorizations were granted on February 5, 2025.
After its registration in the General Inspection of Justice, these subsidiaries requested a Comprehensive Settlement and Clearing Agent license and a Product Administration Agent of Collective Investment - Common Investment Funds license, respectively, from the Argentinian National Securities Commission (“CNV” according to its Spanish acronym), which were authorized on February 5, 2025.
We consider our relations with our employees to be good and we implement a variety of human resources practices, programs and policies that are designed to hire, develop, compensate and retain our employees. Culture and Development Our entrepreneurial culture is the most significant attribute that makes Mercado Libre a unique place to work.
Some of our employees located in Brazil, Argentina, Mexico, Uruguay and Chile are represented by different labor unions. We consider our relations with our employees to be good and we implement a variety of human resources practices, programs and policies that are designed to hire, develop, compensate and retain our employees.
The increase in direct employment drives our business forward and positively impacts indirect employment, generating numerous opportunities throughout our value chain and benefiting the hundreds of thousands of MSMEs that rely on our ecosystem. At MercadoLibre, we aspire to be the employer of choice, fully aware of the competitive landscape we navigate where effective talent management is crucial.
Our ongoing expansion not only strengthens our position in job creation but also enhances our value proposition. The increase in direct employment drives our business forward and positively impacts indirect employment, generating numerous opportunities throughout our value chain and benefiting the hundreds of thousands of MSMEs that rely on our ecosystem.
Product Development and Technology On December 31, 2024, we had 18,282 employees on our information technology and product development staff, an increase of 17% from 15,638 employees on December 31, 2023, due to new hires and as a consequence of improvements in our ecosystem products, which increased our information technology and product development staff.
We focused not only on peak season (Hot Sale, Black Friday) and gifting events (such as Christmas, Mother's Day), but also on creating new shopping occasions during low season by promoting new seasonal dates called “double dates.” Product Development and Technology On December 31, 2025, we had 20,347 employees on our information technology and product development staff, an increase of 11% from 18,282 employees on December 31, 2024, due to new hires and as a consequence of improvements in our ecosystem products, which increased our information technology and product development staff.
We expect that the Mercado Pago Chilean entities will be required to comply with these new reporting requirements sometime during 2025 or 2026. On May 30, 2024, the Chilean Congress passed Law 21,673, amending Law 20,009, which, effective as of June 1, 2024, establishes a limited liability regime for users of prepaid cards in case of loss, theft, or fraud.
Mercado Pago’s Chilean entities are preparing to meet all applicable obligations once secondary regulation is enacted. On May 30, 2024, the Chilean Congress passed Law 21,673, which establishes a limited liability regime for users of prepaid cards in case of loss, theft, or fraud.
Compañía de Financiamiento obtained a license issued by Colombian Financial Superintendence to operate as a financial institution in Colombia, enabling it to offer credits, digital accounts, investments and prepaid cards. As a financial company it is subject to minimum capital, reporting, consumer protection and risk management requirements. On April 22, 2024, MercadoPago S.A.
Additionally, payment processors like Mercado Pago must adhere to high standards regarding security, privacy, and anti-money laundering compliance. In June 2023, MercadoPago S.A. Compañía de Financiamiento obtained a license issued by Colombian Financial Superintendence to operate as a financial institution in Colombia, enabling it to offer credits, digital accounts, investments and prepaid cards.
Table of Contents Today, 93% of our employees perceive their leaders as inclusive, and this perception is held by employees across diverse groups. We also ensure pay equity by examining all groups, and there is no representative gap in any talent management processes, such as performance evaluations, promotions, and internal rotations.
We ensure pay equity by conducting annual company-wide analyses, and there is no representative gap in any talent management processes, such as performance evaluations, promotions, internal rotations and employee engagement. Our priority is to guarantee an inclusive and respectful environment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThis involvement, as well as political and economic conditions, could adversely affect our business; ■ Local currencies used in the conduct of our business are subject to depreciation, volatility and exchange controls; ■ Our transactions in Latin America may be impacted by the weaknesses of secure payment methods; ■ Provisions of our certificate of incorporation and Delaware law could inhibit others from acquiring us, prevent a change of control, and may prevent efforts by our stockholders to change our management; ■ We may require additional capital in the future, and this additional capital may not be available on acceptable terms or at all; ■ Shares eligible for future sale may cause the market price of our common stock to drop significantly, even if our business is doing well; and ■ We cannot guarantee that any share repurchase program will be fully consummated or will enhance stockholder value, and share repurchases could increase the volatility of our stock prices and diminish our cash reserves.
Biggest changeThis involvement, as well as political and economic conditions, could adversely affect our business; ■ Local currencies used in the conduct of our business are subject to depreciation, volatility and exchange controls; ■ Our transactions in Latin America may be impacted by the weaknesses of secure payment methods; and ■ Provisions of our certificate of incorporation and Delaware law could inhibit others from acquiring us, prevent a change of control, and may prevent efforts by our stockholders to change our management.
Our competitors may respond to new or emerging technologies and capabilities, including practical applications of AI and ML, as well as changes in customer requirements, faster and more effectively than we may, and they may also devote greater resources to the development, promotion, and sale of products and services.
Our competitors may respond to new or emerging technologies and capabilities, including practical applications of AI/ML, as well as changes in customer requirements, faster and more effectively than we may, and they may also devote greater resources to the development, promotion, and sale of products and services.
Similarly, some of our competitors have been accused, in other jurisdictions, of anticompetitive business practices, which they can replicate in Latin American countries where antitrust authorities have not yet focused on such commercial practices and where we actively compete. The global financial services and payments industry is continuously changing and increasingly subject to regulatory supervision and continued examination.
Similarly, some of our competitors have been accused of anticompetitive business practices in other jurisdictions, which they can replicate in Latin American countries where antitrust authorities have not yet focused on such commercial practices and where we actively compete. The global financial services and payments industry is continuously changing and increasingly subject to regulatory supervision and continued examination.
This upgrade process is expensive, the increasing complexity and enhancement of our website results in higher costs, and ultimately may not be successful. Our revenues depend on prompt and accurate billing processes.
This upgrade process is expensive and the increasing complexity and enhancement of our website results in higher costs, and ultimately may not be successful. Our revenues depend on prompt and accurate billing processes.
Internet Services Regulation There is uncertainty in many of the countries where we operate with respect to the liability of Internet service providers, the application of existing regulations to our business as they relate to, or the enactment of new regulations or legislation relating to, issues such as e-commerce, electronic or mobile payments, information requirements for Internet providers, data collection, data protection, data security, data localization, online privacy, cryptocurrencies, AI and ML (e.g. in relation to risk analysis) governing anti-money laundering, taxation, reporting obligations, consumer protection and businesses.
Internet Services Regulation There is uncertainty in many of the countries where we operate with respect to the liability of Internet service providers, the application of existing regulations to our business as they relate to, or the enactment of new regulations or legislation relating to, issues such as e-commerce, electronic or mobile payments, information requirements for Internet providers, data collection, data protection, data security, data localization, online privacy, cryptocurrencies, AI/ML (e.g. in relation to risk analysis) governing anti-money laundering, taxation, reporting obligations, consumer protection and businesses.
Our policies prohibit the sale, storage and/or transport of certain items (both on our platform and/or in our fulfillment centers and/or through third party carriers providing services to Mercado Libre) and we have implemented various actions to monitor and remove unlawful goods and services from our marketplace, which we continually work to improve.
Our policies prohibit the sale, storage and/or transport of certain items (both on our platform and/or in our fulfillment centers and/or through third party carriers providing services to users of Mercado Libre) and we have implemented various actions to monitor and remove unlawful goods and services from our marketplace, which we continually work to improve.
Additionally, other companies may develop AI products and technologies that are similar or superior to our technologies or more cost-effective to deploy. Other companies may also have (or in the future may obtain) patents, copyrights or other proprietary rights that could prevent, limit, or interfere with our ability to make, use, or sell our own AI products and services.
Additionally, other companies may develop AI products and technologies that are similar or superior to our technologies or more cost-effective to deploy. Other companies may also have (or in the future may obtain) patents, copyrights or other proprietary rights that could prevent, limit, or interfere with our ability to make, use, or sell our own AI/ML products and services.
Established banks and other financial institutions currently offer online payments, and those that do not yet provide such a service could quickly and easily develop it. In many cases, companies that directly or indirectly compete with us provide Internet access.
Established banks and other financial institutions currently offer online payments, and those that do not yet provide such a service could quickly and easily develop it. In many cases, companies that directly or indirectly compete with us provide Internet access and other services.
Our ability to deploy and leverage certain AI technologies critical for our products and services and for our business strategy, and to enhance productivity across the organization, may depend on the availability and pricing of third-party equipment and technical infrastructure.
Our ability to deploy and leverage certain AI/ML technologies critical for our products and services and for our business strategy, and to enhance productivity across the organization, may depend on the availability and pricing of third-party equipment and technical infrastructure.
Table of Contents Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks We publish an annual integrated impact report, that describes, among others, our policies, practices and initiatives across a variety of environmental, social and governance (“ESG”) matters, including our contribution to socio-economic development, inclusion and financial education, human capital management and efforts to reduce our environmental impact.
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks We publish an annual integrated impact report, that describes, among others, our policies, practices and initiatives across a variety of environmental, social and governance (“ESG”) matters, including our contribution to socio-economic development, inclusion and financial education, human capital management and efforts to reduce our environmental impact.
AI technology and services are highly competitive, rapidly evolving, and require significant investment, including development and operational costs, to meet the changing needs and expectations of our existing users and attract new users.
AI/ML technology and services are highly competitive, rapidly evolving, and require significant investment, including development and operational costs, to meet the changing needs and expectations of our existing users and attract new users.
We may also need to enter into relationships with various strategic partners, websites, other online service providers, shipping companies and other third parties necessary to our business. The increased complexity of managing multiple commercial relationships could lead to execution problems that can affect current and future revenues and operating margins, as well as our reputation.
We may also need to enter into relationships with various strategic partners, websites, cloud providers, other online service providers, shipping and logistics companies and other third parties necessary to our business. The increased complexity of managing multiple commercial relationships could lead to execution problems that can affect current and future revenues and operating margins, as well as our reputation.
Similar to other businesses with significant exposure to credit losses, we face the risk that our lending users may default on their payment obligations, making the receivables uncollectible and creating the risk of potential charge-offs, which could negatively impact our liquidity. Any of these events could adversely affect our business and results of operation.
Similar to other businesses with significant exposure to credit losses, we face the risk that our lending users may default on their payment obligations, making the receivables uncollectible and creating the risk of potential write-offs, which could negatively impact our liquidity. Any of these events could adversely affect our business and results of operation.
Any changes to, enforcement of, failure, or perceived failure to comply with these regulations, or the enactment of new regulations and legislation, could result in lawsuits, civil or criminal penalties, or fines against the Company or its subsidiaries, forfeiture of significant assets, an outright or partial restriction on our operations, additional compliance and licensure requirements, an adverse impact on our business, results of operations or financial position, or may otherwise force us to change the way we or our users do business, which could adversely affect the operations and reputation of our businesses in those jurisdictions.
T able of Contents Any changes to, enforcement of, failure, or perceived failure to comply with these regulations, or the enactment of new regulations and legislation, could result in lawsuits, civil or criminal penalties, or fines against the Company or its subsidiaries, forfeiture of significant assets, an outright or partial restriction on our operations, additional compliance and licensure requirements, an adverse impact on our business, results of operations or financial position, or may otherwise force us to change the way we or our users do business, which could adversely affect the operations and reputation of our businesses in those jurisdictions.
There is no assurance that the security measures we have put in place will be effective in every case, and our response process to incidents may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to prevent or limit harm or may fail to sufficiently remediate an incident.
There is no assurance that the security measures we have put in place will be effective in every case, and our response process to incidents may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to prevent, detect and report or limit harm or may fail to sufficiently remediate an incident.
Table of Contents We are subject to security breaches, disruption and confidential data theft from our systems, which can adversely affect our reputation and business A significant risk to our business lies both in the secure transmission of confidential information over public networks and in the continuity of our operations, given our heavy reliance on technology.
We are subject to security breaches, disruption and confidential data theft from our systems, which can adversely affect our reputation and business A significant risk to our business lies both in the secure transmission of confidential information over public networks and in the continuity of our operations, given our heavy reliance on technology.
