MERCADOLIBRE INC

MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 1. NATURE OF BUSINESS

MercadoLibre, Inc. (“MercadoLibre”, and together with its consolidated entities, the “Company”) was incorporated in the state of Delaware, in the United States of America (“U.S.”), in October 1999. MercadoLibre is the largest online commerce and fintech ecosystem in Latin America. The Company’s ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online and processing payments online and offline, as well as offer a wide array of simple day-to-day financial services.

The Company enables commerce through its marketplace platform, which allows users to buy and sell in most of Latin America. Through Mercado Pago, the fintech platform, MercadoLibre offers a comprehensive set of financial technology services to users of its e-commerce platform, and to users outside of its e-commerce platform. These services include loans and credit cards, yield on funds deposited into accounts, payments, savings, investments, insurtech, crypto buy, hold & sell and processing services for online, in-store and QR payments. Through Mercado Envios, MercadoLibre facilitates the shipping of goods from the Company and sellers to buyers. Mercado Ads facilitates advertising services for sellers and brands to promote their products and services within and outside the Company’s ecosystem. Mercado Shops allows users to set-up, manage, and promote their own online web-stores under a subscription-based business model.

As of December 31, 2025, MercadoLibre, through its wholly-owned subsidiaries, operated online e-commerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre's fintech platform, Mercado Pago, is present in Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying audited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). Investments in entities where the Company holds joint control, but not control, over the investee are accounted for using the equity method of accounting. As of December 31, 2025 and 2024, the Company had no investments where it has the ability to exercise joint control. These audited consolidated financial statements are stated in U.S. dollars, except for where otherwise indicated. Intercompany transactions and balances have been eliminated for consolidation purposes.

Substantially all net revenues and financial income, cost of net revenues and financial expenses and operating expenses, are generated in the Company’s foreign operations. Long-lived assets, intangible assets and goodwill and operating lease right-of-use assets located in the foreign jurisdictions totaled $4,695 million and $2,632 million as of December 31, 2025 and 2024, respectively.

The presentation of certain prior year figures has been modified to conform to the current year presentation. See below section "Change in the presentation of certain financial results and reclassification of 2023 results" for information regarding the change in the presentation of the statements of income.

Variable Interest Entities (VIEs)

A VIE is an entity (i) that has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, (ii) that has equity investors who lack the characteristics of a controlling financial interest or (iii) in which the voting rights of some equity investors are disproportionate to their obligation to absorb losses or their right to receive returns and substantially all of the entity’s activities are conducted on behalf of the equity investors with disproportionately few voting rights. The Company consolidates VIEs of which it is the primary beneficiary. The Company is considered to be the primary beneficiary of a VIE when it has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments and Note 19 – Securitization transactions of these audited consolidated financial statements for further details on the VIEs.

Change in the presentation of certain financial results and reclassification of 2023 results

Change in the presentation of certain financial results

Mercado Pago Fintech platform operations have significantly evolved during the last several years, not only because of the increase in the volume of transactions but also as a result of transitioning from being a non-regulated business to a regulated business, subject to the oversight of central banks and other regulators in the various countries in which the Company operates.

Many of the regulations to which the Company is subject require the Company, among other things, to maintain liquidity reserves to guarantee the funds on users’ account balances in their Mercado Pago digital accounts. Depending on the country, these reserves can be partially or totally invested. During the last several years, these new regulations, coupled with the increase in the volume of transactions, have led the Company to view interest income and other financial gains from investments of these liquidity reserves as part of the Company’s operations.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Furthermore, the evolution of Mercado Pago’s activities themselves has resulted in the Company managing a significant volume of cash, cash equivalents and investments. This is due to an increase in users’ account balances in their Mercado Pago digital account managed by the Company, and an increase in the level of the Company’s indebtedness to finance those operations. As a result, these Mercado Pago’s funds, together with the financing activities, have generated a significant volume of interest income and other financial gains and interest expenses and other financial losses, respectively.

The Company believes that these regulatory trends and related activities will continue and, therefore, with the goal of creating a better measure of the performance of the Company, the Company decided to reclassify and present certain financial results from “Other income (expenses)” to “Net services revenues and financial income” and “Cost of net revenues and financial expenses,” in the statement of income, starting January 1, 2024 and for the 2023 results presented.

The reclassified financial results are related to activities that are needed or mandatory for Mercado Pago’s operations, and consist of:

■interest income derived from investments and cash and cash equivalents, generated as part of the treasury strategy of the fintech business and because of the different regulations that require liquidity reserves, net of sales taxes;

■interest expense and other financing costs generated by the different sources of funding of the fintech activities; and

■gains and losses of derivatives hedging risks related to Mercado Pago’s activities.

Reclassification of 2023 results

According to the Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements, the Company should present in a consistent manner all periods presented within the accompanying audited consolidated financial statements. Therefore, 2023 results have been reclassified for consistency with the current presentation.

This reclassification did not have an impact on previously reported net income, earnings per share, retained earnings or other components of equity or total equity.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The following table, recast for the changes summarized above, presents statement of income line items affected by the revisions and reclassifications of previously reported financial statements, detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Furthermore, the following tables, recast for the changes summarized above, present net revenues per reporting segment (which have been disaggregated by similar products and services), detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements for the year ended December 31, 2023:

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, accounting and disclosures for allowance for doubtful accounts and chargeback provisions, inventories valuation reserves, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of cash and cash equivalents, short-term and long-term investments, impairment of long-lived assets, separation of lease and non lease components for aircraft leases, asset retirement obligation, compensation costs relating to the Company’s long term retention program, fair value of certain loans payable and other financial liabilities, fair value of loans receivable, fair value of derivative instruments, income taxes, contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements. Actual results could differ from those estimates.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less since holding the investment, consisting primarily of money market funds, time deposits and U.S. and foreign government debt securities, to be cash equivalents.

The Company’s Management assesses balances for credit losses included in cash and cash equivalents and restricted cash and cash equivalents, except for those recorded at fair value with impact on the consolidated statements of income, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models. The Company did not recognize any material credit loss on the cash and cash equivalents and restricted cash and cash equivalents for the years ended December 31, 2025, 2024 and 2023.

Time deposits are valued at amortized cost plus accrued interest. Money market funds, U.S. and foreign government debt securities (including Central Bank of Brazil and Central Bank of Uruguay mandatory guarantees) are valued at fair value. See Note 9 – Fair value measurement of assets and liabilities of these audited consolidated financial statements for further details.

Investments

Time deposits and foreign debt securities are valued at amortized cost plus accrued interest.

Corporate debt securities classified as available-for-sale are recorded at fair value. Unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive loss, net of the related tax provisions or benefits.

Investments in equity securities are recorded at fair value, except for those without a readily determinable fair value that are held at cost less impairment.

U.S. and foreign government debt securities are valued at fair value. See Note 9 – Fair value measurement of assets and liabilities of these audited consolidated financial statements for further details.

Investments are classified as current or non-current depending on their maturity dates or when it is expected to be converted into cash, depending on the investment.

The Company’s Management assesses balances for credit losses included in short and long-term investments, except for those recorded at fair value with impact on the consolidated statements of income, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models. The Company did not recognize any material credit loss on the short and long-term investments for the years ended December 31, 2025, 2024 and 2023.

Fair value option applied to certain investments

Under ASC 825, U.S. GAAP provides an option to elect fair value with impact on the statement of income as an alternative measurement for certain financial instruments and other items on the balance sheet.

The Company has elected to measure certain financial assets at fair value with impact on the consolidated statements of income for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in the consolidated statements of income and consolidated statements of comprehensive income and to better reflect the financial model applied for selected instruments. The Company’s election of the fair value option applies to the: i) Foreign government debt securities, and ii) U.S. government debt securities.

Credit card receivables and other means of payments, net

Credit card receivables and other means of payments mainly relate to the Company’s payments solution and arise due to the time taken to clear transactions through payment networks either during the time required to collect the installments (which may be one or more than one installment) or during the period of time until those credit card receivables are sold to financial institutions. Also, the Company has arrangements with some unaffiliated entities under which MercadoLibre users are able to fund their Mercado Pago accounts by depositing an equivalent amount with the unaffiliated entity. In some of these arrangements, MercadoLibre credits the Mercado Pago account before the unaffiliated entity transfers the funds to MercadoLibre to settle the transaction. The amounts pending settlement are recognized in the consolidated balance sheets as credit card receivables and other means of payments.

Credit card receivables and other means of payments are presented net of the related allowance for chargebacks and doubtful accounts.

The Company is exposed to losses due to credit card fraud and other payment misuse. Provisions for these items represent the Company’s estimate of actual losses based on its historical experience, as well as economic conditions.

Loans receivable, net

Loans receivable represent credits granted to certain merchants and consumers through the Company’s own lending solution. Loans are granted with repayment terms ranging from 7 days and 60 months.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Loans receivable are reported at amortized cost, which includes outstanding principal balances plus estimated collectible interest, net of allowance for doubtful accounts. Past due are those loans where customers have failed to make payments in accordance with the contractual terms of their loans. The Company places loans on non-accrual status at 90 days past due. Credit card loans in Mexico are placed on non-accrual status at 60 to 65 days past due and credit card loan in Brazil and Argentina are placed on non-accrual status at 90 to 95 days past due. Interests related to loans on non-accrual status are recognized on cash-basis. There are no loans receivable on non-accrual status for which there is no related allowance for doubtful accounts.

Allowances for doubtful accounts on loans receivable, accounts receivable and credit card receivables and other means of payments

The Company maintains allowances for doubtful accounts for Management’s estimate of current expected credit losses (“CECL”) that may result if customers do not make the required payments.

Measurement of current expected credit losses

The Company estimates its allowance for credit losses as the lifetime expected credit losses of the loans receivable, accounts receivable and credit card receivables and other means of payments. The Company makes use of available information as of each period in which this estimate is developed and uses estimation methods according to the information available and the level of precision needed as certain balances and transactions become more significant over time following the Company’s strategy in connection of the launch and maturing of certain services offerings to its customers.

CECL estimate required a complex and high degree of Management’s judgment. Information provided a wider series of historical data and the lending business showed a growth in related balances and transactions which led Management to continue enhancing the models used to develop this estimate. CECL represents the present value of the uncollectible portion of the principal, interest, late fees, and other allowable balances. The allowance for doubtful accounts is recorded as a charge to provision for doubtful accounts.

Loans receivable

Loans receivable in this portfolio include the products that the Company offers to merchant, consumer, credit card and asset-backed users.

For loans receivable that share similar risk characteristics such as product type, country, unpaid installments, days delinquent and other relevant factors, the Company estimates the lifetime expected credit loss allowance based on a collective assessment. The same methodology is applied for the measurement of CECL for its exposure to off-balance sheet unused agreed loan commitment on credit cards portfolio.

The lifetime expected credit losses is determined by applying probability of default and loss given default models to monthly projected exposures, then discounting these cash flows to present value using the portfolio’s loans interest rate, estimated as a weighted average of the original effective interest rate of all the loans that conform the portfolio segment.

The probability of default is an estimation of the likelihood that a loan receivable will default over a given time horizon. For most of the products, probability of default models (“PD”) are estimated using a survival methodology; these PD are constructed using individual default information through time, taking into account the expected future delinquency rate (forward-looking models) using three probability-weighted macroeconomic scenarios (base, optimistic and pessimistic) following the increased complexity and possible outcomes of the global, regional and domestic macroeconomic performance, so that the models include macroeconomic outlook or projections and recent performance. With this model, the Company estimates marginal monthly default probabilities for each delinquency bucket, type of product and country. Each marginal monthly probability of default represents a different possible scenario of default. However, for new products with limited historical information such as asset backed loans, we estimate PDs using roll rates/transition, until sufficient history is available to migrate to fully empirical approaches.

The exposure at default is equal to the receivables’ expected outstanding principal, interest and other allowable balances. The Company estimates the exposure at default that the portfolio of loans would have in each possible moment of default, meaning for each possible scenario mentioned above. For credit cards loans the Company estimates an amortization pattern based on historical information. Also, for Brazilian credit cards loans the Company uses, as applicable, a one month credit conversion factor (“CCF”) estimated according to terms and conditions, considering the increase in the volume of credit cards portfolio.

