MERCADOLIBRE INC

Previous wording

Any statements made or implied in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements within the meaning of Section 27 A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and should be evaluated as such. The words “anticipate,” “believe,” “expect,” “intend,” “plan,” “estimate,” “target,” “project,” “should,” “may,” “could,” “will” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are contained throughout this report. Such forward looking statements include, but are not limited to, statements regarding MercadoLibre, Inc.'s expectations, objectives and progress against strategic priorities; initiatives and strategies related to our products and services; business and market outlook, opportunities, strategies and trends; impacts of foreign exchange; the potential impact of the uncertain macroeconomic and geopolitical environment on our financial results; customer demand and market expansion; our planned product and services releases and capabilities; industry growth rates; future stock repurchases; our expected tax rate and tax strategies; and the impact and result of pending legal, administrative and tax proceedings. Such forward-looking statements are subject to known and unknown risks, uncertainties and other important factors (in addition to those discussed elsewhere in this report) that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Some of the material risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described in “Item 1A—Risk Factors” in Part I of the Company’s 2023 10-K filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024. You should read that information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report, our unaudited interim condensed consolidated financial statements and related notes in Item 1 of Part I of this report and our audited consolidated financial statements and related notes in Item 8 of Part II of the Company’s 2023 10-K, as well as the factors discussed in the other reports and documents we file from time to time with the SEC.

Current wording

Any statements made or implied in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements within the meaning of Section 27 A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and should be evaluated as such. The words “anticipate,” “believe,” “expect,” “intend,” “plan,” “estimate,” “target,” “project,” “should,” “may,” “could,” “will” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are contained throughout this report. Our forward looking statements, and the risks and uncertainties related to them, include, but are not limited to, statements regarding MercadoLibre, Inc.'s expectations, objectives and progress against strategic priorities; initiatives and strategies related to our products and services; business and market outlook, opportunities, strategies and trends; impacts of foreign exchange; the potential impact of the uncertain macroeconomic and geopolitical environment on our financial results; customer demand and market expansion; our planned product and services releases and capabilities; industry growth rates; future stock repurchases; our expected tax rate and tax strategies; and the likelihood, impact and result of pending legal, administrative and tax proceedings or government investigations. Such forward-looking statements are subject to known and unknown risks, uncertainties and other important factors (in addition to those discussed elsewhere in this report) that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Some of the material risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described in “Item 1A—Risk Factors” in Part I of the Company’s 2024 10-K filed with the Securities and Exchange Commission (“SEC”) on February 21, 2025. You should read that information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report, our unaudited interim condensed consolidated financial statements and related notes in Item 1 of Part I of this report and our audited consolidated financial statements and related notes in Item 8 of Part II of the Company’s 2024 10-K, as well as the factors discussed in the other reports and documents we file from time to time with the SEC.

Previous wording

■a discussion of our principal trends and results of operations for the nine and three-month periods ended September 30, 2024 and 2023;

Current wording

■a discussion of our principal trends and results of operations for the three-month periods ended March 31, 2025 and 2024;

Previous wording

We routinely post important information for investors on our Investor Relations website, investor.mercadolibre.com. We use this 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. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this report.

Current wording

MercadoLibre, Inc. (together with its subsidiaries “us,” “we,”“our” or the “Company”) routinely post important information for investors on our Investor Relations website, investor.mercadolibre.com. We use this 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. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this report.

Previous wording

We are the largest online commerce ecosystem in Latin America based on unique visitors and we are 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. Our platform is designed to provide users with a complete portfolio of services to facilitate commercial transactions both digitally and offline.

Current wording

We are the leading online commerce and fintech ecosystem in Latin America. Our e-commerce platform is the leader in the region based on gross merchandise volume (“GMV”), and our fintech platform is the leader in monthly active users (“MAUs”) among fintech companies in Mexico, Argentina and Chile, and the second largest in Brazil. Mercado Libre's e-commerce platform is present in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela, Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in eight countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador). Our ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online and the processing of payments online and offline, as well as offering a wide array of simple day-to-day financial services.

Previous wording

We offer our users an ecosystem of six integrated e-commerce services and digital financial services: the Mercado Libre Marketplace, the Mercado Pago Fintech platform, the Mercado Envios logistics service, the Mercado Ads solution, the Mercado Libre Classifieds service and the Mercado Shops online storefronts solution.

Current wording

We offer our users an ecosystem of integrated e-commerce and digital financial services, which includes: the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and the Mercado Libre Classifieds service.