Our SPs rely on computer software, hardware and telecommunications infrastructure and networking to provide services to our customers related to the token and crypto-assets exchange and custody services. These computer-based services are subject to disruption, delay and/or failure, which could cause our users to lose access to our Mercado Pago platform or to the SPs’ services.
Our SPs rely on computer software, hardware and telecommunications infrastructure and networking to provide services to our customers related to the token and digital-assets exchange and custody services. These computer-based services are subject to disruption, delay and/or failure, which could cause our users to lose access to our Mercado Pago platform or to the SPs’ services.
Even if we are not required to change our Mercado Envios business practices, we could be required to obtain licenses or regulatory approvals, which could be a very expensive and time consuming process, and we cannot assure that we would be able to obtain them in a timely manner or at all.
Even if we are not required to change our Mercado Envios business practices, we or our service providers could be required to obtain licenses or regulatory approvals, which could be a very expensive and time consuming process, and we cannot assure that we would be able to obtain them in a timely manner or at all.
Table of Contents It may be difficult to enforce judgments rendered against us in U.S. courts Although we are a Delaware corporation, our subsidiaries and most of our assets are located outside of the U.S. Furthermore, most of our directors, officers, and some advisors and experts named in this report reside outside the U.S.
It may be difficult to enforce judgments rendered against us in U.S. courts Although we are a Delaware corporation, our subsidiaries and most of our assets are located outside of the U.S. Furthermore, most of our directors, officers, and some advisors and experts named in this report reside outside the U.S.
We have experienced and will likely continue to experience defects or disruptions in our technology infrastructure, including system interruptions and delays that make our site and services unavailable or slow to respond for periods of time, which could adversely impact our ability to process transactions on our sites, apps or fulfill shipments, which could reduce our revenue, violate applicable regulations, adversely affect our reputation with or result in the loss of users and negatively impact our financial results. 32 | MercadoLibre, Inc.
We have experienced and will likely continue to experience defects or disruptions in our technology infrastructure, including system interruptions and delays that make our site and services unavailable or slow to respond for periods of time, which could adversely impact our ability to process transactions on our sites, apps or fulfill shipments, which could reduce our revenue, violate applicable regulations, adversely affect our reputation with or result in the loss of users and negatively impact our financial results.
Intellectual Property Risks We could face legal and financial liability upon the sale of items that infringe intellectual property rights of third parties and for information and material disseminated through our platforms We have received in the past, and anticipate that we will receive in the future, complaints alleging that certain items listed or sold through the Mercado Libre Marketplace or Mercado Shops or using Mercado Pago, or delivered by Mercado Envios infringe third-party copyrights, trademarks and/or other IP rights.
T able of Contents Intellectual Property Risks We could face legal and financial liability upon the sale of items that infringe intellectual property rights of third parties and for information and material disseminated through our platforms We have received in the past, and anticipate that we will receive in the future, complaints alleging that certain items listed or sold through the Mercado Libre Marketplace or Mercado Shops or using Mercado Pago, or delivered by Mercado Envios infringe third-party copyrights, trademarks and/or other IP rights.
Failures and breaches in security could result in a negative impact for us and for our customers, adversely affecting our and our customers’ businesses, assets, revenues, brands and reputations, disrupting our operations and resulting in penalties, fines, litigation, regulatory proceedings, regulatory investigations, remediation efforts, indemnification expenditures, reputational harm, negative publicity, lost revenues and/or other potential liabilities, in each case depending on the nature of the information disclosed.
Failures and breaches in security could result in a negative impact for us and for our customers, adversely affecting our and our customers’ businesses, assets, revenues, brands and reputations, disrupting our operations and resulting in penalties, fines, litigation, regulatory proceedings, regulatory investigations, remediation efforts, indemnification expenditures, increased insurance premiums, reputational harm, negative publicity, lost revenues and/or other potential liabilities, in each case depending on the nature of the information disclosed.
These construction efforts are subject to a risk of delay as well as risks relating to the quality of the construction, which could increase our costs and negatively impact our ability to grow capacity in time to adequately meet demand.
These construction efforts are subject to a risk of delay as well as risks relating to the quality of the construction and regulatory requirements, which could increase our costs and negatively impact our ability to grow capacity in time to adequately meet demand.
Table of Contents Risks related to doing business in Latin America We face the risk of political and economic crises, instability, terrorism, civil strife, labor conflicts, expropriation, corruption and other risks of doing business in emerging markets We conduct our operations in emerging market countries in Latin America, which have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and economic instability.
T able of Contents Risks related to doing business in Latin America We face the risk of political and economic crises, instability, terrorism, civil strife, labor conflicts, expropriation, corruption and other risks of doing business in emerging markets We conduct our operations in emerging market countries in Latin America, which have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and economic instability.
We rely on banks and investment funds that acquire Mercado Pago’s receivables and payment processors to fund transactions, and changes to card association fees, rules or practices may adversely affect our business Mercado Pago relies on banks, investment funds or payment processors to process the funding of Mercado Pago transactions and Mercado Libre Marketplace collections, and we must pay a fee for this service.
T able of Contents We rely on banks and investment funds that acquire Mercado Pago’s receivables and payment processors to fund transactions, and changes to card association fees, rules or practices may adversely affect our business Mercado Pago relies on banks, investment funds or payment processors to process the funding of Mercado Pago transactions and Mercado Libre Marketplace collections, and we must pay a fee for this service.
In addition, the decentralized and pseudonymous nature of digital assets raises novel compliance risks and challenges; the SPs’ failure to maintain necessary controls or safeguard against improper transactions—for example, with sanctioned parties— due to process or control oversight could lead to regulatory penalties and reputational harm for the Company. 27 | MercadoLibre, Inc.
In addition, the decentralized and pseudonymous nature of digital assets raises novel compliance risks and challenges; the SPs’ failure to maintain necessary controls or safeguard against improper transactions—for example, with sanctioned parties— due to process or control oversight could lead to regulatory penalties and reputational harm for the Company.
Such mandatory disclosures could lead to negative publicity, damage our reputation, devalue our brands and may cause our current and prospective customers to lose confidence in the effectiveness of our data security measures.
Such mandatory disclosures could lead to negative publicity, damage our reputation, devalue our brands and may cause our current and prospective customers to lose confidence in the effectiveness of our privacy program and data security measures.
While we have taken reasonable measures to secure any digital assets, if such threats are realized or the measures or controls we implement to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be adversely affected. 26 | MercadoLibre, Inc.
While we have taken reasonable measures to secure any digital assets, if such threats are realized or the measures or controls we implement to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be adversely affected.
Anti-Money Laundering We are subject to anti-money laundering laws and regulations that prohibit, among other things, involvement in receiving and/or transferring the proceeds of criminal activities and impose obligations to identify the users and request certain information and documentation that, in certain circumstances, must be shared with regulators or government institutions.
T able of Contents Anti-Money Laundering We are subject to anti-money laundering laws and regulations that prohibit, among other things, involvement in receiving and/or transferring the proceeds of criminal activities and impose obligations to identify the users and request certain information and documentation that, in certain circumstances, must be shared with regulators or government institutions.
Table of Contents We operate in a highly competitive and evolving environment The e-commerce and omnichannel retail, e-commerce services, fintech and digital content and electronic devices industries are still relatively new in Latin America, rapidly evolving, highly innovative and intensely competitive, and we expect competition to become more intense in the future.
T able of Contents We operate in a highly competitive and evolving environment The e-commerce and omnichannel retail, e-commerce services, fintech and digital content and electronic devices industries are still relatively new in Latin America, rapidly evolving, highly innovative and intensely competitive, and we expect competition to become more intense in the future.
Any disruption or failure in our AI systems or infrastructure, or those of our third-party providers, could result in system failures, delays or errors in our operations, which could harm our business and financial results.
Any disruption or failure in our IT systems or infrastructure, or those of our third-party providers, could result in system failures, delays or errors in our operations, which could harm our business and financial results.
Table of Contents We depend on key personnel, the loss of which could have a material adverse effect on us Our performance depends substantially on the continued services and on the performance of our senior management and other key personnel.
We depend on key personnel, the loss of which could have a material adverse effect on us Our performance depends substantially on the continued services and on the performance of our senior management and other key personnel.
In addition, our sustainability initiatives may be unsuccessful for a variety of reasons, including if we are unable to realize the expected benefits of new technologies or if we do not successfully plan or execute new strategies, which in turn could harm our business or damage our reputation.
In addition, our sustainability initiatives may be unsuccessful for a variety of reasons, including if we are unable to realize the expected benefits of new technologies or if we do not successfully plan or execute new strategies, which in turn could harm our business or damage our reputation. 26 | MercadoLibre, Inc.
Further, because our services and products are available in a number of countries, certain foreign jurisdictions may claim that we are required to comply with their laws. The expansion of our business may also result in increased regulatory oversight and enforcement, as well as licensing requirements.
Further, because our services and products are available in a number of countries, certain foreign jurisdictions may claim that we are required to comply with their laws. The expansion of our business may also result in increased regulatory oversight and enforcement, as well as licensing requirements. 27 | MercadoLibre, Inc.
The failure of the financial institutions with which we conduct business may have a material adverse effect on our business, operating results, and financial condition If the condition of the financial services industry deteriorates or becomes weakened for an extended period of time, any of the following factors could have a material adverse effect on our business, operating results, and financial condition: ■ Disruptions to the capital markets or the banking system may materially adversely affect the value of investments or bank deposits we currently consider safe, liquid or that provide a reasonable return, and we may be unable to find suitable alternative investments, which could result in lower interest income or longer investment horizons; ■ We may be required to increase the installment and financing fees we charge to customers for purchases made in installments or cease offering installment purchases altogether, each of which may result in a lower volume of transactions completed; 23 | MercadoLibre, Inc.
The failure of the financial institutions with which we conduct business may have a material adverse effect on our business, operating results, and financial condition If the condition of the financial services industry deteriorates or becomes weakened for an extended period of time, any of the following factors could have a material adverse effect on our business, operating results, and financial condition: ■ Disruptions to the capital markets or the banking system may materially adversely affect the value of investments or bank deposits we currently consider safe, liquid or that provide a reasonable return, and we may be unable to find suitable alternative investments, which could result in lower interest income or longer investment horizons; ■ We may be required to increase the installment and financing fees we charge to customers for purchases made in installments or cease offering installment purchases altogether, each of which may result in a lower volume of transactions completed; ■ We may be unable to access financing in the credit and capital markets at reasonable rates.
Table of Contents Failure to successfully operate our fulfillment network may also negatively affect our business Through our logistics solution, Mercado Envios, we offer sellers on our platform fulfillment and warehousing services, including maintaining inventories of third parties that sell products through our platform. We also use fulfillment and warehousing services for our first-party business.
Failure to successfully operate our fulfillment network may also negatively affect our business Through our logistics solution, Mercado Envios, we offer sellers on our platform fulfillment and temporary warehousing services, including maintaining inventories of third parties that sell products through our platform. We also use fulfillment and temporary warehousing services for our first-party business.
In the event that those private keys are lost, destroyed, unable to be accessed or in any way compromised and no back up of such private keys exists, the SPs will not be able to access the tokens or crypto-assets held on behalf of our customers in their custody.
In the event that those private keys are lost, destroyed, unable to be accessed or in any way compromised and no back up of such private keys exists, the SPs will not be able to access the digital-assets held on behalf of our customers in their custody.
These defense costs and indemnity payments could materially and adversely affect our results of operations, financial condition, business and prospects. Such customers and partners may also discontinue the use of our products and services as a result of injunctions or otherwise, which could result in loss of revenue and adversely affect our business.
These defense costs and indemnity payments could materially and adversely affect our results of operations, financial condition, business and prospects. Such customers and partners may also discontinue the use of our products and services as a result of injunctions or otherwise, which could result in loss of revenue and adversely affect our business. 31 | MercadoLibre, Inc.
Mercado Libre’s Marketplace currently competes with a number of companies operating throughout Latin America, including: traditional brick and mortar retailers, e-commerce and omnichannel retailers and vendors and distributors offering physical, digital and interactive media products that we offer and sell on our platform; online sales, auction services and comparison shopping websites; social media platforms and online and app-based means of search engines for the purchase of goods and services; companies that provide e-commerce related services such as inventory, storage and supply chain management, fulfillment, advertising and payment processing; other small online service providers, including those that serve specialty markets; business-to-consumer online commerce services.