The loss given default (“LGD”) is the percentage of the exposure at default that is not recoverable. The LGD is estimated using work-out and Chainladder approaches. This percentage depends on days past due, type of product and country, and is estimated by measuring an average of historical recovery rates from defaulted credits. For asset-backed loans, since there is almost no information to apply either a work-out or Chainladder approach, the Company is using a Basel III-based LGD for credit risk management.

The measurement of CECL is based on probability-weighted scenarios (probability of default for each month), in view of past events, current conditions and adjustments to reflect the reasonable and supportable forecast of future economic conditions. When the Management considers that it is needed, the Company uses an expert credit judgment overlay to reflect factors not captured in the results produced by the CECL model.

The Company writes off loans receivable when the customer balance becomes 360 days past due.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Accounts receivable

To measure the CECL, accounts receivable have been grouped based on shared credit risk characteristics and the number of days past due. The Company has therefore concluded historical loss rates are a reasonable approximation of the expected loss rates for those assets. Accounts receivable are recovered over a period of 0-180 days, therefore, forecasted changes to economic conditions are not expected to have a significant effect on the estimate of the allowance for doubtful accounts.

The Company writes off accounts receivable when the customer balance becomes 180 days past due.

Credit card receivables and other means of payments

Management assesses balances for credit losses included in credit card receivables and other means of payments, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models. The Company did not recognize any material credit loss on the credit card receivables and other means of payments for the years ended December 31, 2025, 2024 and 2023.

Transfer of financial assets

The Company may sell credit card receivables and loans receivable to financial institutions, included within “Credit card receivables and other means of payments, net” and “Loans receivable, net.” These transactions may qualify to be accounted for as a true sale. Accounting guidance on transfer of financial assets establishes that the transferor has surrendered control over transferred assets if and only if all of the following conditions are met: (1) the transferred assets have been isolated from the transferor, (2) each transferee has the right to pledge or exchange the assets it received and (3) the transferor does not maintain effective control over the transferred assets. When all the conditions are met, the Company derecognizes the corresponding financial asset from its consolidated balance sheets. The gain arising from sales of credit card receivables, net of the costs recognized on sale of those credit card receivables, is $1,124 million and $1,246 million, for the years ended December 31, 2025 and 2024, respectively. See Note 5 – Loans receivable, net of these audited consolidated financial statements for further details on the sales of loans receivables.

As of December 31, 2025 and 2024, Accounts payable and accrued expenses include $1,371 million and $898 million, respectively, related to the sale of credit card receivables from Mercado Libre S.R.L. (payment aggregator) of payments transactions processed by Mercado Pago Servicios de Procesamiento S.R.L. (payment acquirer) in Argentina.

Concentration of credit risk

Cash and cash equivalents, restricted cash and cash equivalents, short-term and long-term investments, accounts receivable, credit card receivables and other means of payments and loans receivable are potentially subject to credit risk. However, there are not significant concentrations of credit risk arising from these financial instruments. Cash and cash equivalents, restricted cash and cash equivalents and investments are placed with several financial institutions and financial instruments from different countries that are highly liquid and highly rated. Accounts receivable are derived from revenue earned from customers located internationally and are settled through customer credit cards, debit cards and Mercado Pago accounts, with the majority of accounts receivable collected upon processing of credit card transactions. Due to the relatively small dollar amount of individual accounts receivable and loans receivable, except for asset-backed loans, the Company generally does not require collateral on these balances.

During the years ended December 31, 2025 and 2024, no single customer accounted for more than 5% of net revenues and financial income. As of December 31, 2025 and 2024, no single customer, except for credit card processing companies, accounted for more than 5% of accounts receivable and loans receivable. Credit card receivables and other means of payments, net line of the consolidated balance sheets shows the Company’s credit exposure to not more than 10 entities in each of the countries where the Company offers its payments solution.

USD Coin

USD Coin (“USDC”) is accounted for as a financial instrument measured at fair value; one USDC can be redeemed for one U.S. dollar on demand from the issuer. USDC balance is included in current other assets of the consolidated balance sheets.

Inventories

Inventories, consisting of products and mobile point of sale (“MPOS”) devices available for sale, are accounted for using the weighted average price method, and are valued at the lower of cost or net realizable value.

The Company accounts for an allowance for recoverability of inventories based on Management’s analysis of the inventories, aging, consumption patterns, as well as the lower of cost or net realizable value.

Third-party sellers whose products are stored at the Company’s fulfillment centers, maintain the ownership of their inventories hence these products are not included in Company’s inventories balances.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Property and equipment, net

Property and equipment are recorded at their acquisition cost and depreciated over their estimated useful lives using the straight-line method. Repair and maintenance costs are expensed as incurred.

Costs related to the planning and post implementation phases of website development are recorded as an operating expense. Direct costs incurred in the development phase of website are capitalized and amortized using the straight-line method over an estimated useful life ofthree years. During 2025 and 2024, the Company capitalized $378 million and $292 million, respectively.

Leases

The Company determines if an arrangement is a lease at inception. Leases that grant the Company an option to purchase the underlying asset that the Company is reasonably certain to exercise and leases with a lease term for the major part of the remaining economic life of the underlying asset are classified as finance leases. Right-of-use (“ROU”) assets acquired under finance leases are recorded in “Property and equipment, net.” All other leases are classified as operating leases. Operating leases are included in operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, which is a non-monetary asset, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, which is a monetary liability.

Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company uses incremental borrowing rates and internal rate of return for operating and finance leases, respectively, based on the information available at commencement date in determining the present value of lease payments. The lease ROU asset also includes any lease prepaid payments made. In addition, the Company elected to not separate lease components, except for aircraft for which the Company allocates payments to the lease and other services components based on estimated stand-alone prices. The Company also elected to keep leases with an initial term of 12 months or less off of the balance sheet.

When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that the Company will exercise the option, the Company considers the option in determining the classification and measurement of the lease. The Company’s leases may include variable payments based on measures that include changes in price indices, market interest rates, or the level of sales at a physical store, which are expensed as incurred.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Finance lease ROU assets are amortized on a straight-line basis over the lease term, or over the remaining useful life of the underlying asset if the Company is reasonably certain to exercise the purchase option, when applicable. The interest component of a finance lease is included in “Interest expense and other financial losses” within the consolidated statements of income, and recognized using the effective interest method over the lease term.

The Company establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are amortized over the lease period into Cost of net revenues and financial expenses and operating expenses, and the recorded liabilities are accreted to the future value of the estimated retirement costs.

Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination.

Intangible assets consist of customer lists, trademarks, licenses and others, non-solicitation, non-compete agreements and hubs network acquired in business combinations and valued at fair value at the acquisition date. Intangible assets with finite useful life are amortized over the period of estimated benefit to be generated by those assets and using the straight-line method; their estimated useful lives range from three totwelve years. Trademarks with indefinite useful life are not subject to amortization, but are subject to an annual impairment test, by comparing their carrying amount with their corresponding fair value. For any given intangible asset with indefinite useful life, if its fair value exceeds its carrying amount no impairment loss shall be recognized.

Intangible assets at fair value

The Company accounts for its digital assets, except for the USDC, as indefinite-lived intangible assets, in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets. The Company has ownership of and control over its digital assets and uses third-party custodial services to store its digital assets. The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at fair value with changes recognized in the consolidated statements of income, within the “General and administrative” line item. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Impairment of long-lived assets

The Company reviews long-lived assets for impairments whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The impairment evaluation is performed at the lowest level of identifiable cash flows independent of other assets. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by the asset. If such asset is considered to be impaired on this basis, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of such asset. As of December 31, 2025 there were no events or changes in circumstances that indicate that the carrying value of an asset may not be recoverable.

Impairment of goodwill and intangible assets with indefinite useful life

Goodwill and intangible assets with indefinite useful life are reviewed at the end of the year for impairment or more frequently, if events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level (considering each segment of the Company as a reporting unit) by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of such reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is impaired.

As of December 31, 2025, the Company performed its annual goodwill impairment analysis. The Company’s annual impairment analysis included a qualitative assessment to determine if it is necessary to perform the quantitative impairment test. After performing a qualitative impairment test, the Company concluded that it was more likely than not that the fair value of each reporting unit of the Company exceeds its carrying value. Accordingly, there was no indication of impairment and the quantitative impairment test was not performed.

No impairment loss has been recognized in the years ended December 31, 2025, 2024 and 2023.

Income taxes

The Company is subject to U.S. (federal and state) and foreign income taxes. The Company accounts for income taxes following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities.

A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. In accordance with ASC 740, Management periodically assesses the need to either establish or reverse a valuation allowance for deferred tax assets considering positive and negative objective evidence related to the realization of the deferred tax assets. In its assessment, Management considers, among other factors, the nature, frequency and magnitude of current and cumulative losses on an individual subsidiary basis, projections of future taxable income, the duration of statutory carryforward periods, as well as feasible tax planning strategies, which would be employed by the Company to prevent tax loss carryforwards from expiring unutilized.

Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to global intangible low-taxed income (“GILTI”) as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). The Company selected the period cost method. Accordingly, the Company was not required to record any impact in connection with the potential GILTI tax as of December 31, 2025 and 2024, respectively.

Uncertainty in income taxes

The Company recognizes, if any, uncertainty in income taxes by applying the accounting prescribed by U.S. GAAP, for which a more likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return should be considered. It also provides guidance on derecognition, classification of a liability for unrecognized tax benefits, accounting for interest and penalties, accounting in interim periods and expanded income tax disclosures. The Company classifies interest and penalties within income tax expense, in the consolidated statements of income.

The Company is subject to taxation in the U.S. and various foreign jurisdictions. The material jurisdictions that are subject to examination by tax authorities primarily include the U.S. (for tax year 2022 onwards), Argentina, Brazil and Mexico (for tax year 2020 onwards).

Tax incentives

ICMS tax benefits

eBazar.com.br Ltda., a Brazilian wholly-owned subsidiary of the Company, has ICMS (Imposto sobre Circulação de Mercadorias, Serviços de Transporte Interestadual, Intermunicipal e Comunicação) tax incentives granted by the State of Minas Gerais in the form of tax credits, through a special regime signed with the State by means of a term of agreement, which are aimed at implementing and expanding business in that State. The Company accounted for the tax benefit netting against cost of net revenues and financial expenses for $169 million, $103 million and $69 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Derivative financial instruments

The Company’s operations are in various foreign currencies and consequently are exposed to foreign currency risk. Additionally, the funding of its operations through variable rate financial debt makes the Company exposed to interest rate fluctuation risks. As a consequence, the Company uses derivative instruments to reduce the volatility of earnings and cash flows which were designated as hedges. All outstanding derivatives are recognized in the Company’s consolidated balance sheets at fair value. The designated derivative’s gain or loss in a cash flow hedge is initially reported as a component of accumulated other comprehensive loss and is subsequently reclassified into the consolidated statements of income in the financial statement line item in which the variability of the hedged item is recorded in the period the forecasted transaction affects earnings. The designated derivative’s gain or loss in the net investment hedge is reported as a component of accumulated other comprehensive loss. The gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the same period that the interest expense affects earnings. Cash flows associated with the cash flow and net investment hedges are included in cash flows from investing activities on the consolidated statements of cash flows.

Additionally, the Company uses swap contracts to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt issued by its non-US subsidiaries. The Company designated the swap contracts as fair value hedges. The derivative’s gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial debt due to the hedged risks. Since the terms of the interest rate swaps match the terms of the hedged debt, changes in the fair value of the interest rate swaps are offset by changes in the fair value of the hedged debt attributable to changes in interest rates. Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debt is recorded at the floating rate. Cash flows associated with the fair value hedges are included in cash flows from investing activities on the consolidated statements of cash flows.

The Company also uses future contracts to hedge the interest rate exposure of its asset-backed loan portfolio originated in Brazil. In these cases, where the assets included in the portfolio share the same risk exposure, the Company designated the future contracts as fair value hedges under the portfolio layer method. The derivative’s gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial assets due to the hedged risks. Accordingly, the Company unlocks its portfolio's fixed rate to mitigate the effect of interest rate fluctuations. Cash flows associated with the fair value hedges are included in cash flows from investing activities on the consolidated statements of cash flows.

Finally, the Company also hedges its economic exposure to foreign currency risk related to foreign currency denominated monetary assets and liabilities with foreign derivative currency contracts and interest rate fluctuation with swap contracts which were not designated as hedges. Accordingly, these outstanding non-designated derivatives are recognized in the Company’s consolidated balance sheets at fair value, and changes in fair value from these contracts are recorded in other income (expense), net in the consolidated statements of income.