Previous wording

Through our e-commerce platform, we provide 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 and with one of the fastest-growing Internet penetration and e-commerce growth rates in the world. 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.

Current wording

Our e-commerce platform provides buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people where penetration of e-commerce over total retail significantly lags benchmarks such as the United States of America (“U.S.”), the United Kingdom (“U.K.”) and China. We believe that we offer world-class technological and commercial solutions that address the distinctive cultural and geographic challenges of operating a digital commerce platform in Latin America.

Previous wording

The Mercado Libre Marketplace, is a fully-automated, topically-arranged and user-friendly online commerce platform, which can be accessed through our website and mobile app. This platform enables us (when we act as sellers in our first party sales), merchants and individuals to list merchandise and conduct sales and purchases digitally. The Marketplace has an ample assortment of products, with a wide range of categories such as consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods.

Current wording

The Mercado Libre Marketplace is a user-friendly online commerce platform that can be accessed through our mobile app or website. Third-party sellers (“3P”) account for most of the GMV transacted on the Marketplace. We complement this by selling directly to consumers on a first-party basis (“1P”) in selected categories where we can enhance price competitiveness and assortment; this accounts for less than 10% of GMV. The Marketplace has an extensive assortment of products, with a wide range of categories including consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods. We also have a selection of international products available, primarily from sellers in China and the U.S., through our cross-border trade (“CBT”) operations. Our users can also list vehicles, properties and services they are looking to sell via Mercado Libre Classifieds. These listings differ from our Marketplace listings because we charge placing fees only, not final value fees.

Previous wording

To complement the Mercado Libre Marketplace and enhance the user experience for our buyers and sellers, we developed Mercado Pago, an integrated digital payments solution. Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplaces by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments. Now, Mercado Pago is a full ecosystem of financial technology solutions both in the digital and physical world. Our digital payments solution enables any MercadoLibre registered user to securely and easily send and receive digital payments and to pay for purchases made on any of Mercado Libre’s Marketplaces. Currently, Mercado Pago processes and settles all transactions on our Marketplaces in Argentina, Brazil, Mexico, Chile, Colombia, Uruguay, Peru and Ecuador.

Current wording

Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplace by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments. This brought trust to the merchant-consumer relationship. In the countries in which Mercado Pago operates, it processes and settles all transactions on our Marketplace.

Previous wording

Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre’s Marketplace. We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America. Today, Mercado Pago’s digital payments business not only allows merchants to facilitate checkout and payment processes on their websites through a branded or white label solution or software development kits, but it also enables users to transfer money in a simple manner to each other through the Mercado Pago website or on the Mercado Pago app. Through Mercado Pago, we brought trust to the merchant customer relationship, allowing online consumers to shop easily and safely, while giving them the confidence to share sensitive personal and financial data with us. Finally, we have also deepened our fintech offerings by growing our online-to-offline (“O2O”) products and services.

Current wording

Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre’s Marketplace. We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America.

Previous wording

Mercado Credito, our credit solution available in Argentina, Brazil, Mexico and Chile, leverages our user base, which is loyal and engaged, and in part has also been historically underserved or overlooked by financial institutions and suffers from a lack of access to needed credit. Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution.

Current wording

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. 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.

Previous wording

As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago wallet in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively. This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and exchange and offers the blockchain infrastructure platform. This feature is available for all users through their Mercado Pago wallet.

Current wording

As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago account in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively. This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and offers the blockchain infrastructure platform. This feature is available for all users through their Mercado Pago account. In 2024 and 2025 we launched “Meli Dólar,” a stablecoin that is pegged to the US dollar, in Brazil, Mexico and Chile. Members of our loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without charging any fees.

Previous wording

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 and Uruguay). Although we discuss long-term trends in our business, it is our policy not to provide earnings guidance in the traditional sense. We believe that uncertain conditions make the forecasting of near-term results difficult. Further, we seek to make decisions focused primarily on the long-term welfare of our Company and believe focusing on short-term earnings does not best serve the interests of our stockholders. We believe that execution of key strategic initiatives as well as our expectations for long-term growth in our markets will best create stockholder value. A long-term focus may make it more difficult for industry analysts and the market to evaluate the value of our Company, which could reduce the value of our common stock or permit competitors with short-term tactics to grow more rapidly than us. We, therefore, encourage potential investors to consider this strategy before making an investment in our common stock.