Mercado Libre’s Marketplace currently competes with a number of companies operating throughout Latin America, including: traditional brick and mortar retailers, e-commerce and omnichannel retailers and vendors and distributors offering physical, digital and interactive media products; online sales, auction services and comparison shopping websites; social media platforms and online and app-based means of search engines for the purchase of goods and services; companies that provide e-commerce related services such as inventory, storage and supply chain management, fulfillment, advertising and payment processing; other small online service providers, including those that serve specialty markets; and business-to-consumer online commerce services.
Moreover, any such acceleration and required repayment of, or default in respect of, any of our indebtedness could, in turn, constitute an event of default under other debt instruments, thereby resulting in the acceleration and required repayment of other indebtedness we may have. Any of these events could materially adversely affect our liquidity and financial condition.
Moreover, any such acceleration and required repayment of, or default in respect of, any of our indebtedness could, in turn, constitute an event of default under other debt instruments, thereby resulting in the acceleration and required repayment of other indebtedness we may have. Any of these events could materially adversely affect our liquidity and financial condition. 25 | MercadoLibre, Inc.
Our debt instruments contain restrictions that limit our flexibility in operating our business, and changes by any rating agency to our outlook or credit rating could negatively affect us The terms of our senior unsecured notes issued in January 2021 and certain collateralized debt under securitization transactions contain, and any debt instruments we enter in the future may contain, covenants that restrict or could restrict, among other things, our business and operations.
Our debt instruments contain restrictions that limit our flexibility in operating our business, and changes by any rating agency to our outlook or credit rating could negatively affect us The terms of our senior unsecured notes issued in January 2021 and December 2025, the revolving credit agreement and certain collateralized debt under securitization transactions contain, and any debt instruments we enter in the future may contain, covenants that restrict or could restrict, among other things, our business and operations.
In addition, any original or enforcement action in a court outside the U.S. will be subject to compliance with procedural requirements under applicable local law, including the condition that the judgment does not violate the public policy of the applicable jurisdiction.
In addition, any original or enforcement action in a court outside the U.S. will be subject to compliance with procedural requirements under applicable local law, including the condition that the judgment does not violate the public policy of the applicable jurisdiction. 30 | MercadoLibre, Inc.
If debt financing for potential future acquisitions is unavailable, we may determine to issue shares of our common stock or preferred stock in connection with such an acquisition, and any such issuance could result in the dilution of our common stock. 25 | MercadoLibre, Inc.
If debt financing for potential future acquisitions is unavailable, we may determine to issue shares of our common stock or preferred stock in connection with such an acquisition, and any such issuance could result in the dilution of our common stock.
The use of AI/ML, including potential inadvertent disclosure of confidential information or personal data, could also lead to legal and regulatory investigations and enforcement actions, or may give rise to specific obligations, including required notices, consents and opt-outs, under various data privacy, protection and cybersecurity laws and regulations in a number of jurisdictions.
The use of AI/ML, including potential inadvertent disclosure of confidential information or personal data, could also lead to legal and regulatory investigations and enforcement actions, as well as reputational harm or may give rise to specific obligations, including required notices, consents and opt-outs, under various data privacy, protection and cybersecurity laws and regulations in a number of jurisdictions.
Similarly, a lack of market acceptance of these services or our inability to generate satisfactory revenues from any expanded services to offset their cost could have a material adverse effect on our business, results of operations and financial condition.
Similarly, a lack of market acceptance of these services or our inability to generate satisfactory revenues from any expanded services to offset their cost could have a material adverse effect on our business, results of operations and financial condition. 20 | MercadoLibre, Inc.
The SPs are also responsible for securing our customers’ tokens and crypto-assets and protecting them from loss or theft. We, in turn, provide a platform that acts as an interface for our customers to access the SPs’ services.
The SPs are also responsible for securing our customers’ digital-assets and protecting them from loss or theft. We, in turn, provide a platform that acts as an interface for our customers to access the SPs’ services.
If we suffer potential liability for any unlawful activities of our users, including as a result of damages to individuals or assets, we may need to implement additional measures to reduce our exposure to this liability, which may require, among other things, that we spend substantial resources and/or discontinue certain service offerings.
If we suffer potential liability for any unlawful activities of our users, service providers or third-party carriers, including as a result of damages to individuals or assets, we may need to implement additional measures to reduce our exposure to this liability, which may require, among other things, that we spend substantial resources and/or discontinue certain service offerings.
If our users have negative experiences with, or view unfavorably, any of the companies or partners with whom we have relationships, it could cause them to stop using our products and services and negatively impact our results of operations. 21 | MercadoLibre, Inc.
If our users have negative experiences with, or view unfavorably, any of the companies or partners with whom we have relationships, it could cause them to stop using our products and services and negatively impact our results of operations.
We must constantly add new hardware, update software, enhance and improve our billing and transaction systems, and add and train new engineering and other personnel to accommodate the increased use of our website, apps and the new products and features we regularly introduce.
T able of Contents We must constantly add new hardware, update software, enhance and improve our billing and transaction systems, and add and train new engineering and other personnel to accommodate the increased use of our website, apps and the new products and features we regularly introduce.
Failure to comply with local obligations could result in significant criminal and civil penalties, in addition to reputational and operational consequences. Shipping A number of jurisdictions where we operate have enacted legislation regulating shipping services.
Failure to comply with any such obligations could result in significant criminal and civil penalties, in addition to reputational and operational consequences. Shipping A number of jurisdictions where we operate have enacted legislation regulating shipping services.
The decision to raise the shipping fees we charge to users may have a negative effect on Mercado Envios’ shipping volume, and the decision not to do so may result in a decrease in the operating margins of our commerce operations.
The decision to raise the shipping fees charged to users may have a negative effect on Mercado Envios’ shipping volume, and the decision not to do so may result in a decrease in the operating margins of our commerce operations.
If we are unable to compete effectively for advertising spend, or if our merchants reduce advertising spend, our business and results of operations could be materially harmed We have developed a growing advertising business on our platform.
T able of Contents If we are unable to compete effectively for advertising spend, or if our merchants reduce advertising spend, our business and results of operations could be materially harmed We have developed a growing advertising business on our platform.
Our lending solution exposes us to the credit risk of our merchants and consumers, among other risks Our lending solution is offered to certain merchants and consumers, and the financial success of this product depends on the effective management of the credit-related risk.
T able of Contents Our lending solution exposes us to the credit risk of our merchants and consumers, among other risks Our lending solution is offered to certain merchants and consumers, and the financial success of this product depends on the effective management of the credit-related risk.
Third parties have attempted, and will likely continue to attempt, to abuse access to and misuse our payments solution to commit fraud by, among other things, creating fictitious accounts using stolen or synthetic identities or personal information, making transactions with stolen financial instruments, abusing or misusing our services for financial gain or fraudulently inducing users of our platforms into engaging in fraudulent transactions.
Third parties have attempted, and will likely continue to attempt, to abuse access to and misuse our payments solution to commit fraud by, among other things, creating fictitious accounts using stolen or synthetic identities or personal information, making transactions with stolen financial instruments or fraudulently inducing users of our platforms into engaging in fraudulent transactions.
The following is a summary of the principal risks that we believe are material to our stockholders and prospective stockholders and that should be carefully considered when evaluating our Company, our business and prospects: ■ Our business depends on the continued growth of online commerce and digital financial services, the commercial and financial activity that our users generate on our platforms and the availability and reliability of the Internet in Latin America; ■ We operate in a highly competitive and evolving environment; ■ We rely on third-party platforms, such as Google Play and Apple app stores, to access our Mercado Libre and Mercado Pago apps; ■ Our future success depends on our ability to expand and adapt our operations to meet rapidly changing industry and technology standards in a cost-effective and timely manner; ■ The markets in which we operate are rapidly evolving and we may not be able to maintain our profitability; ■ We may be liable for or experience reputational damage from the failure of users of our Marketplace to deliver merchandise or make required payments; ■ Fraudulent activity by our users could negatively impact our operating results, brand and reputation and cause the use of services to decrease; ■ We are subject to consumer trends and could lose revenue if certain items become less popular or if we fail to meet customer demand; ■ Manufacturers may limit distribution of their products by distributors, prevent distributors from selling through us or encourage governments to limit e-commerce; ■ Our failure or the failure of our partners to manage Mercado Pago users’ funds properly could harm our business; ■ We rely on banks and investment funds that acquire Mercado Pago’s receivables and payment processors to fund transactions, and changes to card association fees, rules or practices may adversely affect our business; ■ The failure of the financial institutions with which we conduct business may have a material adverse effect on our business, operating results, and financial condition; ■ A rise in interest rates may negatively affect our Mercado Pago payment volume; ■ Changes in Mercado Pago’s funding mix and ticket mix could adversely affect Mercado Pago’s results; ■ Our lending solution exposes us to the credit risk of our merchants and consumers, among other risks; ■ We face significant risks related to the ongoing reliability of our logistics network and shipping service; ■ Failure to successfully operate our fulfillment network may also negatively affect our business; ■ Problems that affect our service providers could potentially adversely affect us as well; ■ If we are unable to compete effectively for advertising spend, or if our merchants reduce advertising spend, our business and results of operations could be materially harmed; ■ We may not realize benefits from recent or future strategic investments, acquisitions of businesses, technologies, services or products, despite their capital outlay and potential dilution to our stockholders; ■ We depend on key personnel, the loss of which could have a material adverse effect on us; ■ We may have inadequate business insurance coverage, which would require us to spend significant resources in the event of a disruption of our services or other contingency; ■ Our debt instruments contain restrictions that limit our flexibility in operating our business, and changes by any rating agency to our outlook or credit rating could negatively affect us; ■ We hold and may acquire digital assets that may be subject to volatile market prices and unique risks of loss; ■ Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks; ■ There are potential risks related to our loyalty program and our cryptocurrency buy, hold and sell feature; 18 | MercadoLibre, Inc.
The following is a summary of the principal risks that we believe are material to our stockholders and prospective stockholders and that should be carefully considered when evaluating our Company, our business and prospects: ■ Our business depends on the continued growth of online commerce and digital financial services, the commercial and financial activity that our users generate on our platforms and the availability and reliability of the Internet in Latin America; ■ We operate in a highly competitive and evolving environment; ■ Any use of AI/ML technologies in our operations may present additional labor, legal, regulatory, and social risks, which could lead to additional costs and impact our competitive position; ■ We rely on third-party platforms, such as Google Play and Apple app stores, to access our Mercado Libre and Mercado Pago apps; ■ Our future success depends on our ability to expand and adapt our operations to meet rapidly changing industry and technology standards in a cost-effective and timely manner; ■ The markets in which we operate are rapidly evolving and we may not be able to maintain our profitability; ■ We may be liable for or experience reputational damage resulting from user default or the failure of our ecosystem services ; ■ Fraudulent activity by our users could negatively impact our operating results, brand and reputation and cause the use of services to decrease; ■ We are subject to consumer trends and could lose revenue if certain items become less popular or if we fail to meet customer demand; ■ Manufacturers may limit distribution of their products by distributors, prevent distributors from selling through us or encourage governments to limit e-commerce; ■ Our failure or the failure of our partners to manage Mercado Pago users’ funds properly could harm our business; ■ We rely on banks and investment funds that acquire Mercado Pago’s receivables and payment processors to fund transactions, and changes to card association fees, rules or practices may adversely affect our business; ■ The failure of the financial institutions with which we conduct business may have a material adverse effect on our business, operating results, and financial condition; ■ A rise in interest rates may negatively affect our Mercado Pago payment volume; ■ Changes in Mercado Pago’s funding mix and ticket mix could adversely affect Mercado Pago’s results; ■ Our lending solution exposes us to the credit risk of our merchants and consumers, among other risks; ■ We face significant risks related to the ongoing reliability of our logistics network and shipping service; ■ Failure to successfully operate our fulfillment network may also negatively affect our business; ■ Problems that affect our service providers could potentially adversely affect us as well; ■ If we are unable to compete effectively for advertising spend, or if our merchants reduce advertising spend, our business and results of operations could be materially harmed; ■ We may not realize benefits from recent or future strategic investments, acquisitions of businesses, technologies, services or products, despite their capital outlay and potential dilution to our stockholders; ■ We depend on key personnel, the loss of which could have a material adverse effect on us; ■ We may have inadequate business insurance coverage, which would require us to spend significant resources in the event of a disruption of our services or other contingency; ■ Our debt instruments contain restrictions that limit our flexibility in operating our business, and changes by any rating agency to our outlook or credit rating could negatively affect us; ■ We are exposed to the value of digital assets that may be subject to volatile market prices and unique risks of loss; ■ Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks; 17 | MercadoLibre, Inc.