Funds payable to customers

Funds payable to customers relate to the Company’s digital account and are originated by the amounts due to users held by the Company. Funds, net of amounts due to the Company by the user when applicable, are maintained in the user’s current account until withdrawal is requested by the user.

Amounts payable due to credit and debit card transactions

Amounts payable due to credit and debit card transactions are originated by purchase transactions carried out by the Company’s customers with debit and credit cards issued by the Company.

Provision for buyer protection program

The buyer protection program (“BPP”) is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance for all transactions completed through the Company’s online payment solution Mercado Pago (except for certain excluded categories). The Company’s BPP provides protection to consumers by reimbursing them for the total value of a purchased item and the value of any shipping service paid if it does not arrive, arrives incomplete or damaged, does not match the seller’s description or if the buyer regrets the purchase. The Company is entitled to recover from the third-party carrier companies performing the shipping service certain amounts paid under the BPP. Furthermore, in some specific circumstances, the Company enters into insurance contracts with third-party insurance companies in order to cover contingencies that may arise from the BPP. Provisions for BPP represent the Company’s estimate of probable losses based on its historical experience. The charge for the provision for BPP is recognized in sales and marketing expense line of the consolidated statements of income. See Note 14 – Commitments and Contingencies of these audited consolidated financial statements for further details.

Share-based payments

The liability related to the variable portion of the long term retention programs is remeasured at fair value. See Note 15 – Long term retention program of these audited consolidated financial statements for more details.

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Meli Dólar liability

Meli Dólar is a stablecoin issued by the Company that is pegged to the U.S. dollar. Members of the Company’s loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without any fees. The Company has elected to measure the liability related to the Meli Dólar program, which corresponds to the holding by third-parties of the Company’s stablecoin, at fair value.

Treasury stock

Equity instruments of the Company that are repurchased by the Company are recognized at cost and deducted from equity. If the repurchase of the Company’s stock is carried out at a price significantly in excess of the current market price, there is a presumption that the repurchase price includes amounts attributable to items other than the stock repurchased; therefore, the Company uses the quoted market price of the common stock for purposes of determining the fair value of the treasury stock.

Comprehensive income

Comprehensive income is comprised of two components, net income and other comprehensive income (loss). This last component is defined as all other changes in the equity of the Company that result from transactions other than with shareholders. Other comprehensive income (loss) includes the cumulative adjustment relating to the translation of the financial statements of the Company’s foreign subsidiaries, unrealized gains and losses on investments classified as available-for-sale and hedging activities; and the related tax effects. Total comprehensive income for the years ended December 31, 2025, 2024 and 2023 amounted to $2,397 million, $1,281 million and $1,161 million, respectively.

Foreign currency translation

All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Argentina, which has used the U.S. dollar as its functional currency since July 1, 2018. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from their local currencies into U.S. dollars by using year-end exchange rates while income and expense accounts are translated at the average monthly rates in effect during the year, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income. Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. Net foreign currency transaction results are included in the consolidated statements of income under the caption “Foreign currency losses, net.”

Argentine currency status and macroeconomic outlook

As of July 1, 2018, the Company transitioned its Argentine operations to highly inflationary status in accordance with U.S. GAAP, and changed the functional currency for Argentine subsidiaries from Argentine Pesos to U.S. dollars, which is the functional currency of their immediate parent company. Argentina’s annual inflation rate for the years ended December 31, 2025, 2024 and 2023 was 31.5%, 117.8% and 211.4%, respectively.

The Company uses Argentina’s official exchange rate to account for transactions in the 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. The average exchange rate for the years ended December 31, 2025, 2024 and 2023 was 1,244.51, 916.11 and 296.59, respectively, resulting in an increase of 35.8% and 208.9% for the years ended December 31, 2025 and 2024.

Argentine exchange regulations

In the second half of 2019, the Argentine government instituted exchange controls restricting the ability of companies and individuals to exchange Argentine Pesos for foreign currencies and their ability to remit foreign currency out of Argentina. An entity’s authorization request to the Central Bank of Argentina (“CBA”) to access the official exchange market to make foreign currency payments may be denied depending on the circumstances. As a result of these exchange controls, markets in Argentina developed trading mechanisms, in which an entity or individual buys U.S. dollar denominated securities in Argentina (i.e. shares, sovereign debt) using Argentine Pesos, and subsequently sells the securities for U.S. dollars, in Argentina, to access U.S. dollars locally, or outside Argentina, by transferring the securities abroad, prior to being sold (the latter commonly known as “Blue Chip Swap Rate”). The Blue Chip Swap Rate diverged from Argentina’s official exchange rate (commonly known as the exchange spread). As of December 31, 2024, the spread of the Blue Chip Swap was 14.7%.

On April 11, 2025, the Argentine government announced a series of measures aimed at easing regulations related to access to the foreign exchange market. Among other modifications, these measures included the establishment of floating bands (which started between $1,000 and $1,400 Argentine Pesos, a range that was updated at a rate of 1% per month until December 2025) within which the dollar exchange rate in the foreign exchange market may fluctuate, the elimination of foreign exchange restrictions applicable to individuals, the ability of companies to transfer dividends abroad to non-resident shareholders related to fiscal years beginning on or after January 1, 2025 and provide greater flexibility to make payments abroad for imports of goods and services. Effective January 1, 2026, the floating bands are updated monthly in accordance with the most recently published monthly inflation rate.

On September 26, 2025, the CBA imposed a restriction that prohibits purchasing securities on the Argentina Stock Market that are to be settled in foreign currency for a period of 90 days following the purchase of foreign currency in the official exchange market. As of December 31, 2025, the spread between the official exchange rate and the Blue Chip Swap Rate was 4.6%.

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Revenue recognition

Revenues are recognized when control of the promised services or goods is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for them.

Contracts with customers may include promises to transfer multiple services including discounts on current or future services. Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require judgment.

Revenues are recognized when each performance obligation is satisfied by transferring the promised good or service to the customer according to the following criteria described for each type of service:

Commerce transactions

■Revenues from intermediation services derived from final value fees and flat fees paid by sellers. Revenues related to final value fees and flat fees are recognized at the time that the transaction is successfully concluded (which occurs when the marketplace transaction is confirmed right after processing the payment).

■Revenues from shipping services are generated when an item is delivered through our shipping service. When the Company acts as an agent, revenues derived from the shipping services are recognized at the time the transaction is successfully concluded for third-party sales, and presented net of the transportation costs charged by third-party carriers. When the Company acts as principal, revenues derived from the shipping services are recognized upon delivery of the good to the customer, and presented on a gross basis. As part of the Company’s business strategy, shipping costs may be fully or partially subsidized at the Company’s option. In addition, the Company generates storage fees, which are charged to sellers for utilizing the Company’s fulfillment facilities, and are recognized over time.

■Revenues from inventories sales are generated when control of the good is transferred to the Company’s customers, which occurs upon delivery to the customer.

■Revenues from advertising services provided to sellers, vendors, brands and others, through different products (Product Ads, Brand Ads, Display Ads and Video Ads) and display formats, are recognized based on the number of clicks and impressions, respectively.

■Classified advertising services are recorded as revenue ratably during the listing period. Those fees are charged at the time the listing is uploaded onto the Company’s platform and are not subject to successful sale of the items listed.

■Revenues from subscription services include fees associated with MELI+ memberships and third party digital content subscriptions, and are presented net of content providers costs. Subscriptions are paid for at the time of or in advance of delivering the services. Revenue from such arrangements is recognized over the subscription period.

Fintech transactions

■Revenues from commissions the Company charges for transactions off-platform derived from the use of the Company’s payments solution or Mercado Pago, credit and debit cards, revenues derived from insurtech transactions and revenues from commissions the Company charges for its asset management product are recognized once the transaction is considered completed, when the payment is processed by the Company, net of rebates granted. As of December 31, 2025, the assets under administration of the Company related to mutual funds amount to $4,536 million. The Company also earns revenues as a result of offering installments to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets to financial institutions. When the Company finances the transactions directly, the financing component is separated from the revenue amount and is recognized over the financing period using the interest method. When the Company sells the corresponding financial assets to financial institutions, the result of such sale is accounted for as financing revenues net of financing costs at the time of transfer of the financial assets.

■Revenues from sale of mobile point of sale products are recognized when control of the good is transferred, which occurs upon delivery to the customer.

■Revenues from interest earned on loans granted to merchants and consumers, and credit card transactions are recognized over the period of the loan and are based on effective interest rates. The Company places loans on non-accrual status at 90 days past due. Credit card loans in Mexico are placed on non-accrual status at 60 to 65 days past due and credit card loan in Brazil and Argentina are placed on non-accrual status at 90 to 95 days past due.

■Interest earned on cash and investments as part of Mercado Pago activities, net of interest gains pass through our Brazilian users in connection with our asset management product, are recognized over the period of the investment and are based on effective interest rates or changes in its fair value, depending on the valuation technique of the investment (please refer to sections "Cash and cash equivalents" and "Investments" for further details).

When more than one service is included in one single arrangement with the same customer, the Company recognizes revenue according to multiple element arrangements accounting, segregating the significant financing components, if any, distinguishing between each of the services provided, and allocating revenues based on their respective estimated selling prices.

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Revenues recognized under ASC 606 “Revenue from contracts with customers” amounted to $20,335 million, $15,137 million and $10,487 million for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues not recognized under ASC 606 amounted to $8,558 million, $5,640 million and $4,620 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Contract balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Receivables represent amounts invoiced and revenue recognized prior to invoicing when the Company has satisfied the performance obligation and has the unconditional right to payment. Accounts receivable and credit card receivables and other means of payments are presented net of allowance for doubtful accounts and chargebacks of $63 million and $42 million as of December 31, 2025 and 2024, respectively. See Note 5 – Loans receivable, net of these audited consolidated financial statements for information related to the allowance for doubtful accounts with respect to the Company’s loans receivable.

Contract liabilities from contracts with customers consist of fees received related to unsatisfied performance obligations at the end of the year in accordance with ASC 606. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following months. Contract liabilities from contracts with customers as of December 31, 2024 was $77 million, of which substantially all was recognized as revenue during the year ended December 31, 2025.

As of December 31, 2025, total contract liabilities from contracts with customers recognized within current other liabilities was $133 million, mainly due to fees related to classified advertising services billed, subscriptions, shipping services and inventory sales that are expected to be recognized as revenue in the coming months.

Sales tax

The Company’s subsidiaries in Brazil, Argentina and Colombia are subject to certain sales taxes which are classified as cost of net revenues and financial expenses and totaled $1,785 million, $1,367 million and $1,165 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Brazilian Tax Reform - Consumption taxation

In December 2023 the Brazilian National Congress approved a tax reform that will change the consumption taxation (goods and services), replacing ICMS (State tax) and ISS (Municipal tax) by IBS (Goods and Services Tax) and PIS/COFINS (Federal taxes) by CBS (Goods and Services Federal Tax). Overall, IBS and CBS will have a single flat rate, around 28% according to preliminary estimates, full non-cumulative system (taxpayer full entitlement to recover taxes paid in the previous transactions), and a 7-year transition, starting in 2026. Also, this change will simplify Brazilian tax legislation, which is expected to reduce tax litigation between taxpayers and the government.

In this regard, in January 2025, the first part of the regulation for the tax reform on consumption was approved. The text contains rules for the implementation of the CBS and IBS. For the CBS, the transition will be faster, starting in 2026 and ending in 2027. In contrast, the transition for the IBS will occur starting in 2029, with an end date in 2033.

Starting 2026, there will be a change in the fiscal documents requiring the inclusion of the CBS and the IBS, both with nominal rates of 0.9% and 0.1%, respectively. This inclusion will be strictly for informational purposes, meaning it will have no impact on tax payments.

Advertising costs

The Company expenses the costs of advertisements in the period during which the advertising space or airtime is used as sales and marketing expense. Internet advertising expenses are recognized based on the terms of the individual agreements, which is generally over the greater of the ratio of the number of clicks delivered over the total number of contracted clicks, on a pay-per-click basis, or on a straight-line basis over the term of the contract. Advertising costs for the years ended December 31, 2025, 2024 and 2023 amounted to $1,690 million, $1,053 million and $787 million, respectively.

Earnings per share

Basic earnings per share for the Company’s common stock is computed by dividing net income for the year by the weighted average number of common shares outstanding during the year. Basic and Diluted earnings per share figures have been calculated using non-rounded amounts.