Current wording

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.). Although we discuss long-term trends in our business, it is our policy not to provide earnings guidance in the traditional sense. We believe that uncertain conditions make the forecasting of near-term results difficult. Further, we seek to make decisions focused primarily on the long-term welfare of our Company and believe focusing on short-term earnings does not best serve the interests of our stockholders. We believe that execution of key strategic initiatives as well as our expectations for long-term growth in our markets will best create stockholder value. A long-term focus may make it more difficult for industry analysts and the market to evaluate the value of our Company, which could reduce the value of our common stock or permit competitors with short-term tactics to grow more rapidly than us. We, therefore, encourage potential investors to consider this strategy before making an investment in our common stock.

Previous wording

The following table sets forth the percentage of our consolidated net revenues by segment for the nine and three-month periods ended September 30, 2024 and 2023:

Current wording

The following table sets forth the percentage of our consolidated net revenues and financial income by segment for the three-month periods ended March 31, 2025 and 2024:

Previous wording

There have been no significant changes in our critical accounting policies, Management estimates or accounting policies since the year ended December 31, 2023 and disclosed in the Company’s 2023 10-K, see “Critical Accounting Policies and Estimates”. For information regarding the change in the presentation of the statements of income, please refer to section “Change in the presentation of certain financial results and reclassification of prior year results” of Note 2 – Summary of significant accounting policies to our unaudited interim condensed consolidated financial statements included in Item 1 of Part I of this report.

Current wording

There have been no significant changes in our critical accounting policies, Management estimates or accounting policies since the year ended December 31, 2024 and disclosed in the Company’s 2024 10-K under the heading “Critical Accounting Policies and Estimates.”

Previous wording

Results of operations for the nine and three-month periods ended September 30, 2024 compared to the nine and three-month periods ended September 30, 2023

Current wording

Results of operations for the three-month period ended March 31, 2025 compared to the three-month period ended March 31, 2024

Previous wording

The selected financial data for the nine and three-month periods ended September 30, 2024 and 2023 discussed herein is derived from our unaudited interim condensed consolidated financial statements included in Item 1 of Part I of this report. The results of operations for the nine and three-month periods ended September 30, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024 or for any other period.

Current wording

The selected financial data for the three-month periods ended March 31, 2025 and 2024 discussed herein is derived from our unaudited interim condensed consolidated financial statements included in Item 1 of Part I of this report. The results of operations for the three-month period ended March 31, 2025, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025 or for any other period.

Previous wording

Revenues from Commerce transactions are mainly generated from:

Current wording

Commerce revenues are mainly generated from:

Previous wording

■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). 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. In addition, the Company generates storage fees, which are charged to the seller for the utilization of the Company’s fulfillment facilities;

Current wording

■shipping fees, which are generated when an item is delivered through our shipping service, net of the third-party carrier costs (when we act as an agent). 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. In addition, the Company generates storage fees, which are charged to the seller for the utilization of the Company’s fulfillment facilities;

Previous wording

■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;

Current wording

■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;

Previous wording

Fintech revenues and financial income correspond to our Mercado Pago service, which are attributable to:

Current wording

Fintech revenues and financial income are attributable to:

Previous wording

■interest, cash advances and fees from credit cards, merchant and consumer loans granted under our Mercado Credito solution;

Current wording

■interest, cash advances and fees from credit cards, merchant and consumer loans granted under our lending solution;

Previous wording

■commissions from additional fees we charge when our sellers elect to withdraw cash.

Current wording

■commissions from additional fees we charge when our sellers elect to withdraw cash; and

Previous wording

We have a highly fragmented customer revenue base given the large numbers of sellers and buyers who use our platforms. For the nine and three-month periods ended September 30, 2024 and 2023, no single customer accounted for more than 5.0% of our net revenues and financial income.

Current wording

We have a highly fragmented customer revenue base given the large numbers of sellers and buyers who use our platforms. For the three-month periods ended March 31, 2025 and 2024, no single customer accounted for more than 5.0% of our net revenues and financial income.

Previous wording

Our Mercado Libre Marketplace is available in 18 countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Venezuela (deconsolidated since December 1, 2017) and Paraguay), and Mercado Pago is available in 8 countries (Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador). Additionally, Mercado Envios is available in 8 countries (Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador). The functional currency for each country’s operations is the country’s local currency, except for Argentina, where the functional currency is the U.S. dollar due to Argentina’s status as a highly inflationary economy. Our net revenues are generated in multiple foreign currencies and then translated into U.S. dollars at the average monthly exchange rate. Please refer to Note 2 – Summary of significant accounting policies to our unaudited interim condensed consolidated financial statements for further detail on foreign currency translation.