In addition, AI tools may access our confidential information, including personal data. Moreover, there is a risk that an employee may input confidential information, including material non-public information, trade secrets or personal identifiable information, into AI/ML applications, resulting in such information becoming accessible by third parties, including our competitors.
Moreover, there is a risk that an employee may input confidential information, including material non-public information, trade secrets or personal identifiable information, into AI/ML applications, resulting in such information becoming accessible by third parties, including our competitors.
Any costs that we incur as a result of this liability or asserted liability could have a material adverse effect on our business, results of operations and financial condition. 30 | MercadoLibre, Inc.
Any costs that we incur as a result of this liability or asserted liability could have a material adverse effect on our business, results of operations and financial condition.
However, we are aware that certain goods, such as alcohol, tobacco, firearms, animals, adult material and other goods that may be subject to regulation by local or national authorities of various jurisdictions have been traded by users on the Mercado Libre Marketplace in complete infringement to our policies, bypassing our various security efforts and measures to go undetected.
However, we are aware that certain goods, such as alcohol, tobacco, firearms, protected animal species, adult material, medication, drugs and other goods that may be subject to regulation by local or national authorities of various jurisdictions have been traded by users on the Mercado Libre Marketplace in complete infringement to our policies, bypassing our various security efforts and measures, to go undetected.
Changes in Mercado Pago’s funding mix and ticket mix could adversely affect Mercado Pago’s results Mercado Pago pays significant transaction fees when customers fund payment transactions using certain debit and credit cards or through unaffiliated entities, nominal fees when customers fund payment transactions from their bank accounts, and no fees when customers fund payment transactions from an existing Mercado Pago account balance.
Changes in Mercado Pago’s funding mix and ticket mix could adversely affect Mercado Pago’s results Mercado Pago pays significant transaction fees when customers fund payment transactions using debit or credit cards or through unaffiliated third-party providers, nominal fees when customers fund transactions from their bank accounts, and no fees when customers fund transactions from an existing Mercado Pago account balance.
The SPs’ failure to safeguard the crypto-assets owned by our customers may result in losses to our customers, which could adversely affect our customers’ confidence in our tokens and crypto-assets and negatively affect our business.
The SPs’ failure to safeguard the digital-assets owned by our customers may result in losses to our customers, which could adversely affect our customers’ confidence in digital-assets and negatively affect our business.
In 2024 and 2023, installment payments represented 20.3% and 21.3%, respectively, of Mercado Pago’s total payment volume. To subsidize the cost of the installment payment feature, from time to time we pay interest to discount credit card receivables, securitize credit card receivables through trusts or finance Mercado Pago business through financial debt.
In 2025 and 2024, installment payments represented 19.0% and 20.3%, respectively, of Mercado Pago’s total payment volume. To subsidize the cost of the installment payment feature, from time to time we pay interest to discount credit card receivables, securitize credit card receivables through trusts or finance Mercado Pago business through financial debt.
Any changes to, or failure to comply with, these laws and regulations, or any laws or regulations affecting services that involve a partnership with a custodian and blockchain infrastructure providers, may negatively impact our token loyalty program and the ability to enable our customers to buy, hold and sell crypto-assets in the future and may adversely affect our business.
Any changes to, or failure to comply with, these laws and regulations, or any laws or regulations affecting services that involve a partnership with a custodian and blockchain infrastructure providers, may negatively impact our ability to enable our customers to buy, hold and sell digital-assets in the future and may adversely affect our business.
A disruption in our relationship with the SPs or in any of the services provided by them to users could adversely affect our customers’ confidence in our loyalty program, crypto-assets offerings through the SPs and, by extension, our business.
A disruption in our relationship with the SPs or in any of the services provided by them to users could adversely affect our customers’ confidence in our digital-assets offerings through the SPs and, by extension, our business.
The public cloud providers we use could also decide to close their facilities or be required to suspend the provision of services.
The public cloud providers we use could also decide to close their facilities or be required to suspend the provision of services. 32 | MercadoLibre, Inc.
Table of Contents Because we conduct our business outside the U.S. and receive almost all of our revenues in currencies other than the U.S. dollar, but report our results in U.S. dollars, we face exposure to adverse movements in currency exchange rates.
T able of Contents Because we conduct our business outside the U.S. and receive almost all of our revenues and financial income in currencies other than the U.S. dollar, but report our results in U.S. dollars, we face exposure to adverse movements in currency exchange rates.
Measures to detect and reduce the occurrence of fraudulent activities are complex and require continuous improvement, and there can be no assurance that they will be sufficient to accurately detect, prevent or deter fraud, particularly new and continually evolving forms of fraud.
Measures to detect and reduce the occurrence of fraudulent activities are complex and require continuous improvement, and there can be no assurance that we will be able to successfully and accurately detect, prevent or deter fraud, particularly new and continually evolving forms of fraud.
Even if we are not required to change our Mercado Pago business, we could be required to obtain licenses or regulatory approvals.
Even if we are not required to change our Mercado Pago business, we could be required to obtain licenses or regulatory approvals. 29 | MercadoLibre, Inc.
Any such technical issues could negatively affect our customers’ confidence in our loyalty program and the crypto-assets offering. In addition, the SPs maintain the cryptographic private keys that allow access to the digital accounts where our customers’ tokens and crypto-assets are held in custody.
Any such technical issues could negatively affect our customers’ confidence in the digital-assets offering. In addition, the SPs maintain the cryptographic private keys that allow access to the digital accounts where our customers’ digital-assets are held in custody.
While we have taken steps to make our program and these offerings secure, tokens and digital assets in the custody of various other custodians have in the past been hacked or lost.
While we have taken steps to make these offerings secure, digital assets in the custody of various other custodians have in the past been hacked or lost.
Risks related to our business and operations Our business depends on the continued growth of online commerce and digital financial services, the commercial and financial activity that our users generate on our platforms and the availability and reliability of the Internet in Latin America Online commerce and digital financial services are still a developing market in Latin America.
Risks related to our business and operations Our business depends on the continued growth of online commerce and digital financial services, the commercial and financial activity that our users generate on our platforms and the availability and reliability of the Internet in Latin America Online commerce and digital financial services are still a developing market in Latin America, with usage patterns continuing to evolve rapidly.
Our future success depends on our ability to expand and adapt our operations to meet rapidly changing industry and technology standards in a cost-effective and timely manner Rapid, significant and disruptive technological changes impact the industries in which we operate. Moreover, the effects of technological changes on our business are uncertain.
Our future success depends on our ability to expand and adapt our operations to meet rapidly changing industry and technology standards in a cost-effective and timely manner Rapid, significant and disruptive technological changes impact the industries in which we operate.
The unavailability of the services of local carriers in certain regions with high demand could negatively affect our ability to provide shipping services to our customers, which could in turn have a material adverse effect on our shipping service, operating results, and financial condition. 24 | MercadoLibre, Inc.
The unavailability of the services of local carriers in certain regions with high demand could negatively affect our ability to make shipping services available to our customers, which could in turn have a material adverse effect on our shipping service, operating results, and financial condition.
Security breaches, financial, regulatory or other developments that might prevent these third parties from providing services to us or our users could harm our business.
Security breaches, regulatory requirements, national security prohibitions or other developments that might prevent these third parties from providing services to us or our users could harm our business.
There are also potential risks to MercadoLibre in connection with a feature of our Mercado Pago services that gives customers the ability to access—through our Mercado Pago platform—crypto-assets trading and custody services that are rendered by third parties, which allow users to buy, hold, sell and transfer certain global cryptocurrencies and stablecoins.
T able of Contents There are potential risks related to our cryptocurrency buy, hold and sell feature There are potential risks to MercadoLibre in connection with a feature of our Mercado Pago services that gives customers the ability to access—through our Mercado Pago platform—digital-assets trading and custody services that are rendered by third parties, which allow users to buy, hold, sell and transfer certain global cryptocurrencies and stablecoins.
We cannot provide any assurances that we will successfully avoid civil or criminal liability for unlawful activities that our users carry out when using our services in the future.
We cannot provide any assurances that we will successfully avoid civil or criminal liability for unlawful activities that our users, service providers or third-party carriers carry out when using our services in the future.
Argentina’s annual inflation rate for the years ended December 31, 2024, 2023 and 2022 was 117.8%, 211.4% and 94.8%, respectively, and Argentina’s official exchange rate against the U.S. dollar increased 27.7%, 356.3% and 72.5%, respectively.
Argentina’s annual inflation rate for the years ended December 31, 2025, 2024 and 2023 was 31.5%, 117.8% and 211.4%, respectively, and Argentina’s official exchange rate against the U.S. dollar increased 41.0%, 27.7% and 356.3%, respectively.
For both our token loyalty program and our buy, hold and sell Mercado Pago feature, we rely on third party service providers to perform several functions in connection therewith. Such service providers (“SPs”) provide our customers token and crypto-assets exchange services (whereby customers can buy and sell tokens and certain crypto-assets) as well as tokens and crypto-assets custody services.
For our buy, hold and sell Mercado Pago feature, we rely on third party service providers to perform several functions in connection therewith. Such service providers (“SPs”) provide our customers digital-assets exchange services (whereby customers can buy and sell certain digital-assets) as well as digital-assets custody services.
Demand for our products and services can fluctuate significantly for many reasons, including due to perceived availability, consumer trends, seasonality, promotions, product launches, defective products or unforeseeable events, such as in response to natural or man-made disasters, public health crises (including pandemics), extreme weather (including as a result of climate change), geopolitical events, or changes in or uncertainty about macro-economic conditions, which could impact the overall volume of transactions on our platforms.
Demand for our products and services can fluctuate significantly for many reasons, including due to perceived availability, consumer trends, the adoption of new technologies (such as AI-driven tools) that may bypass our marketplace search results, seasonality, promotions, product launches, defective products or unforeseeable events, such as in response to natural or man-made disasters, public health crises (including pandemics), extreme weather (including as a result of climate change), geopolitical events, or changes in or uncertainty about macro-economic conditions, which could impact the overall volume of transactions on our platforms.
Failure to accurately forecast consumer trends and demand could significantly affect our revenue and our future growth. 22 | MercadoLibre, Inc.
Failure to accurately forecast consumer trends and demand could significantly affect our revenue and our future growth.
Brazil, Argentina and Mexico, which together accounted for 95.7% and 95.6% of our net revenues and financial income for 2024 and 2023, respectively, have experienced volatility and significant devaluations in the past. For the year ended December 31, 2024, the inflation rate in Brazil, Argentina and Mexico was 4.8%, 117.8% and 4.2%, respectively.
Brazil, Argentina and Mexico, which together accounted for 95.6% and 95.7% of our net revenues and financial income for 2025 and 2024, respectively, have experienced volatility and significant devaluations in the past. For the year ended December 31, 2025, the inflation rate in Brazil, Argentina and Mexico was 4.3%, 31.5% and 3.7%, respectively.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAnnually and on an as-necessary basis, individual members of management and/or of the risk committee provide presentations to the Audit Committee regarding cybersecurity matters, including any material risks. These presentations include information regarding cybersecurity risks, the evolution of those risks and initiatives to optimize and improve the processes of cybersecurity.
Biggest changeThe Audit Committee supervises the Company’s risk management framework, including the policies and procedures used to identify, assess, measure, and manage both current and potential cybersecurity risks. On an annual basis—and whenever circumstances require—management and/or members of the Risk Committee brief the Audit Committee on cybersecurity matters, including any material risks.
Our risk management framework further includes processes to manage cybersecurity risks associated with third parties, including, a third-party risk management program that focuses on identifying security and data privacy risks arising out of our interactions with critical third-party suppliers and payment methods, and a program focused on assessing risks arising in mergers and acquisitions transactions.
Our risk management framework also includes processes to manage cybersecurity risks associated with third parties, including, a third-party risk management program that focuses on identifying security and data privacy risks arising out of our interactions with critical third-party suppliers and payment methods, and a program focused on assessing risks arising in mergers and acquisitions transactions.
In the last fiscal three years, we have not experienced any material information security breach incidents and the expenses we have incurred from information security breach incidents were immaterial. See “Risk Factors” in Item 1A of this Annual Report on Form 10-K for more information on our cybersecurity-related risks. 36 | MercadoLibre, Inc.