In August 2018, the Company issued an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (“2028 Notes”) which were fully converted or redeemed in November 2023. The conversion of these notes was included in the calculation for diluted earnings per share utilizing the “if converted” method for the year ending December 31, 2023 and was added an adjustment for assumed conversions of 744,558 shares. The denominator for diluted net income per share for the year ended December 31, 2023 did not include any effect from the capped call transactions entered into by the Company with certain financial institutions with respect to shares of the Company’s common stock, which were settled on September 1, 2023, because it would be antidilutive.

For the year ended December 31, 2025, the weighted average of outstanding common shares for the diluted earnings per share includes the effect of 21 incremental shares of the Company's common stock issuable upon vesting of restricted stock units ("RSUs") granted to non-employee directors.

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Recently Adopted Accounting Standards

On December 14, 2023, the FASB issued the Accounting Standard Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this update provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information, requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The other amendments in this update improve the effectiveness and comparability of disclosures by adding disclosures of pretax income (or loss) and income tax expense (or benefit) and removing disclosures that no longer are considered cost beneficial or relevant. The amendments are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The guidance should be applied on a prospective basis while retrospective application is permitted. The Company adopted this guidance, applying the retrospective approach in the fourth quarter of 2025. Please refer to Note 13 – Income taxes of these audited consolidated financial statements for additional information.

Accounting Pronouncements Not Yet Adopted

On November 4, 2024, the FASB issued the ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The amendments in this update improve financial reporting by requiring disclosure of additional information about certain costs and expenses in the notes to financial statements at interim and annual reporting, such as the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption; a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027 (as clarified by ASU 2025-01). Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its consolidated financial statements.

On July 30, 2025, the FASB issued the ASU 2025-05 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” The amendments in this update provide entities with a practical expedient when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The practical expedient, if elected, should be applied prospectively. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

On September 18, 2025, the FASB issued the ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The amendments in this update remove all references to software development methods (prescriptive and sequential software development stages (referred to as “project stages”)) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The amendment specifies that the property, plant and equipment disclosure requirements under ASC 360-10 apply to all capitalized software costs accounted for under ASC 350-40, regardless of how the costs are presented in the financial statements. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments can be applied on a prospective transition approach, a modified transition approach (based on the status of the project and whether software costs were capitalized before the date of adoption), or a retrospective transition approach. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its consolidated financial statements.

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NOTE 3. CASH, CASH EQUIVALENTS, RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS

The composition of cash, cash equivalents and restricted cash and cash equivalents is as follows:

(1) Cash and cash equivalents from securitization transactions are restricted to the payment of amounts due to third-party investors.

(2) Cash, cash equivalents, restricted cash and cash equivalents as reported in the consolidated statements of cash flows.

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The composition of short-term and long-term investments is as follows:

(1)As of December 31, 2025 and 2024, includes $786 million and $3,370 million considered restricted due to Central Bank of Brazil mandatory guarantee, respectively. Also, as of December 31, 2024 includes $5 million, considered restricted, that guarantees a line of credit. As of December 31, 2025 and 2024, includes $9 million and $17 million considered restricted due to the Central Bank of Uruguay’s mandatory guarantee.

(2) As of December 31, 2025 and 2024, includes $74 million and $42 million of collateral as part of credit card scheme arrangement rules in Brazil, and is considered restricted. As of December 31, 2025 and 2024, the time deposits in excess of $100 thousand, are in majority foreign deposits.

(3) Includes investments held by a consolidated VIE, in which the Company has determined that it has both the power to direct the activities that most significantly impact the VIE’s performance and the obligation to absorb losses or the right to receive benefits. As of December 31, 2025 and 2024, includes $473 million and $337 million of foreign government debt securities, respectively. Also, as of December 31, 2024, includes $1 million of corporate debt securities.

(4) As of December 31, 2025 and 2024, includes $8 million and $2 million, respectively, considered restricted due to Brazilian stock market mandatory guarantee to operate with futures contracts. Also, as of December 31, 2025, includes $9 million considered restricted, that guarantees lines of credit.

(5) Investments from securitization transactions are restricted to the payment of amounts due to third-party investors.

(6)Corresponds to debt securities nominated in Brazilian reais issued by the Instituto de Crédito Oficial of Spain guaranteed by the Spanish government, considered restricted, that guarantees a line of credit.

NOTE 4. BALANCE SHEET COMPONENTS

Accounts receivable, net

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The following table summarizes the allowance for doubtful accounts activity during the years ended December 31, 2025, 2024 and 2023:

Credit card receivables and other means of payments, net

As of December 31, 2025 and 2024, the components of current and non-current Credit card receivables and other means of payments, net were as follows:

The following tables summarize the allowance for chargebacks activity during the years ended December 31, 2025, 2024 and 2023:

Other assets

(*) Includes restricted USDC holdings (held for Meli Dólar holders) of $3 million as of December 31, 2025.

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Property and equipment, net

(1) Estimated useful life attributable to “building.”

Depreciation

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Other liabilities

Foreign currency translation

Supplier finance programs

The Company and certain financial institutions participate in a supplier finance program (“SFP”) that enables certain of the Company’s suppliers, at their own election, to request the payment of their invoices to the financial institutions earlier than the terms stated in the Company’s payment policies. Suppliers’ voluntary inclusion of invoices in the SFP does not change the Company’s payment terms, the amounts paid or liquidity. The supplier invoices that have been confirmed as valid under the program require payment in full according to the terms established in the Company’s payment policies (a range mainly between 60 and 90 days from the invoicing date). There are no assets pledged as security or other forms of guarantees provided for the committed payment to the financial institution. The Company has no economic interest in a supplier’s decision to participate in the SFP and has no financial impact in connection with the SFP. As of December 31, 2025 and 2024, the obligations outstanding that the Company has confirmed as valid to the financial institutions amounted to $616 million and $425 million, respectively, and are included in the consolidated balance sheets within accounts payable and accrued expenses line.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The rollforward of the Company’s outstanding obligations confirmed as valid under its supplier finance program for the year ended December 31, 2025 and 2024 is as follows:

NOTE 5. LOANS RECEIVABLE, NET

The Company classifies loans receivable as “Merchant”, “Consumer”, “Credit cards” and “Asset-backed.” As of December 31, 2025 and 2024, Loans receivable, net were as follows:

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The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $3,179 million and $1,708 million as of December 31, 2025 and 2024, respectively, which includes $36 million and $30 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the consolidated balance sheets as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the Company is exposed to off-balance sheet unused agreed loan commitment on credit cards portfolio which expose the Company to credit risks for $9,001 million and $2,872 million, respectively. For the years ended December 31, 2025, 2024 and 2023 the Company recognized in Provision for doubtful accounts $3 million, $18 million and $8 million as expected credit losses, respectively.

From time to time, the Company sells loans receivable related to its lending solution. In this regard, during 2024, the Company signed a contract with a third party to sell an amount up to $100 million of its loans receivable, as part of its funding strategy. These loans were originated by its Mexican subsidiary and provided to its local users. This transaction is accounted for as a true sale and the Company has a continuing involvement related to a servicing fee charged to the purchaser for collection services and regarding a beneficial interest retained by the Company over the transferred assets. Such involvements did not preclude the fact that this operation qualified as a true sale because the purchaser had full control over the transferred assets. As of December 31, 2024, the Company sold$44 million of loans receivable and during 2025, the Company completed the sale of the total amount aforementioned. Finally, the Company recognized a gain of$1 million for each of the years ended December 31, 2025 and 2024, related to the mentioned sale of loans receivable.

Additionally, during 2025, the Company signed a contract to sell loans receivable related to its lending solution in Argentina with certain local financial institution for an amount up to $100 million, as part of its funding strategy. This transaction is accounted for as a true sale and the Company does not retain any continuing involvement. As of December 31, 2025, the Company sold $5 million of loans receivable and recorded a gain of $1 million regarding this sale.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The following tables summarize the allowance for doubtful accounts activity during the years ended December 31, 2025, 2024 and 2023:

The Company closely monitors credit quality for all loans receivable on a recurring basis to assess and manage its exposure to credit risk. To assess merchants and consumers seeking a loan under the lending solution, the Company uses, among other indicators, risk models internally developed, as a credit quality indicator to help predict the merchant’s and consumer’s ability to repay the principal balance and interest related to the credit. The risk model uses multiple variables as predictors of the merchant’s and consumer’s ability to repay the credit, including external and internal indicators. Internal indicators consider user behavior related to credit/payment history, and with lower weight in the risk models, the Company uses number of transactions in the Company’s ecosystem and merchant’s annual sales volume, among other indicators. In addition, the Company considers external bureau information to enhance the model and the decision making process.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The amortized cost of the loans receivable classified by the Company’s credit quality internal indicator was as follows:

For non-accrual policy, please refer to Note 2 – Summary of significant accounting policies - Loans receivable, net.

As of December 31, 2025 and 2024, renegotiations represented 1.6% and 1.4% of the loans receivable portfolio, respectively.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 6. GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets

The composition of goodwill and intangible assets is as follows:

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 are as follows:

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Intangible assets with finite useful life

Intangible assets with finite useful life are comprised of naming rights, customer lists, non-compete and non-solicitation agreements, hubs network, acquired software licenses and other acquired intangible assets including developed technologies and trademarks. Aggregate amortization expense for intangible assets totaled$9 million, $5 million and $6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The following table summarizes the remaining amortization of intangible assets with finite useful life as of December 31, 2025:

NOTE 7. INTANGIBLE ASSETS AT FAIR VALUE

The Company did not hold any digital assets at fair value as of December 31, 2025. The following table presents the digital assets name, cost basis, fair value, and number of units for each significant digital asset holding as of December 31, 2024:

(1) Cost basis of the digital assets is net of $21 millionof impairment losses recognized prior to the adoption of ASU 2023-08. The method used by the Company for determining the cost basis of its digital assets was the weighted average price method.

The following table summarizes the digital assets rollforward activity during the years ended December 31, 2025 and 2024:

NOTE 8. SEGMENTS

The Company manages the business country-by-country to understand and focus on the specific needs and opportunities in those markets. The Company’s chief executive officer is responsible for allocating resources and assessing performance and is therefore its chief operating decision maker (“CODM”). The Company’s segments include Brazil, Mexico, Argentina and other countries (which includes Bermuda, Chile, China, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.).

The CODM evaluates the performance of the Company’s operating segments based on their direct contribution. The CODM uses the direct contribution by segment to help with decision-making since it considers all business lines within a country as a whole, taking into account the synergies between the different lines in each of the countries’ integrated digital ecosystems.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Direct contribution consists of net revenues and financial income from external customers less segment costs, which include expenses, such as shipping operation costs (including warehousing costs), carrier and other operating costs, provision for doubtful accounts, cost of goods sold, collection fees, funding cost, salaries and wages, marketing expenses and hosting expenses. All corporate related costs have been excluded from the segment’s direct contribution.

The following tables summarize the financial performance of the Company’s reporting segments:

108 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.

The following tables summarize net revenues and financial income per reporting segment, which have been disaggregated by similar products and services for the years ended December 31, 2025, 2024 and 2023:

109 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

(1)Includes final value fees and flat fees paid by sellers derived from intermediation services and related shipping and storage fees, classified fees derived from classified advertising services, ad sales and membership subscription fees.

(2)Includes revenues from inventory sales and related shipping fees.

(3)Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution and asset management product, revenues as a result of offering installments for the payment to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets, interest earned on cash and investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains pass through our Brazilian users in connection with our asset management product, Mercado Pago debit card commissions and insurtech fees.

(4)Includes interest earned on loans and advances granted to merchants and consumers, and interest and commissions earned on Mercado Pago credit card transactions.

(5)Includes sales of mobile point of sales devices.

(6)Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of 2023 results to our audited consolidated financial statements for further details.

(7) Revenues from external customers in the U.S. amounted to $51 million and $35 million for the years ended December 31, 2025 and 2024. There wereno revenues from external customers in the U.S. for the year ended December 31, 2023.

The following tables summarize the allocation of the property and equipment based on geography:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The following tables summarize the allocation of the operating lease right-of-use assets based on geography:

The following tables summarize the allocation of the goodwill and intangible assets based on geography:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 9. FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES

Assets and liabilities measured and recorded at fair value on a recurring basis

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:

(1)Measured at fair value with impact on the consolidated statements of income for the application of the fair value option. (See Note 2 – Summary of significant accounting policies – Fair value option applied to certain investments and Meli Dólar liability.)