Current wording

Our net revenues and financial income are generated in multiple foreign currencies and then translated into U.S. dollars at the average monthly exchange rate. The functional currency for each country’s operations is the country’s local currency, except for Argentina, where the functional currency is the U.S. dollar due to Argentina’s status as a highly inflationary economy. Please refer to Note 2 – Summary of significant accounting policies to our unaudited interim condensed consolidated financial statements for further detail on foreign currency translation.

Previous wording

Our net revenues and financial income grew during the nine and three-month periods ended September 30, 2024 as compared to the same periods in 2023, boosted by an increase in the share of shipping services where we act as principal, as opposed to agent, the growth of credits business originations and our total payment volume.

Current wording

Our net revenues and financial income grew during the three-month period ended March 31, 2025 as compared to the same period in 2024, boosted by the growth of credit originations from our lending solution, an increase in total payment volume and fees due to payment in installments in our Mercado Pago platform, and the growth in gross merchandise volume.

Previous wording

The following table summarizes our consolidated net revenues and financial income for the nine and three-month periods ended September 30, 2024 and 2023:

Current wording

The following table summarizes our consolidated net revenues and financial income for the three-month periods ended March 31, 2025 and 2024:

Previous wording

The following table summarizes our consolidated net revenues and financial income by revenue stream and geographic segment for the nine and three-month periods ended September 30, 2024 and 2023:

Current wording

The following table summarizes our consolidated net revenues and financial income by revenue stream and geographic segment for the three-month periods ended March 31, 2025 and 2024:

Previous wording

See Note 9 – Segments of our unaudited interim condensed consolidated financial statements for further information regarding our net revenues and financial income disaggregated by similar products and services for the nine and three-month periods ended September 30, 2024 and 2023.

Current wording

See Note 8 – Segments of our unaudited interim condensed consolidated financial statements for further information regarding our net revenues and financial income disaggregated by similar products and services for the three-month periods ended March 31, 2025 and 2024.

Previous wording

Our Commerce revenues grew $2,865 million and $1,011 million, or 49.9% and 47.5%, for the nine and three-month periods ended September 30, 2024, respectively, as compared to the same periods in 2023. This increase in Commerce revenues was primarily attributable to:

Current wording

Our Commerce revenues grew $807 million, or 32.3%, for the three-month period ended March 31, 2025, as compared to the same period in 2024. This increase in Commerce revenues was primarily attributable to:

Previous wording

■(i) an increase of $2,436 million and $805 million in our Commerce services revenues for the nine and three-month periods ended September 30, 2024, respectively, mainly related to a 18.0% and 13.6% increase in gross merchandise volume, respectively, (ii) a 28.8% and 29.4% increase in our shipped items, respectively, and (iii) higher flat fee contributions for low gross merchandise volume transactions. Shipping carrier costs, which are netted against revenues, decreased $916 million and $398 million, from $1,710 million and $611 million for the nine and three-month periods ended September 30, 2023, to $794 million and $213 million for the nine and three-month periods ended September 30, 2024, respectively, mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; and

Current wording

■an increase of $573 million in our Commerce services revenues for the three-month period ended March 31, 2025, mainly related to (i) a 17% increase in gross merchandise volume, and (ii) higher flat fee contributions for low gross merchandise volume transactions. Shipping carrier costs netted against revenues decreased $150 million, from $361 million for the three-month period ended March 31, 2024, to $211 million for the three-month period ended March 31, 2025, mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; and

Previous wording

Our Fintech revenues grew 23.3% and 20.8%, from $4,958 million and $1,799 million for the nine and three-month periods ended September 30, 2023, respectively, to $6,113 million and $2,173 million for the nine and three-month periods ended September 30, 2024, respectively. This increase was mainly generated by:

Current wording

Our Fintech revenues grew 43.3%, from $1,837 million for the three-month period ended March 31, 2024 to $2,632 million for the three-month period ended March 31, 2025. This increase was mainly generated by:

Previous wording

■an increase of $751 million and $238 million in our credits revenues for the nine and three-month periods ended September 30, 2024, respectively, mainly as a consequence of higher originations; and

Current wording

■an increase of $376 million in our Credit revenues for the three-month period ended March 31, 2025, mainly as a consequence of higher originations; and

Previous wording

Net revenues growth during the three-month period ended September 30, 2024, as compared to the same period in 2023, were offset by the average increase of Mexico´s exchange rate against U.S. dollar of 11.1%.