In the last fiscal three years, we have not experienced any material information security breach incidents and the expenses we have incurred from information security breach incidents were immaterial. See “Risk Factors” in Item 1A of this Annual Report on Form 10-K for more information on our cybersecurity-related risks.
Our risk management framework includes several security pillars, including data security, identity management, cloud security, infrastructure security, application security, incident response, and cybersecurity risk management.
Our risk management framework includes several security pillars, including data security, identity management, cloud security, infrastructure security, application security, incident response, and cybersecurity risk management. 35 | MercadoLibre, Inc.
We conduct annual International Organization for Standardization Information Security Management Systems ("ISMS") Requirements ("ISO/IEC 27001") reviews and Payment Card Industry Data Security Standard ("PCI-DSS") reviews of our payment information security controls with the assistance of an external certified auditor. Our cybersecurity risk management processes incorporate frameworks aligned with recognized cybersecurity and cyber risk established frameworks.
T able of Contents We conduct annual International Organization for Standardization Information Security Management Systems (“ISMS”) Requirements (“ISO/IEC 27001”) reviews and Payment Card Industry Data Security Standard (“PCI-DSS”) reviews of our payment information security controls with the assistance of an external certified auditor. Our cybersecurity risk management processes incorporate frameworks aligned with recognized cybersecurity and cyber risk established frameworks.
Table of Contents Governance Management The cybersecurity risk management processes described above are managed by our Cybersecurity VP under the supervision of the risk committee. The Audit Committee of the board of directors provides additional oversight as needed.
Governance Management The cybersecurity risk management processes described above are managed by our Cybersecurity VP under the supervision of the risk committee.
Our Cybersecurity VP is a certified information systems security professional and has considerable experience in the field of information security, fraud and prevention. As part of our cybersecurity risk management processes, our Cybersecurity VP presents security risk matters to the risk committee on an as-necessary basis and to the Audit Committee annually and on an as-necessary basis.
T able of Contents As part of our cybersecurity risk management processes, our Cybersecurity VP presents security risk matters to the risk committee on an as-necessary basis and to the Audit Committee annually and on an as-necessary basis.
Board of directors The Audit Committee is primarily responsible for the oversight of cybersecurity risks and threats.
Board of directors Our full board of directors provide ultimate oversight for the cybersecurity program, in addition to other significant risks of the Company. The board of directors has delegated primary oversight of cybersecurity risks and threats to the Audit Committee.
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To fulfill this responsibility, the Audit Committee, assisted, as appropriate, by the risk committee, oversees the risk management framework, including risk assessment and risk management policies and procedures established by management to identify, evaluate, measure and manage existing and potential cybersecurity risks faced by the Company.
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Our risk management framework includes processes to manage cybersecurity risks associated with AI, such as enhanced governance of AI-related traffic, expanded automated scanning and blocking capabilities, and the building of comprehensive inventories that support continuous monitoring.
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Further, in the event of a specific cybersecurity incident, these presentations include information about the relevant security incident, such as incident status, informed stakeholders and remediation plans.
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We also deploy cross-ecosystem protections—including prompt-injection defenses, confidentiality controls for conversations and sensitive data, a strong focus in agentic identity management to ensure secure authentication and authorization across AI-driven interactions, and dedicated initiatives to identify and mitigate shadow AI usage across the organization.
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Additionally, we have procedures in place to block high-risk providers, minimize sensitive access paths, and automate key evaluations. Together, these measures are intended to reduce the likelihood and impact of AI-related cybersecurity incidents while enabling the safe and responsible use of AI across the organization.
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Our Cybersecurity VP is a certified information systems security professional (CISSP) with over 25 years of experience in cybersecurity, information security governance, technology and operational risk management, and fraud prevention. He holds a degree in computer engineering and has led large, geographically distributed security and technology organizations across Latin America.
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His background spans multiple industries, including e-commerce, fintech, logistics and digital services, where he has designed and implemented enterprise cybersecurity strategies, cloud security programs, incident response capabilities and risk-based control frameworks.
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He also played a foundational role in establishing and scaling the Company’s cybersecurity function, contributing to the development of its governance model and the expansion of its regional security operations. 36 | MercadoLibre, Inc.
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These updates cover the nature and evolution of cybersecurity risks, as well as initiatives aimed at strengthening and optimizing cybersecurity processes. In the event of a specific cybersecurity incident, these briefings also provide details on the incident’s status, the stakeholders informed, and the remediation actions underway.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, our owned and leased facilities (excluding data centers) provided us with square meters as follows: Argentina Brazil Mexico Others Total Owned facilities (1) 5,766 — — 880 6,646 Leased facilities 103,699 1,721,362 1,350,233 91,279 3,266,573 Managed by Third Parties (2) 85,761 733,708 — 140,351 959,820 Total facilities 195,226 2,455,070 1,350,233 232,510 4,233,039 (1) Includes offices in Venezuela.
Biggest changeAs of December 31, 2025, our owned and leased facilities (excluding data centers) provided us with square meters as follows: Argentina Brazil Mexico Others Total Owned facilities (1) 5,499 — — 880 6,379 Leased facilities 192,139 2,589,203 2,024,993 129,185 4,935,520 Managed by Third Parties (2) 135,480 756,778 — 149,221 1,041,479 Total facilities 333,118 3,345,981 2,024,993 279,286 5,983,378 (1) Includes offices in Venezuela.
ITEM 2. PROPERTIES We lea se facilities in different countries of Latin America that are used for administrative, marketing, product development and shipping activities purposes. All of our offices are occupied under lease agreements, except for three of our Argentine offices and the Venezuelan offices that are owned by the Company.
ITEM 2. PROPERTIES We lea se facilities in different countries of Latin America that are used for administrative, marketing, product development and shipping activities purposes. All of our offices are occupied under lease agreements, except for one of our Argentine offices and the Venezuelan offices that are owned by the Company.
While we believe our existing facilities are adequate to meet our immediate needs, it may become necessary to lease or acquire additional or alternative space to accommodate any future growth. For Mercado Envios, we operate fulfillment, cross docking and service centers in multiple locations in Argentina, Brazil, Mexico, Chile, Colombia and Uruguay. Our headquarters are located in Montevideo, Uruguay.
While we believe our existing facilities are adequate to meet our immediate needs, it may become necessary to lease or acquire additional or alternative space to accommodate any future growth. For Mercado Envios, we operate fulfillment, cross docking and service centers in multiple locations in Argentina, Brazil, Mexico, Chile, Colombia, United States, Peru, Uruguay and China.
T he leases for our facilities provide for renewal options and after expiration, we can renegotiate the leases with our current landlords, or move to another location. From time to time we consider various alternatives related to our long-term facility needs.
The leases for our facilities provide for renewal options and after expiration, we can renegotiate the leases with our current landlords, or move to a nother location. From time to time we consider various alternatives related to our long-term facility needs.
Our data centers are located in Virginia, United States, and occupy approximately 45 square meters.
Ou r headquarters are located in Montevideo, Uruguay. Our data centers are located in Virginia, United States, and occupy approximately 100 square meters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plan Information Information regarding securities authorized for issuance under the Company’s equity compensation plan as of December 31, 2024 is set forth in “Item 12.
Biggest changeEquity Compensation Plan Information Information regarding securities authorized for issuance under the Company’s equity compensation plan as of December 31, 2025 is set forth in “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.” Recent Sales of Unregistered Securities There were no sales of unregistered securities by us during the year ended December 31, 2025.
Table of Contents Stock Performance Graph The graph below shows the total stockholder return of an investment of $100 on December 31, 2019 through December 31, 2024 for (i) our common stock; (ii) the Nasdaq Composite Index; (iii) the S&P 500 Index; and (iv) the Dow Jones Industrial Average Index.
Stock Performance Graph The graph below shows the total stockholder return of an investment of $100 on December 31, 2020 through December 31, 2025 for (i) our common stock; (ii) the Nasdaq Composite Index; (iii) the S&P 500 Index; and (iv) the Dow Jones Industrial Average Index.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information for Common Stock Shares of our common stock, par value $0.001 per share, trade on the Nasdaq Global Select Market (“NASDAQ”) under the symbol “MELI”.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information for Common Stock Shares of our common stock, par value $0.001 per share, trade on the Nasdaq Global Select Market (“NASDAQ”) under the symbol “MELI.” 37 | MercadoLibre, Inc.
Holders of record As of January 31, 2025, we had 198 holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name. Recent Sales of Unregistered Securities There were no sales of unregistered securities by us during the year ended December 31, 2024.
T able of Contents Holders of record As of January 31, 2026, we had 198 holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.” Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Program (in millions) October, 2024 — — — — November, 2024 — — — — December, 2024 — — — — 38 | MercadoLibre, Inc.
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Issuer Purchases of Equity Securities During the three-month period ended December 31, 2025, there were no purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of shares of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents product and technology development expenses for the years indicated: Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023 2024 2023 in Dollars in % 2023 2022 in Dollars in % (In millions, except percentages) (In millions, except percentages) Product and technology development $ 1,934 $ 1,831 $ 103 5.6% $ 1,831 $ 1,099 $ 732 66.6% As a percentage of net revenues and financial income 9.3% 12.1% 12.1% 10.2% 47 | MercadoLibre, Inc.
Biggest changeThe following table presents product and technology development 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 in Dollars in % (In millions, except percentages) (In millions, except percentages) Product and technology development $ 2,269 $ 1,934 $ 335 17.3% $ 1,934 $ 1,831 $ 103 5.6% As a percentage of net revenues and financial income 7.9% 9.3% 9.3% 12.1% For the year ended December 31, 2025, the increase in product and technology development expenses as compared to the year ended December 31, 2024, was primarily attributable to: i) a $182 million increase in salaries and wages mainly related to the increase of 11% in our product and technology development headcount and increases in amounts accrued under the LTRPs; ii) a $113 million increase in technology maintenance expenses; and iii) a $52 million increase in other product and technology development expenses mainly related to higher tax withholding in connection with intercompany export services billing duties.
Fintech monthly active users is defined as Fintech payers and/or collectors as of December 31, 2024, that, during the last month of the reporting period, performed at least one of the following actions during such month: 1) made a debit or credit card payment, 2) made a QR code payment, 3) made an off-platform online payment using our checkout or link of payment solutions while logged in to our Mercado Pago fintech platform, 4) made an investment or employed any of our savings solutions, 5) purchased an insurance policy, 6) took out a loan through our lending solution, or 7) received the payment from a sale or transaction either on or off marketplace.
Fintech monthly active users is defined as Fintech payers and/or collectors as of December 31, 2025, that, during the last month of the reporting period, performed at least one of the following actions during such month: 1) made a debit or credit card payment, 2) made a QR code payment, 3) made an off-platform online payment using our checkout or link of payment solutions while logged in to our Mercado Pago fintech platform, 4) made an investment or employed any of our savings solutions, 5) purchased an insurance policy, 6) took out a loan through our lending solution, or 7) received the payment from a sale or transaction either on or off marketplace.
Legal 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.
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.
We believe that the accounting estimate related to allowance for doubtful accounts on loans receivable a critical accounting estimate because it requires Management to make complex assumptions and scenarios to estimate the CECL.
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.
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 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 are currently involved in certain legal proceedings as discussed in “Item 3—Legal Proceedings,” and in Note 16 – 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.
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.
Table of Contents 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.
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.
(2) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2022 and applying them to the corresponding months in 2023, so as to calculate what our financial results would have been had exchange rates remained stable from one year to the next.
(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.
Our lending solution is available in Argentina, Brazil, Mexico and Chile. We offer credits 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.
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.
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. 42 | MercadoLibre, Inc.
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.
GAAP, we present earnings before interest income and other financial gains, interest expense and other financial losses, foreign currency losses, net, income tax expense, depreciation and amortization and equity in earnings of unconsolidated entity (“Adjusted EBITDA”), net debt, foreign exchange (“FX”) neutral measures and Adjusted free cash flow and Net increase (decrease) in available cash and investments as non-GAAP measures.
GAAP, we present earnings before interest income and other financial gains, net, interest expense and other financial losses, foreign currency losses, net, income tax expense, depreciation and amortization and equity in earnings of unconsolidated entity (“Adjusted EBITDA”), net debt, foreign exchange (“FX”) neutral measures and Adjusted free cash flow and Net increase (decrease) in available cash, investments and digital assets as non-GAAP measures.