(2) As of December 31, 2025 and 2024 includes $206 million and $283 million, respectively, of money market funds from securitization transactions. (See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)

(3) As of December 31, 2025 and 2024 includes $8 million and $12 million, respectively, of investments from securitization transactions. (See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)

112 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

The Company’s assets and liabilities measured and recorded at fair value on a recurring basis were valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets); ii) Level 2 inputs: obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date; and iii) Level 3 inputs: valuations based on unobservable inputs reflecting Company’s assumptions. The unobservable inputs of the fair value of contingent considerations classified as Level 3 refer to the amounts to be paid according to the agreement of an acquisition, the likelihood of achievement of the targets included in that arrangement (expected to be 100%), and the Company’s historical experience with similar arrangements. Reasonable variation on those unobservable inputs would not significantly change the fair value of those instruments. As of December 31, 2025 and 2024, the Company had not changed the methodology nor the assumptions used to estimate the fair value of the financial instruments.

There were no transfers to and from Levels 1, 2 and 3 during the years ended December 31, 2025 and 2024.

The Company’s election of the fair value option applies to: i) foreign government debt securities, ii) U.S. government debt securities and iii) Meli Dólar liability. The Company recognized fair value changes of foreign and U.S. government debt securities, which include the related interest income of those instruments, in net service revenues and financial income if it is related to Mercado Pago’s operations or in interest income and other financial gains if not. Such fair value changes and interest income amount to gains of $450 million and $329 million in net service revenues and financial income, and $83 million and $57 million in interest income and other financial gains for the years ended December 31, 2025 and 2024, respectively. The Meli Dólar liability has not presented changes in its fair value for the years ended December 31, 2025 and 2024.

As of December 31, 2025 and 2024, the amortized cost of the Company’s investment in corporate debt securities classified as available for sale amounted to $392 million and $259 million, respectively, and the estimated fair value amounted to $399 million and $262 million, respectively. The amortized cost of these securities is determined under a specific identification basis. As of December 31, 2025 and 2024, the gross unrealized gains accumulated in the consolidated statements of comprehensive income amounted to $7 million and $3 million, respectively. For the year ended December 31, 2025 and 2024, the proceeds from sales of corporate debt securities amounted to $57 million and $26 million, respectively.

The following table summarizes the net carrying amount of the corporate debt securities classified as available for sale, classified by its contractual maturities:

The following table summarizes the net carrying amount of the debt securities at fair value not classified as available for sale (U.S. and foreign government debt securities), classified by its contractual maturities or Management’s expectation to convert the investments into cash:

113 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

Financial assets and liabilities not measured and recorded at fair value

The following table summarizes the estimated fair value level of the financial assets and liabilities of the Company not measured at fair value as of December 31, 2025 and 2024:

(1) As of December 31, 2025 and 2024 includes $55 million and $38 million of cash in banks, and $126 million and $171 million of time deposits from securitization transactions, respectively. (See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)

As of December 31, 2025, the carrying value of the Company’s investment in foreign debt securities held to maturity amounted to $146 million and its contractual maturity is less than a year.

As of December 31, 2025 and 2024, the carrying value of the Company’s financial assets with determinable fair value (except for loans receivable) not measured at fair value approximated their fair value mainly because of their short-term maturity. If these financial assets were measured at fair value in the financial statements, cash and restricted cash would be classified as Level 1 (where cost and fair value are aligned), foreign debt securities held to maturity would be classified as Level 3 and the remaining financial assets would be classified as Level 2. The estimated fair value of the loans receivable would be classified as Level 3 based on the Company’s assumptions.

As of December 31, 2025 and 2024, the carrying value of the Company’s financial liabilities (except for the 3.125% Notes due 2031, the 4.900% Notes due 2033, and the 2.375% Sustainability Senior Notes Due 2026 as of December 31, 2024) not measured at fair value approximated their fair value mainly because of their short-term maturity or because the effective interest rates are not materially different from market interest rates. If these financial liabilities were measured at fair value in the financial statements, these would be classified as Level 2. As of December 31, 2025 and 2024, the estimated fair value of the 3.125% Notes due 2031 would be $501 million and $475 million, respectively, as of December 31, 2025 the estimated fair value of the 4.900% Notes due 2033 would be $726 million, and as of December 31, 2024, the estimated fair value of the 2026 Notes would have been $$351 million, which are based on Level 2 inputs.

NOTE 10. COMMON STOCK

Authorized, issued and outstanding shares

As of December 31, 2025 and 2024, as stated in the Company’s Fourth Amended and Restated Certificate of Incorporation, the Company has authorized 110,000,000 shares of Common Stock, par value $0.001 per share (“Common Stock”).

As of December 31, 2025 and 2024, there were 50,697,182 and 50,697,375 shares of common stock issued and outstanding with a par value of $0.001 per share.

114 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

Voting rights

Each outstanding share of common stock, is entitled toone vote on all matters submitted to a vote of holders of common stock, except for stockholders that beneficially own more than 20% of the shares of the outstanding common stock, in which case the board of directors (the “Board”) may declare that any shares of stock above such 20% do not have voting rights. The holders of common stock do not have cumulative voting rights in the election of directors.

NOTE 11. REDEEMABLE CONVERTIBLE PREFERRED STOCK

Pursuant to the Fourth Amended and Restated Certificate of Incorporation, the Company is authorized to issue 40,000,000 shares of preferred stock, par value $0.001 per share. As of December 31, 2025, and 2024 the Company hasno preferred stock subscribed or issued.

NOTE 12. EQUITY COMPENSATION PLAN

On June 10, 2019, at the Annual Shareholders’ Meeting, the Company’s shareholders approved the adoption of the Amended and Restated 2009 Equity Compensation Plan (the “Amended and Restated 2009 Plan”), which contains terms substantially similar to the terms of the “2009 Equity Compensation Plan” (the “2009 Plan”) that expired in 2019. As of December 31, 2025, there are 988,833 shares of common stock available for granting under the Amended and Restated 2009 Plan.

Equity compensation awards granted under the Amended and Restated 2009 Plan are at the discretion of the Company’s board of directors and may be in the form of either incentive or non-qualified stock options, restricted stock, or other forms of equity awards, including RSUs. As of December 31, 2025, there were 2,750 shares of unvested restricted stock and 192 RSUs outstanding under such plan.

NOTE 13. INCOME TAXES

The components of income tax for the years ended December 31, 2025, 2024 and 2023 are as follows:

The components of net income before tax expense and equity in earnings of unconsolidated entity for the years ended December 31, 2025, 2024 and 2023 are as follows:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The components of income tax cash paid for the years ended December 31, 2025, 2024 and 2023 are as follows:

116 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

The following is a reconciliation of the difference between the actual charge for income tax and the expected income tax expense computed by applying the statutory income tax rate for the years ended December 31, 2025, 2024 and 2023 to net income before income tax:

Income taxes are determined by each subsidiary on a standalone basis according to income tax law of each jurisdiction. The Company’s consolidated effective tax rate for year ended December 31, 2025 as compared to 2024, increased from 21.4% to 29.7% largely as a result of lower deductions related to tax inflation adjustments in Argentina.

117 | MercadoLibre, Inc.

MercadoLibre, Inc. Notes to Consolidated Financial Statements

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respe ctive tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse. The following table summarizes the composition of deferred tax assets and liabilities for the years ended December 31, 2025 and 2024:

Valuation allowance on deferred tax assets

The following table summarizes the tax valuation allowance activity during the years ended December 31, 2025, 2024 and 2023:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

As of December 31, 2025, consolidated deferred tax asset on tax loss carryforwards for income tax purposes were$184 million. If not utilized, tax loss carryforwards will begin to expire as follows:

Based on Management’s assessment of available objective evidence, the Company maintained a valuation allowance on deferred tax assets of $764 million and $584 million as of December 31, 2025 and 2024, respectively. This valuation allowance includes $699 million and $528 million to fully reserve the outstanding U.S. foreign tax credits as of December 31, 2025 and 2024, respectively.

The valuation allowance increased as of December 31, 2025 compared to 2024, mainly related to the impairment of $171 million on U.S. foreign tax credit.

Knowledge-based economy promotional regime in Argentina

The Company recorded an income tax benefit related to the Knowledge-based economy promotional regime in Argentina (the “Regime”) of $64 million,$33 million and$42 million, during the years ended December 31, 2025, 2024 and 2023, respectively. The aggregate per share effect of the income tax benefit amounted to $1.26,$0.65 and$0.84 for the years ended December 31, 2025, 2024 and 2023, respectively. In addition, the Company recorded a social security benefit related to the Regime of $17 million,$24 million and$67 million for the years ended December 31, 2025, 2024 and 2023, respectively. Such promotional Regime is effective until December 31, 2029.

Brazilian Tax Reform - Income tax

In November 2025 the Brazilian National Congress approved Law N° 15,270/25, establishing a 10% withholding income tax over dividends and capitalized earnings for foreign shareholders. The 10% withholding tax will be applicable for earnings generated from January 1, 2026 onwards.

In addition, in December 2025 the Brazilian National Congress approved Complementary Law N° 224/2025, which increased the Social Contribution on Net Income (“CSLL”) tax rate from 9% to 12% effective April 1, 2026, and from 12% to 15% effective January 1, 2028, applicable to payment institutions, and from 15% to 17.5% effective April 1, 2026, and from 17.5% to 20% effective January 1, 2028, applicable to financial institutions. As a result, the Company recognized an increase in its deferred tax assets of $27 million for the year ended December 31, 2025.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA permanently establishes key elements of the Tax Cuts and Jobs Act, and also introduces modifications to certain international tax provisions. These provisions have various effective dates, some of which extend into 2027. The Company has completed its assessment and has determined that the OBBBA will not have a material impact on the Company’s consolidated financial statements.

NOTE 14. COMMITMENTS AND CONTINGENCIES

Litigation and Other Legal Matters

The Company is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it considers that future costs will probably be incurred and such costs can be reasonably estimated. Proceeding-related liabilities are based on developments to date and historical information related to actions filed against the Company. As of December 31, 2025, the Company had accounted for estimated liabilities involving proceeding-related contingencies and other estimated contingencies of$129 million (net of judicial deposits) within non current other liabilities to cover legal actions against the Company for which its Management has assessed the likelihood of a final adverse outcome as probable. Expected legal costs related to litigations are accrued when the legal service is actually provided.

In addition, as of December 31, 2025, the Company and its subsidiaries are subject to certain legal actions considered by the Company's Management and its legal counsels to be reasonably possible of resulting in a loss for an aggregate amount up to $449 million. No loss amounts have been accrued for such reasonably possible legal actions, the most significant of which are described below.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The following table summarizes the contingencies activity during the years ended December 31, 2025, 2024 and 2023:

Tax Claims

Withholding Tax in the Brazil-Argentina Double Taxation Convention

On November 6, 2014, the Brazilian subsidiaries, Mercadolivre.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Pago Instituição de Pagamento Ltda. (formerly known as “Mercado Pago.com Representações Ltda.”) and the Argentine subsidiary, MercadoLibre S.R.L., filed a writ of mandamus and requested a preliminary injunction with the Federal Court of Osasco against the federal tax authority to avoid the withholding income tax (“IRRF”) over payments remitted by the Brazilian subsidiaries to MercadoLibre S.R.L. for the provision of IT support and assistance services by the latter, and requested reimbursement of the amounts improperly withheld over the course of the preceding five (5) years. An initial injunction granted in 2014 was revoked in 2015, and subsequent appeals were unsuccessful through 2021, with disputed amounts deposited in court. In 2023 and 2024, the matter advanced to the Superior Court of Justice, which determined in October 2024 that the case would be judged as a binding precedent. Besides, in cases involving other taxpayers which also applied the convention signed between Brazil and Argentina to prevent double taxation (“Convention”) as amended by the 2017 protocol, the Superior Court of Justice decided the IRRF is due in the State of the source (i.e. Brazil), given that the Convention grants such rights regardless whether the services provided between the parties contain transfer of technology or not. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is probable based on the technical merits of the Company’s tax position and the existence of adverse decisions issued by the Superior Court of Justice previously mentioned.