Current wording

Net revenues growth during the three-month period ended March 31, 2025, as compared to the same period in 2024, were offset by the average increase of Brazil’s exchange rate against U.S. dollar of 18.0%.

Previous wording

Net revenues growth during the nine and three-month periods ended September 30, 2024, as compared to the same periods in 2023, were offset by the average increase of Brazil´s exchange rate against U.S. dollar of 4.6% and 13.6%, respectively.

Current wording

Net revenues growth during the three-month period ended March 31, 2025, as compared to the same period in 2024, were offset by the average increase of Mexico’s exchange rate against U.S. dollar of 20.2%.

Previous wording

The main driver of the decrease in Argentina’s net revenues and financial income for the nine-month period ended September 30, 2024 is an average inter-annual increase of Argentina’s official exchange rate against the U.S. dollar of 273.8% for the nine-month period ended September 30, 2024, partially offset by an average inter-annual inflation rate in our Argentine segment of 262.8% for the nine-month period ended September 30, 2024.

Current wording

For the three-month period ended March 31, 2025, the increase in Argentina's net revenues and financial income was also boosted by the average inter-annual inflation rate in our Argentine segment of 69.1%, which was higher than the average of inter-annual increase of Argentina’s official exchange rate against the U.S. dollar of 26.7%.

Previous wording

The following table sets forth the growth in net revenues and financial income in local currencies, for the nine and three-month periods ended September 30, 2024 as compared to the same period in 2023:

Current wording

The following table sets forth the growth in net revenues and financial income in local currencies, for the three-month period ended March 31, 2025 as compared to the same period in 2024:

Previous wording

(2)For the nine-month period ended September 30, 2024, the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 273.8% was partially offset by an average inter-annual inflation rate in our Argentine segment of 262.8%. For the three-month period ended September 30, 2024, the average inter-annual inflation rate in our Argentine segment of 236.4% was higher than the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 204.7%.

Current wording

(2)For the three-month period ended March 31, 2025, the average inter-annual inflation rate in our Argentine segment of 69.1% was higher than the average inter-annual increase of Argentina’s official exchange rate against U.S. dollar of 26.7%.

Previous wording

Cost of net revenues and financial expenses primarily includes shipping operation costs (including warehousing costs), carrier and other operating costs, cost of goods sold, collection fees, sales taxes, funding costs related to our credits and Mercado Pago business, fraud prevention expenses, hosting and site operation fees, certain tax withholding related to export duties, compensation for customer support personnel and depreciation and amortization. The following table presents cost of net revenues and financial expenses for the periods indicated:

Current wording

Cost of net revenues and financial expenses primarily includes shipping operation costs (including warehousing costs), carrier and other operating costs, cost of goods sold, collection fees, sales taxes, funding costs related to our fintech business, fraud prevention expenses, hosting and site operation fees, certain tax withholding related to export duties, compensation for customer support personnel and depreciation and amortization. The following table presents cost of net revenues and financial expenses for the periods indicated:

Previous wording

For the nine-month period ended September 30, 2024 as compared to the same period in 2023, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $1,838 million increase in shipping operating and carrier costs mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; ii) $326 million increase in cost of sales of goods mainly in Brazil and Mexico, partially offset by a decrease in Argentina; iii) $270 million increase in collection fees, which was mainly attributable to our Brazilian and Mexican operations as a result of the higher growth of total payment volume of Mercado Pago in those countries; and iv) $179 million increase in sales taxes.

Current wording

For the three-month period ended March 31, 2025 as compared to the same period in 2024, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $377 million increase in shipping operating and carrier costs mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent; ii) $176 million increase in cost of sales of goods mainly in Brazil, Mexico and Argentina; iii) $113 million increase in collection fees, which was mainly attributable to our Argentinian, Brazilian and Mexican operations as a result of the higher growth of total payment volume of Mercado Pago in those countries; iv) $89 million increase in sales taxes; v) $68 million increase in other fintech costs mainly related to higher funding costs in connection with our lending business; and vi) $32 million increase in hosting and site operation fees.

Previous wording

Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues and financial income, which are classified as a cost of net revenues and financial expenses. These taxes represented 6.7% and 6.7% of net revenues and financial income for the nine and three-month periods ended September 30, 2024, and 7.5% and 7.1% for the same period in 2023.

Current wording

Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues and financial income, which are classified as a cost of net revenues and financial expenses. These taxes represented 6.7% of net revenues and financial income for the three-month period ended March 31, 2025, and 7.1% for the same period in 2024.