Management uses NIMAL to monitor how effective our pricing is and managing the credit products relative to their risk and setting targets. Accordingly, Management is of the opinion that NIMAL provides useful information to investors and others related to our risk appetite through the different periods and shows how we effectively prices risk. 60 | MercadoLibre, Inc.
Management uses NIMAL to monitor how effective our pricing is and managing the credit products relative to their risk and setting targets. Accordingly, Management is of the opinion that NIMAL provides useful information to investors and others related to our risk appetite through the different periods and shows how we effectively prices risk. 57 | MercadoLibre, Inc.
The FX neutral measures were 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 results would have been had exchange rates remained stable from one year to the next.
The FX neutral measures were 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 results would have been had exchange rates remained stable from one year to the next.
As we continue to grow and focus on expanding our leadership in the region, we will continue to invest in product and technology development, sales and marketing and human resources in order to promote our services and capture long-term business opportunities. As a result, we may experience decreases in our operating income margins.
As we continue to grow and focus on expanding our leadership in the region, we will continue to invest in product and technology development, and sales and marketing in order to promote our services and capture long-term business opportunities. As a result, we may experience decreases in our operating income margins.
We consider Net increase (decrease) in available cash and investments to be a measure of liquidity availability that provides useful information to management and investors after netting out all other debt and corporate payments and activities from the adjusted free cash flow.
We consider Net increase (decrease) in available cash, investments and digital assets to be a measure of liquidity availability that provides useful information to management and investors after netting out all other debt and corporate payments and activities from the adjusted free cash flow.
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 Chile, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.).
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.).
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 $61 million.
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.
Debt Debt Securities Guaranteed by Subsidiaries On January 14, 2021, we issued $400 million aggregate principal amount of 2.375% Sustainability Notes due 2026 (the “2026 Sustainability Notes”) and $700 million aggregate principal amount of 3.125% Notes due 2031 (the “2031 Notes” and collectively, the “Notes”).
Debt Debt Securities Guaranteed by Subsidiaries On January 14, 2021, we issued $400 million aggregate principal amount of 2.375% Sustainability Notes due 2026 (the “2026 Sustainability Notes”) and $700 million aggregate principal amount of 3.125% Notes due 2031 (the “2031 Notes”).
The comparative FX neutral measures were calculated by using the average monthly exchange rates for each month during 2022 and applying them to the corresponding months in 2023.The table below excludes intercompany allocation FX effects.
The comparative FX neutral measures were calculated by using the average monthly exchange rates for each month during 2023 and applying them to the corresponding months in 2024. The table below excludes intercompany allocation FX effects.
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.
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.
Fintech revenues 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 and consumer 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.
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.
Adjusted free cash flow and Net increase (decrease) in available cash and investments Adjusted free cash flow Adjusted free cash flow represents cash from operating activities less the increase (decrease) in cash and cash equivalents and investments related to customer funds due to regulatory requirements and other restrictions and equity securities held at cost, investments in property and equipment and intangible assets, changes in loans receivable, net and net proceeds from/payments on loans payable and other financial liabilities related to our Fintech solutions, since we consider those liabilities as the working capital of the Fintech activities.
T able of Contents Adjusted free cash flow and Net increase (decrease) in available cash, investments and digital assets Adjusted free cash flow Adjusted free cash flow represents cash from operating activities less the increase (decrease) in cash and cash equivalents and investments related to customer funds due to regulatory requirements and other restrictions and equity securities held at cost, investments in property and equipment and intangible assets, changes in loans receivable, net and net proceeds from/payments on loans payable and other financial liabilities related to our Fintech solutions, since we consider those liabilities as the working capital of the Fintech activities.
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.
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.
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. 40 | MercadoLibre, Inc.
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 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.
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.
For the years ended December 31, 2024, 2023 and 2022, no single customer accounted for more than 5.0% of our net revenues and financial income.
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.
Table of Contents FX neutral We believe that FX neutral measures provide useful information to both Management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.
T able of Contents FX neutral We believe that FX neutral measures provide useful information to both Management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.
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.
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.
The payment of principal, premium, if any, interest, and all other amounts in respect of each of the Notes, is fully and unconditionally guaranteed (the “Subsidiary Guarantees”), jointly and severally, on an unsecured basis, by certain of our subsidiaries (the “Subsidiary Guarantors”).
The payment of principal, premium, if any, interest, and all other amounts in respect of each of the 2026 Sustainability Notes and the 2031 Notes, is fully and unconditionally guaranteed (the “Subsidiary Guarantees”), jointly and severally, on an unsecured basis, by certain of our subsidiaries (the “Subsidiary Guarantors”).
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 U.K. and China.
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.
Table of Contents 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.
T able of Contents 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.
Other Data The following table includes eight key performance indicators, which are calculated as defined in the footnotes to the table. We continuously address the adequacy of our key performance indicators based on the growth and ever-changing nature of our business.
T able of Contents Other Data The following table includes eight key performance indicators, which are calculated as defined in the footnotes to the table. We continuously address the adequacy of our key performance indicators based on the growth and ever-changing nature of our business.
Table of Contents 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.
T able of Contents 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.
Other income (expenses), net Other income (expenses), net consists primarily of interest income derived from our investments and cash equivalents and, interest expense and other financial charges related to financial liabilities not related to Mercado Pago’s operations, and foreign currency gains or losses.
T able of Contents Other income (expenses), net Other income (expenses), net consists primarily of interest income derived from our investments and cash equivalents, interest expense and other financial charges related to financial liabilities not related to Mercado Pago’s operations, and foreign currency gains or losses.
Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law.
Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law. 54 | MercadoLibre, Inc.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details. 44 | MercadoLibre, Inc.
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.
See Note 2 – Summary of significant accounting policies – Foreign currency translation – Argentine currency status and macroeconomic outlook and Argentine exchange regulations of our audited consolidated financial statements for further detail on the currency status and the exchange regulations of our Argentine segment.
See Note 2 – Summary of significant accounting policies – Foreign currency translation – Argentine currency status and macroeconomic outlook and Argentine exchange regulations of our audited consolidated financial statements for further detail on the currency status and the exchange regulations of our Argentine segment. 60 | 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 that browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate.
T able of Contents 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.
In 2024, in Brazil and Mexico we launched "Meli Dólar", a stablecoin that is pegged to the US dollar. 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 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.
Please refer to Note 2 – Summary of significant accounting policies and Note 15 – 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 include in this section sets forth, for the years presented, certain data from 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.
We anticipate continued investments in capital expenditures related to information technology and logistics network capacity in the future as we strive to maintain our position in the Latin American e-commerce and fintech market. 59 | MercadoLibre, Inc.
We anticipate continued investments in capital expenditures related to information technology and logistics network capacity in the future as we strive to maintain our position in the Latin American e-commerce and fintech market.
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 6.6%, 7.7% and 7.5% of net revenues and financial income for the years ended December 31, 2024, 2023 and 2022, respectively.
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.
The following table sets forth the percentage of our consolidated net revenues and financial income by segment for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (% of total consolidated net revenues and financial income) 2024 2023 (1) 2022 (1) Brazil 54.9 % 51.8 % 53.8 % Mexico 22.4 20.3 17.6 Argentina 18.4 23.5 23.9 Other countries 4.3 4.4 4.7 (1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.
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 prior years results to our audited consolidated financial statements for further details.
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.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details.
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.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details.
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.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details.
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.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details.
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.
Each Subsidiary Guarantee will be limited to the maximum amount that would not render the Subsidiary Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of applicable law.
T able of Contents Each Subsidiary Guarantee will be limited to the maximum amount that would not render the Subsidiary Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of applicable law.
Segment information See Note 10 – Segments of our audited consolidated financial statements for detailed description about our reporting segments.
Segment information See Note 8 – Segments of our audited consolidated financial statements for detailed description about our reporting segments.
Table of Contents We believe that our existing cash and cash equivalents, including the sale of credit card receivables, short-term investments and cash generated from operations, will be sufficient to fund our operating activities, property and equipment expenditures and to pay or repay obligations in the foreseeable future.
We believe that our existing cash and cash equivalents, including the sale of credit card receivables, short-term investments and cash generated from operations, will be sufficient to fund our operating activities, property and equipment expenditures and to pay or repay obligations in the foreseeable future. 56 | MercadoLibre, Inc.
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, 2024 and 2023, our gross profit margins were 46.1% and 50.2%, respectively.
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.
Following years of investment, our logistics network now ships 95% of items sold. As such, the two performance metrics, "Number of items sold" and "Number of items shipped," have converged so we no longer see a benefit for investors in disclosing both.
Following years of investment, our logistics network currently ships almost all items sold. As such, the two performance metrics, "Number of items sold" and "Number of items shipped," have converged so we no longer see a benefit for investors in disclosing both.
Capital expenditures Our capital expenditures comprised of our investments in property and equipment (such as certain assets used in our fulfillment centers) and intangible assets (excluding digital assets) for the years ended December 31, 2024 and 2023 amounted to $860 million and $509 million, respectively.
Capital expenditures Our capital expenditures comprised of our investments in property and equipment (such as certain assets used in our fulfillment centers) and intangible assets (excluding digital assets) for the years ended December 31, 2025 and 2024 amounted to $1,327 million and $860 million, respectively.
Table of Contents Non-GAAP Measures of Financial Performance To supplement our audited consolidated financial statements presented in accordance with U.S.
T able of Contents Non-GAAP Measures of Financial Performance To supplement our audited consolidated financial statements presented in accordance with U.S.
In the future, our gross profit margin could continue declining if we maintain the growth of our sales of goods business, which has a lower pure product margin, building up our logistics network and if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues and financial income trend.
T able of Contents 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.
Provision for doubtful accounts Provision for doubtful accounts consists of the current expected credit losses on our financial assets, mainly loans receivable.
T able of Contents Provision for doubtful accounts Provision for doubtful accounts consists of the current expected credit losses on our financial assets, mainly loans receivable.
When the Company acts as principal, revenues derived from shipping services are recognized upon delivery of the good to the customer, and presented on a gross basis.
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.
During the year ended December 31, 2024, we invested $316 million in information and technology assets in Brazil, Argentina and Mexico, and $484 million in our Argentine, Brazilian and Mexican shipping premises and offices. We are continually increasing our level of investment in hardware and software licenses necessary to improve and update our platform’s technology and computer software developed internally.
During the year ended December 31, 2025, we invested $411 million in information and technology assets in Brazil, Argentina and Mexico, and $778 million in our Brazilian and Mexican shipping premises and offices. We are continually increasing our level of investment in hardware and software licenses necessary to improve and update our platform’s technology and computer software developed internally.
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, 2024, 2023 and 2022; ■ 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 39 | MercadoLibre, Inc.
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.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details. 49 | MercadoLibre, Inc.
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.
Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details. 54 | MercadoLibre, Inc.
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. 51 | MercadoLibre, Inc.
The following table presents Other income (expenses), net for the years indicated: Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023 2024 2023 (1) in Dollars in % 2023 (1) 2022 (1) in Dollars in % (In millions, except percentages) (In millions, except percentages) Other income (expenses), net $ (199) $ (654) $ 455 (69.6)% $ (654) $ (289) $ (365) 126.3% As a percentage of net revenues and financial income -1.0 % -4.3% -4.3% -2.7% (1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.
The following table presents Other income (expenses), net 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) Other income (expenses), net $ (359) $ (199) $ (160) 80.4% $ (199) $ (654) $ 455 (69.6%) As a percentage of net revenues and financial income (1.2%) (1.0%) (1.0%) (4.3%) (1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.
(2) Excludes foreign government debt securities restricted, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost. 62 | MercadoLibre, Inc.
(3) Excludes foreign government debt securities restricted, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost. 59 | MercadoLibre, Inc.
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 will be discontinued as of December 31, 2025.
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.
Our non-U.S. dollar-denominated cash and investments are located primarily in Brazil, Mexico and Argentina. 56 | MercadoLibre, Inc.
Our non-U.S. dollar-denominated cash and investments are located primarily in Brazil, Mexico and Argentina.
To the extent we believe that it is more likely than not that some portion or the total deferred tax assets will not be realized, we establish a valuation allowance. As of December 31, 2024 and 2023, our valuation allowance amounted to $584 million and $374 million, respectively.
