What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-23 compared with 2023-02-24 · 936 added, 870 removed, 1665 unchanged (52% of the section changed)

12 unchanged sentences

(member of Ernst & Young Global Limited), an independent registered public accounting firm, as stated in their report which appears in Item 15(a) of this Annual Report on Form 10-K.

62 | MercadoLibre, Inc.

Changes in Internal Control over Financial Reporting

11 unchanged sentences

OTHER INFORMATION

Not applicable.

Rule 10b5-1 Trading Plans

During the three months ended December 31, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

6 unchanged sentences

Except for the information regarding shares authorized for issuance under equity compensation plans (which is set forth below), the information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K within 120 days of the Company’s fiscal year ended December 31, 2023.

63 | MercadoLibre, Inc.

The following table presents information as of December 31, 2023 with respect to equity compensation plans under which shares of the Company’s common stock are authorized for issuance:

Equity Compensation Plan Information

Category Number of securities

to be issued upon

exercise of outstanding

options, Warrants

and Rights Weighted-average exercise price of

outstanding options, Warrants and

rights Number of securities

remaining available for

future issuance under equity

compensation plans

(excluding securities reflected in column (a)) (2)

Plan Category Equity Compensation Plan Information

Number of securities to be issued upon exercise of outstanding options, Warrants and Rights

Weighted-average exercise price of outstanding options, Warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (2)

Equity compensation plans approved by security holders (1)

12 unchanged sentences

Number of shares of common stock available under the Amended and Restated 2009 Plan.

T he maximum number of common stock reserved and available for delivery in connection with awards under the Amended and Restated 2009 Plan is 1,000,000 Shares of common stock underlying awards previously granted under the Amended and Restated 2009 Plan that terminate without being exercised, expire, are forfeited or canceled shall again be available pursuant to the Amended and Restated 2009 Plan.

The maximum number of shares of common stock reserved and available for delivery in connection with awards under the Amended and Restated 2009 Plan is 1,000,000 shares.

Any awards previously granted under the Amended and Restated 2009 Plan that terminate without being exercised, expire, are forfeited or canceled shall be available pursuant to the Amended and Restated 2009 Plan.

The shares of common stock issuable pursuant to any award granted under the Amended and Restated 2009 Plan shall be (i) authorized but unissued shares, (ii) shares of common stock held in the Corporation’s treasury, (iii) shares acquired by the Corporation on any stock exchange in which such shares are traded, or (iv) a combination of the foregoing.

7 unchanged sentences

Vesting dates can be accelerated on the occurrence of a specified event, as provided in an award agreement, or can be accelerated at the discretion of the administrator.

64 | MercadoLibre, Inc.

If a stock option expires or is terminated or canceled without having been exercised, it shall become null and void and of no further force and effect.

28 unchanged sentences

The information required by this item will be included in our 2024 Proxy Statement to be filed with the SEC and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

65 | MercadoLibre, Inc.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements.

9 unchanged sentences

(b) Exhibits.

The exhibits required by Item 601 of Regulation S-K are set forth under “Index to Exhibits” and is incorporated herein by reference.

The exhibits required by Item 601 of Regulation S-K are set forth under “Exhibit index” and is incorporated herein by reference.

FORM 10-K SUMMARY

66 | MercadoLibre, Inc.

EXHIBIT INDEX

Incorporated by Reference

Exhibit Number Exhibit Description Filed (*) or Furnished (**)

Herewith Form Filing Date

Herewith Incorporated by Reference

Form Filing Date

3.01 Registrant’s Amended and Restated Certificate of Incorporation.

4 unchanged sentences

10-K February 27, 2009

4.02 Indenture with respect to the Registrant’s 2.00% Convertible Senior Notes due 2028, dated as of August 24, 2018, between the Registrant and Wilmington Trust, National Association, as trustee.

8-K August 24, 2018

4.02 Indenture, dated January 14, 2021, between MercadoLibre, Inc., MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., MercadoPago.com Representações Ltda., MercadoLibre Chile Ltda., MercadoLibre, S.