Considering that the Convention to prevent double taxation was amended in 2017, the Company started a new tax claim for the period from January 2019 onwards, and the court granted a preliminary injunction recognizing the right of collecting the withholding tax at a 10% rate. As a result of this preliminary injunction, further judicial deposits of withholding tax were based on a rate of 10%. On September 6, 2025, the first instance of the Federal Justice rendered a judgment revoking the previously granted injunction and denying the requested writ of mandamus. The Company appealed this decision to the Federal Regional Court of the 3rd Region and submitted a request for interim relief on appeal aiming to maintain the suspension of tax enforceability. The Federal Regional Court of the 3rd Region denied the Company’s request. Therefore, on October 10, 2025, the Company deposited into court the amount arising from the difference in the withholding tax rate for $25 million from September 2024 onwards. According to the current stage of both cases, the Company maintains the provision considering a 15% rate.

On September 17, 2024, the Brazilian subsidiary Mercado Crédito Sociedade de Crédito, Financiamento e Investimento S.A. also filed a writ of mandamus with the same subject, for both intercompany management and IT services agreements. The preliminary injunction was initially granted, but the Federal Government filed an interlocutory appeal, and the decision was reversed on December 15, 2025. Therefore, the Company started depositing the withholding tax on court and the case is pending judgment. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is probable based on the technical merits of the Company’s tax position and the existence of adverse decisions issued by the Superior Court of Justice.

On October 10, 2024, the Company filed a writ of mandamus and requested a preliminary injunction to prevent the withholding of income tax on payments remitted to Argentina for intercompany management agreements between the Argentine subsidiary MercadoLibre S.R.L. and the Brazilian subsidiaries eBazar.com.br Ltda. and Mercado Pago Instituição de Pagamento Ltda. (considering the writ of mandamus filed in 2014 had not included intercompany management services), as well as management and IT services agreements involving Mercado Pago Corretora de Seguros Ltda., by applying the Convention to prevent double taxation or, alternatively, by applying the 10% tax rate cap. For this case, a favorable first-instance decision was rendered on December 9, 2025. The case will proceed to appellate review. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is probable based on the technical merits of the Company’s tax position and the existence of adverse decisions issued by the Superior Court of Justice.

For that reason, the Company has recorded a provision for the disputed amounts, which was $528 million as of December 31, 2025, and which was recorded in non-current other liabilities in the consolidated balance sheets, net of the corresponding judicial deposits for$508 million (which includes$112 million of interest income).

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Interstate rate of ICMS-DIFAL on interstate sales

Interstate rate of ICMS-DIFAL on interstate sales without Complementary Law

During 2020 and 2021, the Brazilian subsidiaries, eBazar.com.br Ltda. and Mercado Pago Instituição de Pagamento Ltda., filed 15 writs of mandamus with the State Courts of Justice where these companies have sales branches in order to prevent Brazilian states from collecting the ICMS on interstate sales at a differential rate (“ICMS-DIFAL”) without the existence of a complementary law. Four of these cases were filed in 2020 (for the branches of Barueri and Louveira) and the other 11 were filed in 2021, after eBazar.com.br Ltda. opened a new branch in Extrema. On February 24, 2021, the Brazilian Supreme Court (“STF”) ruled on the controversy in a binding precedent, which declared the unconstitutionality of ICMS-DIFAL without the proper complementary law. In the same case, however, the Supreme Court ruled on the modulation of the effects of its decision (with retroactive effect).

From those 11 cases filed by the Company after the STF’s decision (after February 24, 2021), 8 became final and unappealable in favor of the corresponding States, and therefore their corresponding liabilities were settled with the corresponding judicial deposits. Other 2 of the 11 cases became final and unappealable in favor of Ebazar.com.br Ltda. Finally, the remaining case of those 11 cases is still pending and may not stand because of the modulation of effects with respect to that decision. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing is probable. For that reason, the Company has recorded a $2 million provision for the disputed amounts related to the remaining case, which is presented net of the corresponding judicial deposits of $2 million.

With respect to the 4 cases filed by the Company prior to the STF’s decision (before February 24, 2021),2 of them became final and unappealable in favor of the Company. Of the remaining 2 cases, in June 2024, one of the cases related to the State of Rio de Janeiro received judgment partially in favor of the Company. In September 2025, the Company obtained a partially favorable second instance decision and filed a motion for clarification, which is still pending judgment. In September 2024, the other one of the cases, related to the State of Paraná, had been received in the Superior Tribunal of Justice to the judgment of a Special Appeal filed by the State, which is now pending. The Company has not recorded any liability for the controversial amounts. The Company deposited into court the disputed amounts. As of December 31, 2025, the total amount of the deposits related to the ongoing cases was $4 million.

Interstate rate of ICMS-DIFAL on interstate sales under Law No. 190/22

In January 2022, (therefore, already in the course of fiscal year 2022 and already in full application of the understanding of the Supreme Court for unconstitutionality), supplementary Law No. 190/22 was published, outlining the general rules for the requirement of DIFAL and expressly mentioning the need to comply with the principle of anticipation or prospective application of taxes (pursuant to which no tax may be levied before the expiry of ninety days from the enactment of the law or in the same fiscal year of enactment). Notwithstanding this provision, which expressly points to the need to comply with the anticipation, Brazil’s Federation States have not complied with this guarantee. Therefore, eBazar.com.br Ltda. and Mercado Pago Instituição de Pagamento Ltda., filed writs of mandamus to the 27 Federation States, aimed at preventing the Brazilian tax authorities demand payments of the DIFAL. In this regard, the STF has issued a decision regarding the constitutionality of the supplementary Law on November 29, 2023. In the judgment, the majority of STF judges considered the supplementary Law No. 190/22 to be constitutional, therefore, the ICMS-DIFAL is due from April 5, 2022, due to the corresponding time lapse of ninety days between the law enacting and the beginning of the charge. This decision was reached in a Direct Action of Unconstitutionality (ADI 7066) but is not yet final, as a motion for clarification filed on May 13, 2024 is still pending.

On October 21, 2025, in a leading case (Theme 1266), the STF reaffirmed the ADI 7066 ruling but clarified that, exclusively for fiscal year 2022, DIFAL cannot be collected from taxpayers who had filed lawsuits challenging the tax by November 29, 2023 (as the Company did), and had not paid the tax that year. This decision from STF led to an update in the Company’s risk assessment for these cases, whose risk of losing had been considered probable and is now considered remote. Therefore, the Company recognized a reversal on the $33 million provision during the three-month period ended December 31, 2025. The deposits will be withdrawn to the extent that the Courts provide authorization.

Interstate rate of ICMS-DIFAL over fixed assets

From April to September 2022, the Brazilian subsidiary Mercado Envios Serviços de Logística Ltda., now incorporated by eBazar.com.br Ltda., also filed writs of mandamus to 3 Federation States (São Paulo, Santa Catarina and Bahia), for the purpose of preventing the Brazilian tax authorities from demanding payment of the DIFAL over their respective fixed assets not explicitly addressed by the supplementary Law No. 190/22. Regarding this topic, the STF has not expressly pointed to the principle of anticipation. Therefore, there are two controversies regarding DIFAL over fixed assets: (i) if DIFAL is applicable under the previous supplementary Law No. 87/96, and (ii) if supplementary Law No. 87/96 is deemed not applicable, if the new supplementary Law No. 190/22 needs to comply with the principle of anticipation. In this last controversy, the STF did not mentioned that the same decision above mentioned applies to the Brazilian subsidiary Mercado Envios Serviços de Logística Ltda., and its writs of mandamus. The resolution of the controversy will depend on the adjudication of the leading case (Theme No. 1369) by the Brazilian Superior Court of Justice (“STJ”). Therefore, Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is reasonably possible for the period between January 1, 2022 to April 4, 2022, and probable for the period between April 5, 2022 to December 31, 2022 based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any liability for the controversial amounts related to the period until April 4, 2022, and has recorded liabilities for the disputed amounts related to the period from April 5, 2022 to December 31, 2022 for$3 million which are presented net of the corresponding judicial deposits of$3 million.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Exclusion of ICMS tax benefits from federal taxes base

The Company has ICMS tax incentives granted by the State of Minas Gerais, through a special regime signed with the state by means of a term of agreement, which are aimed at implementing and expanding business in that state. See Note 2 – Summary of significant accounting policies of these audited consolidated financial statements for additional detail on the ICMS tax incentives.

On November 9, 2021 the Company filed a writ of mandamus which claimed the exclusion of the amounts relating to the ICMS tax benefits granted by the State of Minas Gerais through the special regime from the tax base of the Corporate Income Tax (“IRPJ”) and of the Social Contribution on Net Profits or CSLL. After a series of favorable decisions, on April 4, 2025, the case became final and unappealable in favor of the Company. The Company had recorded a corresponding income tax benefit arising from the ICMS tax incentives from September 2021 up to December 2023, which amounted to $38 million considering the exchange rate as of December 31, 2025.

On April 25, 2023, the Company filed a writ of mandamus seeking an injunction and claiming the exclusion of the amounts relating to the ICMS tax benefits granted by the State of Minas Gerais in the tax base of the Social Contributions (PIS and COFINS). Favorable first-instance decisions were issued; however, in October 2024 the proceedings were stayed pending a final ruling by the STF on a leading case (Theme 843). Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is reasonably possible but not probable based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any expense or liability for the disputed amounts. As of December 31, 2025, the total disputed amount was $14 million.

In December 2023 Law 14,789 was enacted, with effect from January 2024, modifying the previous regulation so that the inclusion of the presumed tax credits in the calculation basis of IRPJ/CSLL and PIS/COFINS would become mandatory. On October 18, 2024, the subsidiary eBazar.com.br Ltda. filed two new writs of mandamus, seeking the recognition of the right not to submit to the illegal and unconstitutional requirement of the IRPJ, CSLL, PIS and COFINS on the presumed tax credits from transactions related to the ICMS in the fiscal year of 2024 forward.

Regarding the writ of mandamus filed to set aside the federal contributions IRPJ and CSLL under Law 14,789 (from January 2024 onwards), a preliminary injunction was granted in September 2025 and subsequently upheld on appeal, suspending the enforceability of the related tax assessments. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is not more likely than not based on the technical merits of the Company’s tax position. Accordingly, the Company has not recorded any expense or liability for the disputed amounts. As of December 31, 2025, the total disputed amount was $102 million.

Regarding the writ of mandamus filed to set aside the federal contributions PIS and COFINS under Law 14,789 (from January 2024 onwards), injunctions were granted and upheld in 2025, and the proceedings have been stayed pending the STF’s decision on Theme 843. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is possible but not probable based on the technical merits of the Company’s tax position. Accordingly, the Company has not recorded any expense or liability for the disputed amounts. As of December 31, 2025, the total disputed amount was $28 million.

Services Tax exclusion in the tax base of the Federal Contributions (PIS/COFINS)

On August 29, 2017, the Brazilian subsidiaries, eBazar.com.br Ltda., Ibazar.com Atividades de Internet Ltda., Mercado Pago Instituição de Pagamento Ltda., and Mercado Envios Serviços de Logística Ltda., filed a writ of mandamus and requested a preliminary injunction before the Federal Justice in Osasco against the Federal Government to exclude the Municipal Service Tax in the tax base of the Federal Contributions (PIS/COFINS). Favorable first- and second-instance decisions were issued in 2019. Subsequent appeals by the Federal Government remain pending before the STF, where the proceedings of a related leading case have been suspended since February 2021. The STF started over the judgment on August 28, 2024. However, after a draw in the trial, the judges decided again to suspend the case. Management, based on the opinion of external legal counsel and the current composition of the Brazilian Supreme Court (who has shown dubious jurisprudence in similar cases), is of the opinion that the risk of losing the case is probable. For that reason, the Company has recognized a provision for the disputed amounts of$73 million.