To the extent we believe that it is more likely than not that some portion or the total deferred tax assets will not be realized, we establish a valuation allowance. As of December 31, 2025 and 2024, our valuation allowance amounted to $764 million and $584 million, respectively. 49 | MercadoLibre, Inc.
(4) Includes other income/(expense) from transactions with non-guarantor subsidiaries of $97 million for the year ended December 31, 2024.
(4) Includes other income/(expense) from transactions with non-guarantor subsidiaries of $73 million for the year ended December 31, 2025.
The following table sets forth the growth in net revenues and financial income in local currencies, for the years ended December 31, 2024 and 2023 as compared to the same periods in 2023 and 2022, respectively: Changes from (% of revenue growth in Local Currency) 2023 to 2024 (1) 2022 to 2023 (2) Brazil 58.5 % 30.2 % Mexico 58.7 42.7 Argentina (3) 244.0 202.1 Other countries 44.1 26.1 Total consolidated 101.5 % 73.2 % (1) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2023 and applying them to the corresponding months in 2024, so as to calculate what our financial results would have been had exchange rates remained stable from one year to the next.
T able of Contents 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.
The following table summarizes the composition of our deferred tax assets from loss carryforwards as of December 31, 2024 and 2023: December 31, December 31, Loss carryforwards 2024 in % 2023 in % (In millions, except percentages) (In millions, except percentages) Mexico $ 35 54.7 % $ 123 69.5 % Brazil 9 14.1 31 17.5 Argentina 4 6.3 10 5.6 Other countries 16 24.9 13 7.4 Total $ 64 100.0 % $ 177 100.0 % We also assess the likelihood that our net deferred tax assets will be realized from future taxable income.
The following table summarizes the composition of our deferred tax assets from loss carryforwards as of December 31, 2025 and 2024: December 31, December 31, Loss carryforwards 2025 in % 2024 in % (In millions, except percentages) (In millions, except percentages) Brazil $ 149 81.0 % $ 9 14.1 % Argentina 11 6.0 4 6.3 Mexico — — 35 54.7 Other countries 24 13.0 16 24.9 Total $ 184 100.0 % $ 64 100.0 % We also assess the likelihood that our net deferred tax assets will be realized from future taxable income.
Table of Contents 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) 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% 2022 (1) Net revenues and financial income $ 2,277 $ 2,638 $ 2,753 $ 3,112 Percent change from prior quarter 5% 16% 4% 13% (1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.
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.
Net increase (decrease) in available cash and investments Net increase (decrease) in available cash and investments represents adjusted free cash flow less net proceeds from/payments on loans payable and other financial liabilities, related to our Commerce and corporate activities, payments of finance lease obligations, other investing and/or financing activities not considered above and the effect of exchange rates changes on available cash and investments.
Net increase (decrease) in available cash, investments and digital assets Net increase (decrease) in available cash, investments and digital assets (from the second quarter of 2025 onwards, our available funds include digital asset holdings) represents adjusted free cash flow less net proceeds from/payments on loans payable and other financial liabilities, related to our Commerce and corporate activities, payments of finance lease obligations, other investing and/or financing activities not considered above and the effect of exchange rates changes on available cash and investments.
Table of Contents See Note 10 – 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, 2024, 2023 and 2022.
T able of Contents 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.
Table of Contents Net debt We define net debt as total debt which includes current and non-current loans payable and other financial liabilities and current and non-current operating lease liabilities, less cash and cash equivalents, short-term investments and long-term investments, excluding time deposits and foreign government debt securities restricted and held in guarantee, securitization transactions and equity securities held at cost.
T able of Contents Net debt We define net debt as total debt which includes current and non-current loans payable and other financial liabilities and current and non-current operating lease liabilities, less cash and cash equivalents (excluding cash and cash equivalents restricted due to management restriction policies) and digital assets, short-term investments and long-term investments, excluding time deposits, foreign debt securities and foreign government debt securities restricted and held in guarantee, securitization transactions and equity securities held at cost.
The following table presents cost of net revenues and financial expenses for the years indicated: Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023 2024 2023 (1) in Dollars in % 2023 (1) 2022 (1) in Dollars in % (In millions, except percentages) (In millions, except percentages) Cost of net revenues and financial expenses $ 11,200 $ 7,517 $ 3,683 49.0% $ 7,517 $ 5,582 $ 1,935 34.7% As a percentage of net revenues and financial income 53.9% 49.8% 49.8% 51.8% (1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.
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.
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. 43 | MercadoLibre, Inc.
T able of Contents 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.
Table of Contents General and administrative expenses Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of non-employee directors, long term retention program compensation, expenses for legal, audit and other professional services, contingencies, insurance expenses, office space rental expenses, changes in the fair value (for the years ended December 31, 2024 and 2023) and impairment (for the year ended December 31, 2022) of digital assets, travel and business expenses, as well as depreciation and amortization expenses.
General and administrative expenses Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of non-employee directors, long term retention program compensation, expenses for legal, audit and other professional services, contingencies, insurance expenses, office space rental expenses, changes in the fair value of digital assets, travel and business expenses, as well as depreciation and amortization expenses.
The total amount paid during 2023 for those repurchases amounted to $66 million. During 2024, we repurchased $27 million and $81 million in principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively. The total amount paid during 2024 for those repurchases amounted to $98 million.
During 2024, we repurchased $27 million and $81 million in principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively. The total amount paid during 2024 for those repurchases amounted to $98 million. In January 2026, we repaid the total outstanding amount of principal and interest of the 2026 Sustainability Notes equaling $367 million.
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 performance products (product ads and brand ads) and display formats, 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; and ■ fees from other ancillary businesses.
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.
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 a buyer elects to receive an item through our shipping service, net of the third-party carrier costs (when we act as an agent).
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTable of Contents Foreign currency sensitivity analysis The table below shows the impact on our net revenues and financial income, cost of net revenues and financial expenses, operating expenses, other income (expenses), income tax expense, net income and shareholders' equity for a positive and a negative 10% fluctuation on all the foreign currencies to which we are exposed to at the moment of translating our financial statements to U.S. dollars for the year ended December 31, 2024: (10)% (1) Actual ' +10% (2) (In millions) Net revenues and financial income $ 23,081 $ 20,777 $ 18,891 Expenses (3) (20,103) (18,146) (16,543) Income from operations 2,978 2,631 2,348 Other income (expenses) and income tax expense related to P&L items (596) (538) (492) Foreign Currency impact related to the remeasurement of our Net Asset position (202) (182) (165) Net Income $ 2,180 $ 1,911 $ 1,691 Total Shareholders’ Equity $ 4,842 $ 4,351 $ 3,949 (1) Increase of the subsidiaries local currency against U.S.
Biggest changeForeign currency sensitivity analysis The table below shows the impact on our net revenues and financial income, cost of net revenues and financial expenses, operating expenses, other income (expenses), net, income tax expense, net income and shareholders' equity for a positive and a negative 10% fluctuation on all the foreign currencies to which we are exposed to at the moment of translating our financial statements to U.S. dollars for the year ended December 31, 2025: (10)% (1) Actual ' +10% (2) (In millions) Net revenues and financial income $ 32,097 $ 28,893 $ 26,271 Expenses (3) (28,420) (25,692) (23,459) Income from operations 3,677 3,201 2,812 Other income (expenses), net and income tax expense (1,327) (1,204) (1,103) Net Income $ 2,350 $ 1,997 $ 1,709 Total Shareholders’ Equity $ 7,537 $ 6,748 $ 6,103 (1) Appreciation of the subsidiaries local currency against U.S.
The following table shows a sensitivity analysis of the risk associated with our total contractual obligation fair value related to the outstanding LTRP Variable Award Payment subject to equity price risk if our common stock price per share were to increase or decrease by up to 40%: 67 | MercadoLibre, Inc.
The following table shows a sensitivity analysis of the risk associated with our total contractual obligation fair value related to the outstanding LTRP Variable Award Payment subject to equity price risk if our common stock price per share were to increase or decrease by up to 40%: 64 | MercadoLibre, Inc.
We use foreign currency exchange forward contracts and currency swaps to protect our foreign currency exposure and our investment in a foreign subsidiary from adverse changes in foreign currency exchange rates. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse foreign currency exchange rate movements.
We use foreign currency exchange forward contracts and cross currency swaps to protect our foreign currency exposure and our investment in a foreign subsidiary from changes in foreign currency exchange rates. These hedging contracts reduce, but do not entirely eliminate, the impact of foreign currency exchange rate movements.
See Note 2 – Summary of significant accounting policies - Foreign currency translation - Argentine currency status and macroeconomic outlook of our audited consolidated financial statements for further detail on the currency status and the exchange regulations of our Argentine segment. 66 | MercadoLibre, Inc.
See Note 2 – Summary of significant accounting policies - Foreign currency translation - Argentine currency status and macroeconomic outlook of our audited consolidated financial statements for further detail on the currency status and the exchange regulations of our Argentine segment. 63 | MercadoLibre, Inc.
To manage exchange rate risk, our treasury policy is to transfer most cash and cash equivalents in excess of working capital requirements into U.S. dollar-denominated accounts in the United States and to enter into certain foreign exchange derivatives, such as currency forwards contracts, in order to mitigate our exposure to foreign exchange risk.
To manage exchange rate risk, our treasury policy is to transfer most cash and cash equivalents in excess of working capital requirements into U.S. dollar-denominated accounts in the United States and to enter into certain foreign exchange derivatives, such as currency forwards contracts or cross currency swaps, in order to mitigate our exposure to foreign exchange risk.
In order to receive the full target award under the 2020, 2021, 2022, 2023 and/or 2024 LTRPs, each eligible employee must remain employed as of each applicable payment date.
In order to receive the full target award under the 2021, 2022, 2023, 2024 and/or 2025 LTRPs, each eligible employee must remain employed as of each applicable payment date.
As of December 31, 2024, we hold cash and cash equivalents, restricted cash and cash equivalent, short and long-term investments in local currencies in our subsidiaries, and have receivables denominated in local currencies in all of our operations. Our subsidiaries generate revenues and incur most of their expenses in the respective local currencies of the countries in which they operate.
As of December 31, 2025, we hold cash and cash equivalents, restricted cash and cash equivalents, short and long-term investments in local currencies in our subsidiaries, and have receivables denominated in local currencies in all of our operations. Our subsidiaries generate revenues and incur most of their expenses in the respective local currencies of the countries in which they operate.
Therefore, no translation effect has been accounted for in other comprehensive income related to our Argentine operations since July 1, 2018. Argentina’s annual inflation rate for the years ended December 31, 2024, 2023 and 2022 was 117.8%, 211.4% and 94.8%, respectively.
Therefore, no translation effect has been accounted for in other comprehensive income related to our Argentine operations since July 1, 2018. Argentina’s annual inflation rate for the years ended December 31, 2025, 2024 and 2023 was 31.5%, 117.8% and 211.4%, respectively.
The 2020, 2021, 2022, 2023 and 2024 LTRP awards are payable as follows: ■ the eligible employee will receive 16.66% of half of his or her target 2020, 2021, 2022, 2023 and/or 2024 LTRP award once a year for a period of six years, with the first payment occurring no later than April 30, 2021, 2022, 2023, 2024 and 2025, respectively (the “2020, 2021, 2022, 2023 or 2024 Annual Fixed Payment”, respectively); and ■ on each date we pay the respective Annual Fixed Payment to an eligible employee, he or she will also receive a payment (the “2020, 2021, 2022, 2023 or 2024 Variable Payment”) equal to the product of (i) 16.66% of half of the target 2020, 2021, 2022, 2023 or 2024 LTRP award and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the average closing price of our common stock on the NASDAQ Global Select Market during the final 60 trading days of 2019, 2020, 2021, 2022 and 2023 defined as $553.45, $1,431.26, $1,391.81, $888.69 and $1,426.11 for the 2020, 2021, 2022, 2023 and 2024 LTRPs, respectively.
The 2021, 2022, 2023, 2024 and 2025 LTRP awards are payable as follows: ■ the eligible employee will receive 16.66% of half of his or her target 2021, 2022, 2023, 2024 and/or 2025 LTRP bonus once a year for a period of six years, with the first payment occurring no later than April 30, 2022, 2023, 2024, 2025 and 2026, respectively (the “2021, 2022, 2023, 2024 or 2025 Annual Fixed Payment,” respectively); and ■ on each date we pay the respective Annual Fixed Payment to an eligible employee, he or she will also receive a payment (the “2021, 2022, 2023, 2024 or 2025 Variable Payment”) equal to the product of (i) 16.66% of half of the target 2021, 2022, 2023, 2024 and/or 2025 LTRP bonus and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the average closing price of our common stock on the NASDAQ Global Select Market during the final 60 trading days of 2020, 2021, 2022, 2023 and 2024 defined as $1,431.26, $1,391.81, $888.69, $1,426.11 and $1,944.47 for the 2021, 2022, 2023, 2024 and 2025 LTRPs, respectively.
We have entered into swap and future contracts to hedge the interest rate fluctuation of $589 million notional amount, $486 million of which have been designated as hedging instruments. See Note 23 – Derivative instruments of our audited consolidated financial statements for further detail on derivatives instruments.
We have entered into swap and future contracts to hedge the interest rate fluctuation of $923 million notional amount, $807 million of which have been designated as hedging instruments. See Note 21 – Derivative instruments of our audited consolidated financial statements for further detail on derivatives instruments.
Additionally, we would have recorded a foreign currency loss amounting to approximately $10 million in our Mexican subsidiaries. Argentine segment In accordance with U.S. GAAP, we have classified our Argentine operations as highly inflationary since July 1, 2018, using the U.S. dollar as the functional currency for purposes of reporting our financial statements.
Additionally, we would have recorded a foreign currency loss amounting to approximately $77 million in our Mexican subsidiaries regarding our non-functional currency net liability position. Argentine segment In accordance with U.S. GAAP, we have classified our Argentine operations as highly inflationary since July 1, 2018, using the U.S. dollar as the functional currency for purposes of reporting our financial statements.
See Note 3 – Fintech Regulations and Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments of our audited consolidated financial statements for further detail on our restricted investments.
See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments of our audited consolidated financial statements for further detail on our restricted investments.
Considering a hypothetical decrease of 10% of the Argentine Peso against the U.S. dollar on December 31, 2024, the effect on non-functional currency net asset position in our Argentine subsidiaries would have been a foreign exchange loss amounting to approximately $72 million in our Argentine subsidiaries.
Considering a hypothetical increase (depreciation) of 10% of the Argentine Peso against the U.S. dollar on December 31, 2025, the effect on non-functional currency net asset position in our Argentine subsidiaries would have been a foreign exchange loss amounting to approximately $47 million in our Argentine subsidiaries.
Considering a hypothetical increase of 100 basis points in the interest rates, the reported charge to the consolidated statements of income for the year ended December 31, 2024 would have increased by approximately $28 million with the impact in Cost of net revenues and financial expenses or in Interest expense and other financial losses.
Considering a hypothetical increase of 100 basis points in the interest rates, the reported charge to the consolidated statements of income for the year ended December 31, 2025 would have increased by approximately $55 million with an impact of $49 million in Cost of net revenues and financial expenses and $6 million in Interest expense and other financial losses.
Fixed rate securities may have their fair value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. As of December 31, 2024, our short-term investments amounted to $4,485 million and our long-term investments amounted to $1,203 million.
Fixed rate securities may have their fair value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. As of December 31, 2025, our short-term investments amounted to $2,629 million and our long-term investments amounted to $1,764 million.
We use Argentina’s official exchange rate to account for transactions in our Argentine segment, which as of December 31, 2024, 2023 and 2022 was 1,032.00, 808.45 and 177.16, respectively, against the U.S. dollar. For the years ended December 31, 2024, 2023 and 2022, Argentina’s official exchange rate against the U.S. dollar increased 27.7%, 356.3% and 72.5%, respectively.
We use Argentina’s official exchange rate to account for transactions in our Argentine segment, which as of December 31, 2025, 2024 and 2023 was 1,455.00, 1,032.00 and 808.45, respectively, against the U.S. dollar. For the years ended December 31, 2025, 2024 and 2023, Argentina’s official exchange rate against the U.S. dollar increased 41.0%, 27.7% and 356.3%, respectively.
See Note 18 – Loans payable and other financial liabilities and Note 21 – Securitization transactions of our audited consolidated financial statements for further detail.
See Note 16 – Loans payable and other financial liabilities and Note 19 – Securitization transactions of our audited consolidated financial statements for further detail.
Brazilian segment Considering a hypothetical decrease of 10% of the Brazilian Real against the U.S. dollar on December 31, 2024, the reported net assets in our Brazilian subsidiaries would have decreased by approximately $286 million with the related impact in Other Comprehensive Income.
Brazilian segment Considering a hypothetical increase (depreciation) of 10% of the Brazilian Real against the U.S. dollar on December 31, 2025, the reported local currency net assets in our Brazilian subsidiaries would have decreased by approximately $407 million with the related impact in Other Comprehensive Income.
Mexican segment Considering a hypothetical decrease of 10% of the Mexican peso against the U.S. dollar on December 31, 2024, the reported net assets in our Mexican subsidiaries would have decreased by approximately $142 million with the related impact in Other Comprehensive Income.
Mexican segment Considering a hypothetical increase (depreciation) of 10% of the Mexican peso against the U.S. dollar on December 31, 2025, the reported local currency net assets in our Mexican subsidiaries would have decreased by approximately $268 million with the related impact in Other Comprehensive Income.
Equity price risk Our board of directors, upon the recommendation of the compensation committee, approved the 2020, 2021, 2022, 2023 and 2024 Long Term Retention Programs (the “2020, 2021, 2022, 2023 and 2024 LTRPs”), respectively, under which certain eligible employees have the opportunity to receive cash payments annually for a period of six years (with the first payment occurring no later than April 30, 2021, 2022, 2023, 2024 and 2025 for the 2020, 2021, 2022, 2023 and 2024 LTRPs, respectively).
Equity price risk Our board of directors, upon the recommendation of the compensation committee, approved the 2021, 2022, 2023, 2024 and 2025 Long Term Retention Programs (the “2021, 2022, 2023, 2024 and 2025 LTRPs”, respectively), under which certain eligible employees have the opportunity to receive cash payments annually for a period of six years.
As of December 31, 2024, our Loans payable and other financial liabilities which accrue interest based on variable rates amounted to $3,920 million, while our Loans payable and other financial liabilities, which accrue interest based on fixed rates, amounted to $1,795 million.
As of December 31, 2025, our Loans payable and other financial liabilities which accrue interest based on variable rates amounted to $6,077 million, while our Loans payable and other financial liabilities, which accrue interest based on fixed rates, amounted to $3,116 million.
Additionally, we would have recorded a foreign currency loss amounting to approximately $51 million in our Brazilian subsidiaries.
Additionally, we would have recorded a foreign currency loss amounting to approximately $9 million in our Brazilian subsidiaries regarding our non-functional currency net liability position.
As of December 31, 2024, the total cash and cash equivalents, restricted cash and cash equivalent denominated in foreign currencies totaled $4,032 million, short-term investments denominated in foreign currencies totaled $3,779 million and accounts receivable, credit card receivables and other means of payments and loans receivable in foreign currencies totaled $10,437 million.
As of December 31, 2025, the total cash and cash equivalents, restricted cash and cash equivalents denominated in foreign currencies totaled $12,217 million, short-term investments denominated in foreign currencies totaled $1,056 million, long-term investments denominated in foreign currencies totaled $844 million and accounts receivable, credit card receivables and other means of payments and loans receivable in foreign currencies totaled $16,779 million.
As of December 31, 2024, the total contractual obligation fair value of our outstanding LTRP Variable Payment obligation subject to equity price risk amounted to $470 million. As of December 31, 2024, the accrued liability related to the outstanding Variable Payment of the LTRP included in Salaries and social security payable in our consolidated balance sheet amounted to $163 million.
As of December 31, 2025, the accrued liability related to the outstanding Variable Payment of the LTRP included in Salaries and social security payable in our consolidated balance sheet amounted to $176 million .
Table of Contents Interest Our earnings and cash flows are also affected by changes in interest rates. These changes could have an impact on the interest rates that financial institutions charge us prior to the time we sell our Mercado Pago receivables and on the financial debt that we use to fund Mercado Pago and lending’s operations.
These changes could have an impact on the interest rates that financial institutions charge us prior to the time we sell our credit card receivables and on the financial debt that we use to fund Mercado Pago, lending’s operations as well as expanding our logistic capacity.
Dollar. (2) Decrease of the subsidiaries local currency against U.S. Dollar. (3) Includes cost of net revenues and financial expenses and operating expenses. The table above shows an increase in our net income when the U.S. dollar weakens against foreign currencies because of the positive impact of the increase in income from operations.
T able of Contents The table above shows an increase in our net income when the U.S. dollar weakens against foreign currencies because of the positive impact of the increase in income from operations.
As of December 31, 2024, Mercado Pago’s receivables totaled $5,288 million. Interest rate fluctuations could also impact interest earned through our lending solution. As of December 31, 2024, loans receivable net of the allowance for doubtful accounts from our lending solution totaled $4,895 million.
As of December 31, 2025, credit card receivables and other means of payments, net totaled $7,046 million . Interest rate fluctuations could also impact interest earned through our lending solution. As of December 31, 2025, loans receivable net of the allowance for doubtful accounts from our lending solution totaled $9,365 million.
Table of Contents Change in equity price in percentage As of December 31, 2024 MercadoLibre, Inc Equity Price 2020, 2021, 2022, 2023 and 2024 LTRP Variable contractual obligation (In millions, except equity price) 40% 2,393.69 658 30% 2,222.71 611 20% 2,051.74 564 10% 1,880.76 517 Static (1) 1,709.78 470 -10% 1,538.80 423 -20% 1,367.82 376 -30% 1,196.85 329 -40% 1,025.87 282 (1) Present value of average closing stock price for the last 60 trading days of the year preceding the applicable payment date.
T able of Contents Change in equity price in percentage As of December 31, 2025 MercadoLibre, Inc Equity Price 2021, 2022, 2023, 2024 and 2025 LTRP Variable contractual obligation (In millions, except equity price) 40% 2,833.14 767 30% 2,630.77 713 20% 2,428.40 658 10% 2,226.04 603 Static (1) 2,023.67 548 -10% 1,821.30 493 -20% 1,618.94 439 -30% 1,416.57 384 -40% 1,214.20 329 (1) Present value of average closing stock price for the last 60 trading days of the year preceding the applicable payment date.
As of December 31, 2024, the total contractual obligation fair value of the mentioned payments amounted to $3 million, which was fully paid on January 2, 2025.
As of December 31, 2025, the total contractual obligation fair value of our outstanding LTRP Variable Payment obligation subject to equity price risk amounted to $548 million .
As of December 31, 2024, our U.S. dollar-denominated cash and cash equivalents, restricted cash and cash equivalents and short-term investments totaled $1,373 million and our U.S. dollar-denominated long-term investments totaled $708 million.
As of December 31, 2025, our U.S. dollar-denominated cash and cash equivalents, restricted cash and cash equivalents and short-term investments totaled $2,893 million and our U.S. dollar-denominated long-term investments totaled $920 million. For the year ended December 31, 2025, we had a consolidated loss on foreign currency of $337 million mainly related to foreign exchange losses from our Argentine subsidiaries.
Removed
As of December 31, 2024, we had $495 million long-term investments denominated in foreign currencies.
Added
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of operations— Other income (expenses), net” for more information.
Removed
For the year ended December 31, 2024, we had a consolidated loss on foreign currency of $182 million mainly related to lower foreign exchange losses due to acquisitions of financial instruments in the Argentine market at a price that reflects an additional cost of accessing U.S. dollars through an indirect mechanism due to restrictions imposed by the Argentine government for buying U.S. dollars at the official exchange rate, and due to lower foreign exchange losses from our Argentine subsidiaries.
Added
Dollar. (2) Depreciation of the subsidiaries local currency against U.S. Dollar. (3) Includes cost of net revenues and financial expenses and operating expenses. 62 | MercadoLibre, Inc.
Removed
This was partially offset by higher foreign exchange losses from our Brazilian and Mexican subsidiaries. 65 | MercadoLibre, Inc.
Added
T able of Contents Interest Our earnings and cash flows are also affected by changes in interest rates.
Removed
In November 2021, we acquired Kangu Participações S.A. Former Kangu’s shareholders who after the acquisition became the Company’s employees will receive cash payments annually over a three-year period subject to certain performance and stay conditions. The payments will be indexed based on changes in equity price of our Common Stock.

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