Administrative tax claims

Federal taxes - Tax payments for the 2016 fiscal year

On October 30, 2020 and November 9, 2020, Mercado Pago Instituição de Pagamento Ltda. and eBazar.com.br Ltda., respectively, received tax assessments claiming income tax payments for the 2016 fiscal year, with respective penalties and fines. In these assessments, the tax authorities do not recognize certain expenses incurred by the Brazilian subsidiaries, such as technology services imported from MercadoLibre S.R.L., Meli Uruguay S.R.L., and MercadoLibre, Inc., as deductible for income tax purposes. The tax authorities concluded that the Brazilian entities failed to submit sufficient evidence during the tax assessment that these services were necessary and effectively hired and paid by the Brazilian subsidiaries. The tax assessments that Mercado Pago Instituição de Pagamento Ltda. and eBazar.com.br Ltda. received amounted to a total of $21 million and $17 million, respectively, considering the exchange rate as of December 31, 2025. The subsidiaries challenged the assessments in administrative proceedings, asserting that the services were necessary, effectively rendered, and properly documented. First-instance administrative decisions issued in 2021 were unfavorable, and both cases were appealed. In the case of eBazar.com.br Ltda., the second-instance administrative court remanded the matter for further evidentiary proceedings, resulting in a partially favorable decision in November 2025, which is currently subject to a special appeal filed by the Federal Government in January 2026. The administrative appeal relating to Mercado Pago Instituição de Pagamento Ltda. remains pending. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is not more likely than not. For that reason, the Company has not recorded any expense or liability for the disputed amounts.

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Federal taxes - Revenue accounts 2017 fiscal year

On December 30, 2022, eBazar.com.br Ltda. and one of the Company’s Senior Legal Directors received three tax assessments claiming corporate income taxes (IRPJ and CSLL) in the amount of$80 million, IRRF in the amount of$12 million, and PIS and COFINS in the amount of$13 million, all of them in relation to the taxable year of 2017, including punitive fine of 150% over the tax charged and interest on late payments based on the SELIC rate, and according to the exchange rate as of December 31, 2025. The Senior Legal Director was assessed as jointly liable with eBazar.com.br, due to his role as statutory officer, under provisions of the National Tax Code that enable joint tax liability for acts potentially in violation of the law or the by-laws. With respect to IRPJ and CSLL, the tax authorities concluded that the Brazilian company failed to report taxable income as the company has made book entries in the profit and loss accounts, reverting previous revenues or other revenue accounts, as well as for using foreign languages such as English and Spanish in its book-keeping. The tax authorities also claimed that the company failed in the issuance of invoices, disregarding that the company indeed has a Special Tax Regime granted by the Municipality of Osasco that allows the issuance of a single invoice per period. In July, 2024 in the tax assessment case claiming corporate income taxes (IRPJ and CSLL), a first-instance administrative decision partially favored the Company by reducing the punitive fine from 150% to 100%, while maintaining the tax assessments and joint liability. The Company appealed, and in September 2025 the administrative court of second instance remanded the IRPJ and CSLL matters for further evidentiary proceedings, which remain pending. Regarding the IRRF, the assessed amounts are already deposited in court under a separate writ of mandamus addressing the application of the Brazil-Argentina tax convention. In September 2025, the tax authorities acknowledged the existence of such deposits, and the matter remains pending judgment. In the case of PIS and COFINS, the administrative authorities initiated additional verification procedures in December 2023, and the case remains under review. The Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the cases is not more likely than not in the cases of IRPJ and CSLL and reasonably possible, but not probable in the cases of PIS and COFINS, based on the technical merits. In the case of IRRF, the Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is remote. For that reason, the Company has not recorded any expense or liability for the disputed amounts.

Buyer protection program

The maximum potential exposure under this program is estimated to be the volume of payments on the Marketplace, for which claims may be made under the terms and conditions of the Company’s BPP. Based on historical losses to date, the Company does not believe that the maximum potential exposure is representative of the actual potential exposure. The Company records a liability with respect to losses under this program when they are probable and the amount can be reasonably estimated. See Note 2 – Summary of significant accounting policies – Provision for buyer protection program of these audited consolidated financial statements for further detail.

As of December 31, 2025 and 2024, Management’s estimate of the maximum potential exposure related to the Company’s buyer protection program is$7,953 million and$5,769 million, respectively, for which the Company recorded a provision of$19 million and$14 million, respectively.

Commitments

The Company has signed 5-year agreements with certain providers, under which the Company committed to purchase cloud platform and other technology services for a total minimum aggregate purchase commitment of $3,359 million. As of December 31, 2025, the remaining purchase commitment is $2,532 million.

The Company has signed a 10-year agreement with Gol Linhas Aereas S.A. under which the Company committed to contract a minimum amount of air logistics services for a total cost of $378 million (portion allocated to the services component of the agreement). As of December 31, 2025, the remaining purchase commitment is $291 million.

Since October 2023, the Company has signed 3-year agreements with certain shipping companies in Brazil, under which the Company committed to contract a minimum amount of logistics services for a total cost of $57 million. As of December 31, 2025, the remaining purchase commitment is $26 million.

As of December 31, 2025, the Company has lease agreements for new warehouses in Brazil, Mexico, Argentina and Chile for a total amount of $2,031 million that have not yet commenced. Lease terms under the agreements are between 4 to 16 years.

The Company has unconditional purchase obligations related to capital expenditures for a total amount of $34 million. As of December 31, 2025, the remaining purchase commitment is $6 million.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 15. LONG TERM RETENTION PROGRAM

In April 2025, the board of directors, upon the recommendation of the Compensation Committee, adopted the 2025 Long-Term Retention Program (“2025 LTRP”). In addition to the annual salary and bonus of each employee, certain employees (“Eligible Employees”) are eligible to participate in the 2025 LTRP, which provides for the grant to an Eligible Employee of a cash-settled fixed (a “2025 LTRP Fixed Award”) and cash-settled variable award (a “2025 LTRP Variable Award”, and together with any 2025 LTRP Fixed Award, the “2025 LTRP Awards”). In order to receive payment in respect of the 2025 LTRP Awards, each Eligible Employee must remain employed as of each applicable payment date. The 2025 LTRP award is payable as follows:

■the eligible employee will receive 16.66% of half of his or her target 2025 LTRP bonus once a year for a period ofsix years, with the first payment occurring no later than April 30, 2026 (the “2025 Annual Fixed Payment”); and

■on each date the Company pays the Annual Fixed payment to the eligible employee, he or she will also receive a payment (the “2025 LTRP Variable Payment”) equal to the product of (i)16.66% of half of the target 2025 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 2024 Stock Price (as defined below). For purposes of the 2025 LTRP, the “2024 Stock Price” shall equal$1,944.47 (the average closing price of the Company’s common stock on the NASDAQ Global Select Market during the final 60 trading days of 2024) and the “Applicable Year Stock Price” shall equal the average closing price of the Company’s common stock on the NASDAQ Global Select Market during the final 60 trading days of the year preceding the applicable payment date for so long as the Company’s common stock is listed on the NASDAQ.

The rest of the LTRPs outstanding as of December 31, 2025, 2024 and 2023 follow a similar calculation method as explained above for the 2025 LTRP. Similar to the 2025 LTRP, the rest of the outstanding LTRPs additionally have eligibility conditions to be achieved at each year-end and require the employee remain employed by the Company as of each payment date.

During the year ended December 31, 2025, the Company paid$238 million ($82 million in cash-settled fixed and$156 million in cash-settled variable award) of LTRP plus social security obligations applicable in each local jurisdiction.

The following table summarizes the 2018, 2019, 2020, 2021, 2022, 2023, 2024 and 2025 LTRP Variable Award contractual obligation for the years ended December 31, 2025, 2024 and 2023:

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The following table summarizes the LTRP accrued compensation expense for the years ended December 31, 2025, 2024 and 2023:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 16. LOANS PAYABLE AND OTHER FINANCIAL LIABILITIES

The following tables summarize the Company’s loans payable and other financial liabilities as of December 31, 2025 and 2024:

See Note 19 – Securitization transactions and Note 20 – Leases of these audited consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease liabilities, respectively.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

(1) As of December 31, 2025, and 2024 includes the effect of the derivative instruments that qualified for fair value hedge accounting. See Note 21 – Derivative instruments of these audited consolidated financial statements for further detail.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

2.375% Sustainability Senior Notes Due 2026 and 3.125% Senior Notes Due 2031

On January 14, 2021, the Company closed a public offering of $400 million aggregate principal amount of 2.375% Sustainability Notes due 2026 (the “2026 Sustainability Notes”) and $700 million aggregate principal amount of 3.125% Notes due 2031 (the “2031 Notes”). The 2026 Sustainability Notes matured on January 14, 2026. The Company pays interest on the 2031 Notes on January 14 and July 14 of each year, beginning on July 14, 2021. The 2031 Notes will mature on January 14, 2031. In connection with the 2026 Sustainability Notes and the 2031 Notes, the Company capitalized $11 million of debt issuance costs, which are amortized during the term of the 2026 Sustainability Notes and the 2031 Notes.

The Company may, at its option, redeem or purchase the 2031 Notes, in whole or in part, at any time prior to October 14, 2030 (the date that is three months prior to the maturity of the 2031 Notes), by paying 100% of the principal amount of the 2031 Notes so redeemed plus the applicable “make-whole” amount and accrued and unpaid interest and additional amounts, if any. The Company may, at its option, redeem the 2031 Notes on October 14, 2030 or at any time thereafter, at the redemption price of 100% of the principal amount of the 2031 Notes so redeemed plus accrued and unpaid interest and additional amounts, if any. If the Company experiences certain change of control triggering events, it may be required to offer to purchase the 2031 Notes at 101% of their principal amount plus any accrued and unpaid interest thereon through the purchase date.

During 2025, the Company repurchased $13 million in principal amount of the outstanding 2031 Notes. The total amount paid amounted to $12 million. During 2024, the Company 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. For the years ended December 31, 2025 and 2024, the Company recognized $1 million and $11 million as a gain in Interest income and other financial gains in the consolidated statement of income.

In January 2026, the Company repaid the total outstanding amount of principal and interest of the 2026 Sustainability Notes equaling $367 million.

Certain of the Company’s subsidiaries (the “Subsidiary Guarantors”) fully and unconditionally guarantee 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 (the “Subsidiary Guarantees”). The initial Subsidiary Guarantors were MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., Mercado Pago Instituição de Pagamento Ltda. (formerly known as “MercadoPago.com Representações Ltda.”), MercadoLibre Chile Ltda., MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico (formerly known as “MercadoLibre, S. de R.L. de C.V.”), DeRemate.com de México, S. de R.L. de C.V. and MercadoLibre Colombia Ltda. On October 27, 2021, MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico became an excluded subsidiary pursuant to the terms of the 2026 Sustainability Notes and the 2031 Notes and it was released from its Subsidiary Guaranty. On October 27, 2021, MP Agregador, S. de R.L. de C.V. became a Subsidiary Guarantor under the 2026 Sustainability Notes and the 2031 Notes. On July 1 and October 1, 2022, Ibazar.com Atividades de Internet Ltda. and Mercado Envios Servicos de Logistica Ltda. were merged into eBazar.com.br Ltda, respectively. On May 2, 2025, as a result of the spin-off of DeRemate.com de México, S. de R.L. de C.V. completed in January 2025 (the “DeRemate Spinoff”), MPFS, S. de R.L. de C.V. became a Subsidiary Guarantor under the 2026 Sustainability Notes and the 2031 Notes.

The 2031 Notes rank equally in right of payment with all of the Company’s other existing and future senior unsecured debt obligations. Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law.

4.900% Senior Notes Due 2033

On December 9, 2025, the Company issued $750 million aggregate principal amount of 4.900% Notes due 2033 (the “2033 Notes”), the payment of principal, interest, and all other amounts in respect of the 2033 Notes, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by the Subsidiary Guarantors. The Company will pay interest on the 2033 Notes semi-annually on January 15 and July 15 of each year, commencing on July 15, 2026. The 2033 Notes will mature on January 15, 2033. Also, the Company capitalized $5 million of debt issuance costs and had $12 million of debt discount, which are amortized during the term of the 2033 Notes.

The Company may, at its option, redeem or purchase the 2033 Notes, in whole or in part, at any time prior to November 15, 2032 (the date that is two month prior to the maturity of the 2033 Notes), in each case by paying 100% of the principal amount of such 2033 Notes so redeemed plus the applicable “make-whole” amount and accrued and unpaid interest and additional amounts, if any. The Company may, at its option, redeem the 2033 Notes, in whole or in part, on November 15, 2032 or at any time thereafter, in each case at the redemption price of 100% of the principal amount of such 2033 Notes so redeemed plus accrued and unpaid interest and additional amounts, if any. If the Company experiences certain change of control triggering events, it may be required to offer to purchase the 2033 Notes at 101% of their principal amount plus any accrued and unpaid interest thereon through the purchase date.

The 2033 Notes rank equally in right of payment with all of the Company’s other existing and future senior unsecured debt obligations. Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

Revolving Credit Agreement

On September 27, 2024, the Company entered into a $400 million amended and restated revolving credit agreement (the “Amended and Restated Revolving Credit Agreement”) with the lenders party thereto and the Company’s subsidiaries MercadoLibre S.R.L., eBazar.com.br Ltda., Mercado Pago Instituição de Pagamento Ltda., DeRemate.com de Mexico S. de R.L. de C.V., MP Agregador, S. de R.L. de C.V., MercadoLibre Chile Ltda., and MercadoLibre Colombia Ltda. as initial guarantors. On July 23, 2025, as a result of the DeRemate Spinoff, MPFS, S. de R.L. de C.V. became a guarantor under the Amended and Restated Credit Agreement in accordance with its terms. The Company’s obligations under the Amended and Restated Credit Agreement are guaranteed by the guarantors, as stated before.

On September 12, 2025, the Company entered into Amendment No. 1 (the “First Amendment”) to the Amended and Restated Revolving Credit Agreement (as amended by the First Amendment, the “Amended Credit Agreement”) with the lenders party thereto and the guarantors. The First Amendment permits the Company to request, at one or more times, that existing and/or new lenders provide, at their election, up to $400 million of additional commitments, for an aggregate principal amount of credit commitments of up to $800 million. The Company’s obligations under the Amended Credit Agreement remain guaranteed on an unsecured basis by the guarantors. All other obligations of the Company under the Amended Credit Agreement remain unchanged.

The interest rates under the Amended Credit Agreement are based on Term SOFR (“Secured Overnight Funding Rate”) plus an interest margin of 1.00% per annum, which may be decreased to 0.90% per annum or increased to 1.15% per annum depending on the Company’s debt rating, as further provided under the Amended Credit Agreement. Any loans drawn from the Amended Credit Agreement must be repaid on or prior to September 27, 2028, which will be automatically extended to September 27, 2029 upon satisfaction, on or prior to August 28, 2027, of the Maturity Extension Conditions (as defined in the Amended Credit Agreement), as further provided in the Amended Credit Agreement. The Company is also obligated to pay a commitment fee on the unused amounts of the facility at a rate per annum equal to 25% of the then Applicable Margin, depending on the Company’s debt rating, as further provided under the Amended Credit Agreement.

As of December 31, 2025, no amounts have been borrowed under the facility.

NOTE 17. RELATED PARTY TRANSACTIONS

Indemnification agreements

The Company has entered into indemnification agreements with each of the directors and executive officers of its local subsidiaries. These agreements require the Company to indemnify such individuals, to the fullest extent permitted by the laws of the jurisdiction where these subsidiaries operate, for certain liabilities to which they may become subject by reason of the fact that such individuals are or were directors or executive officers of the local subsidiaries of the Company.

Advisory Agreement and Shares granted

On April 8, 2022, the Company entered into an Advisory Services Agreement with Mr. Stelleo Tolda (former MercadoLibre’s Executive officer) whereby he provided to the Company with certain consulting and advisory services as an independent contractor for athree-year period for a fee of $10,000 per month. This advisory services agreement was terminated in its entirety effective September 13, 2024 due to Mr. Tolda’s appointment as a Class I director of the Company, with a term of service of September 12, 2024 through until the Company’s 2025 Annual Meeting of Stockholders when he was elected to serve until the Company's 2026 Annual Meeting of Stockholders. The Company also entered into a restricted stock award agreement with Mr. Tolda on April 8, 2022, whereby the Company awarded Mr. Tolda a grant of 5,051 shares of restricted stock under the Amended and Restated 2009 Equity Compensation Plan. One-fifth of the restricted stock award vests on each of thefive anniversaries of the grant date, subject to Mr. Tolda’s continued compliance with the restrictive covenants set forth in the agreement. As of December 31, 2025, Mr. Tolda continues to comply with the aforementioned restrictive covenants.

NOTE 18. CASH DIVIDEND DISTRIBUTION

After reviewing the Company’s capital allocation process the board of directors has concluded that it has multiple investment opportunities that can generate greater return to shareholders through investing capital into the business over a dividend policy. Consequently, the board of directors suspended the payment of dividend to shareholders as from the first quarter of 2018.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 19. SECURITIZATION TRANSACTIONS

The process of securitization consists of the issuance of securities collateralized by a pool of assets through a special purpose entity (“SPEs”), often under a VIE.

The Company securitizes financial assets associated with its credit card receivables and loans receivable portfolio. The Company’s securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote SPEs. The Company generally retains economic interests in the collateralized securitization transactions, which are retained in the form of subordinated interests. For accounting purposes, the Company is generally precluded from recording the transfers of assets in securitization transactions as sales and is required to consolidate the SPE.

The Company securitizes certain credit card receivables related to users’ purchases through a Chilean SPE. Under the SPE contract, the Company has determined that it has no obligation to absorb losses or the right to receive benefits of the SPE that could be significant because it does not retain any equity certificate of participation or subordinated interest in the SPE. As the Company does not control the vehicle, its assets, liabilities and related results are not consolidated in the Company’s financial statements.

Additionally, the Company securitizes certain credit card receivables related to users’ purchases through Brazilian SPEs. Under the SPE contracts, the Company has determined that it has the obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it retains subordinated interest in the SPEs. As the Company controls the vehicles, the assets, liabilities and related results are consolidated in its financial statements.

The Company securitizes certain loans receivable through Brazilian, Argentine, Mexican and Chilean SPEs, formed to securitize loans receivable provided by the Company to its users or purchased from financial institutions that grant loans to the Company’s users through Mercado Pago. According to the SPE contracts, the Company has determined that it has both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant because it retains the equity certificates of participation and would therefore also be consolidated.

When the Company controls the vehicle, it accounts for the securitization transactions as if they were secured financing and therefore the assets, liabilities and related results are consolidated in its financial statements. The secured debt is issued by the SPEs and includes collateralized securities used to fund the Company’s fintech business. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have recourse to the Company. Additionally, the cash flows generated by the SPEs are restricted to the payment of amounts due to third-party investors, but the Company retains the right to residual cash flows.

The following table summarizes the Company’s collateralized debt under securitization transactions, as of December 31, 2025:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

(1) Minimum and maximum maturity depending on the applicable interest rate within the range.

In June 2025, the Company renegotiated key terms of several collateralized debt structures in Brazil to reduce funding costs and increase flexibility in asset eligibility. As a result, the Company achieved interest rate reductions across three SPEs in Brazil: Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados reduced its interest rate spread from 2.50% to 2.25%, Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado from 3.50% to 3.00% (and extended its maturity from August 2025 to April 2028), and Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizado from 2.35% to 1.75% (while also extending its maturity from January 2030 to October 2031).

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The assets and liabilities of the SPEs through which the Company securitizes financial assets as of December 31, 2025 and 2024, as follows:

(1) Restricted cash and cash equivalents from the SPEs include balances maintained in Mercado Pago’s digital wallets that are eliminated for consolidation purposes.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 20. LEASES

The Company leases certain fulfillment, cross-docking and service centers, office space, aircraft, aircraft hangars, machines and vehicles in the various countries in which it operates. The lease agreements do not contain any residual value guarantees or material restrictive covenants.

Supplemental balance sheet information related to leases was as follows:

The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases as of December 31, 2025:

(1)Includes discount rates of leases in local currency and U.S dollar.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The components of lease expense were as follows:

(1) Variable lease payments are expensed as incurred and include charges such as flight hours above minimum, fuel, among others.

Supplemental cash flow information related to leases was as follows:

The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by the Company’s incremental borrowing rates and internal rates of return to calculate the lease liabilities for the operating and finance leases, respectively:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

NOTE 21. DERIVATIVE INSTRUMENTS

Cash flow hedges

As of December 31, 2025, the Company used foreign currency exchange contracts to hedge the foreign currency effects related to the forecasted purchase of MPOS devices in U.S. dollars owed by a Brazilian subsidiary and hosting, licenses, fraud prevention, LTRP expenses and lease payments, which are payable in U.S. dollars (or in local currency linked to the U.S. dollar exchange rate), owed by Brazilian and Mexican subsidiaries whose functional currencies are the Brazilian Real and Mexican Peso, respectively. The Company designated the foreign currency exchange contracts as cash flow hedges, the derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the “Cost of net revenues and financial expenses”, “Product and technology development, “Sales and marketing”, “General and administrative” expenses and “Foreign currency losses, net” line items, in the same period the forecasted transaction affects earnings. As of December 31, 2025, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into the consolidated statements of income within the next 12 months.

Finally, the Company has entered into a currency swap contract to hedge the foreign exchange effects related to a non-functional currency financial debt issued by one of its Brazilian subsidiaries. The Company designated the currency swap contract as cash flow hedge, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the “Cost of net revenues and financial expenses” and “Foreign currency losses, net” line items in the same period the forecasted transaction affects earnings. The derivative’s gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into earnings within the next 12 months.

Fair value hedges

The Company has entered into swap contracts to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt held by its Brazilian subsidiaries. The Company designated the swap contracts as fair value hedges. The derivatives’ gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial debt due to the hedged risks. Since the terms of the interest rate swaps match the terms of the hedged debts, changes in the fair value of the interest rate swaps are offset by changes in the fair value of the hedged debts attributable to changes in interest rates. Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debts is recorded at the floating rate.

The Company also uses future contracts to hedge the interest rate exposure of its asset-backed loan portfolio originated in Brazil. In these cases, where the assets included in the portfolio share the same risk exposure, the Company designated the future contracts as fair value hedges under the portfolio layer method. The derivatives’ gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial assets due to the hedged risks. Accordingly, the Company will unlock its portfolio's fixed-rate to mitigate the effect of interest rate fluctuations.

Net investment hedge

The Company used cross currency swap contracts to reduce the foreign currency exchange risk related to its investment in its Brazilian foreign subsidiaries and the interest rate risk. This derivative was designated as a net investment hedge and, accordingly, gains and losses are reported as a component of accumulated other comprehensive loss. The derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the “Interest expense and other financial losses” and “Foreign currency losses, net” line items, in the same period that the interest expense affects earnings. As of December 31, 2025 and 2024, there are no outstanding derivatives hedging the interest rate fluctuation of the financial debt designated as cash flow hedges.

Derivative instruments not designated as hedging instruments

The Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S. dollars of certain of its Brazilian and Mexican subsidiaries, whose functional currencies are the Brazilian Real and the Mexican Peso, respectively. These transactions were not designated as hedges for accounting purposes. As of December 31, 2025, there are no outstanding derivatives hedging the foreign currency fluctuation not designated as hedging instruments.

The Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to debt securities denominated in U.S. dollars issued by certain Argentine subsidiary. As explained through Note 2 – Summary of significant accounting policies, the Company changed the functional currency for Argentine subsidiaries from Argentine Pesos to U.S. dollars under US GAAP, as a consequence of hyperinflation status, so these transactions were not designated as hedges for accounting purposes, as no foreign exchange risk exists under U.S. GAAP related to U.S. dollar denominated debt securities in Argentina.

Finally, as of December 31, 2025, the Company entered into swap contracts to hedge the interest rate fluctuation of certain portion of its financial debt in its Brazilian subsidiaries and VIEs. These transactions were not designated as hedges for accounting purposes.

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The following table presents the notional amounts of the Company’s outstanding derivative instruments:

Derivative instruments contracts

The fair values of the Company’s outstanding derivative instruments as of December 31, 2025 and 2024 were as follows:

The effects of derivative contracts designated as hedging instruments on the consolidated statements of comprehensive income as of December 31, 2025 and 2024 were as follows:

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MercadoLibre, Inc. Notes to Consolidated Financial Statements

The effect of the Company’s fair value hedge relationships over its fixed-rate financial debt on the consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 were as follows:

The carrying amount of the hedged items for fair value hedges over its fixed-rate financial debt included in the “Loans payable and other financial liabilities” lines item of the consolidated balance sheets as of December 31, 2025 and 2024 are $486 million and $401 million, respectively.

The effect of the Company’s fair value hedge relationships over its fixed-rate financial debt on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of December 31, 2025 and 2024 are less than $1 million and $2 million, respectively, reducing the carrying value of the hedged debt as of December 31, 2025 and 2024.

The effects of derivative contracts not designated as hedging instruments on the consolidated statements of income during the years ended December 31, 2025, 2024 and 2023 were as follows:

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