12 unchanged sentences

8-K January 14, 2021

4.07 Description of Sec ur it ies

4.06 Description of Securities.

10-K February 23, 2022

7 unchanged sentences

S-1/A July 13, 2007

10.03 Form of Employment Agreements with Officers.

S-1/A July 13, 2007

10.04 Employment Agreement with Osvaldo Gimenez, dated as of March 26, 2008

10-K February 27, 2009

10.05 Amended and Restated 2013 Long-Term Retention Plan

10-Q August 5, 2016

10.06 Amended and Restated 2014 Long-Term Retention Plan

10-Q August 5, 2016

10.03 Amended and Restated 2019 Long-Term Retention Program.

2 unchanged sentences

10-Q May 6, 2021

10.09 Amended and Restated 2017 Long-Term Retention Program

10-Q May 6, 2021

10.10 Amended and Restated 2018 Long-Term Retention Program

10-Q May 6, 2021

10.11 Amended and Restated 2019 Long-Term Retention Program

10-Q May 6, 2021

10.12 Amended and Restated 2020 Long-Term Retention Program

10-Q May 6, 2021

10.05 2021 Long-Term Retention Program.

3 unchanged sentences

8-K May 9, 2022

10.15 Securities Purchase Agreement, dated as of March 11, 2019, by and between MercadoLibre, Inc.

and PayPal, Inc.

8-K March 13, 2019

10.07 MercadoLibre, Inc.

2019 Director Compensation Program

8-K August 7, 2019

2023 Long Term Retention Program.

8-K May 8, 2023

10.08 Amended and Restated 2009 Equity Compensation Plan.

2 unchanged sentences

10-Q November 4, 2022

10.19 Revolving C redit A greement dated March 31, 2022.

10.10 Revolving Credit Agreement dated March 31, 2022.

8-K March 31, 2022

5 unchanged sentences

22.01 List of Subsidiary Guarantors for the Registrant’s 2.375% Sustainability Notes due 2026 and 3.125% Notes due 2031.

23.01 Consent of Pistrelli, Henry Martin y Asociados S.R.L., Independent Registered Public Accounting Firm on Form S-3 and S-8

10-K February 24, 2023

23.01 Consent of Pistrelli, Henry Martin y Asociados S.R.L., Independent Registered Public Accounting Firm on Form S-8.

23.02 Consent of Deloitte & Co.

S.A., Independent Registered Public Accounting Firm on Form S-3 and S-8

S.A., Independent Registered Public Accounting Firm on Form S-8.

31.01 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97 Policy for the Recovery of Erroneously Awarded Compensation.

67 | MercadoLibre, Inc.

Exhibit Number Exhibit Description Filed (*) or Furnished (**)

Herewith Incorporated by Reference

Form Filing Date

101 The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL:

1 unchanged sentence

104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL and contained in Exhibit 101.

68 | MercadoLibre, Inc.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

2 unchanged sentences

Marcos Galperin

Chief Executive Officer

President and Chief Executive Officer

/s/ Martín de los Santos

Martín de los Santos

Vice President and Chief Financial Officer

February 23, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

69 | MercadoLibre, Inc.

Signature Title Date

/s/ Marcos Galperin Chief Executive Officer and Director (Principal Executive Officer) February 24, 2023

/s/ Marcos Galperin President, Chief Executive Officer (Principal Executive Officer) and Director

February 23, 2024

Marcos Galperin

/s/ Pedro Arnt Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 24, 2023

/s/ Martín de los Santos Sr.

Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

February 23, 2024

Martín de los Santos

/s/ Mario Vazquez Director February 23, 2024

13 unchanged sentences

Richard Sanders

70 | MercadoLibre, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of MercadoLibre, Inc.

(the Company) as of December 31, 2022, the related consolidated statements of income, comprehensive income, equity and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of MercadoLibre, Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

2 unchanged sentences

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opini on.

Critical Audit Matter

8 unchanged sentences

The Company’s CECL estimate is determined based on probability-weighed scenarios of default over the life of the loans receivable.

Probability of default models are estimated using a non-parametric method, which estimates the future default rate.

The models include a macroeconomic outlook for projections and recent performance.

The Company estimates marginal monthly default probabilities for each delinquency bucket, type of product and country.

These probabilities of default are combined with a set of Loss Given Default parameters, which depend on days past due, type of product and country, and are estimated by measuring an average of historical recovery rates from defaulted credits using Work-out and Chainladder approaches.

Auditing the CECL estimate was complex and required the application of significant judgment due to the inherent complexity of the models, assumptions and the interrelationship of the variables used in measuring the CECL estimate.

Significant assumptions and judgments with respect to the CECL estimate include the forecast of alternative economic scenarios, the probability weighting of those scenarios and the assumptions for definition of default and portfolio segmentation which considers its credit quality.

The CECL estimate is a significant estimate for which variations in model methodology, underlying assumptions and judgments could have a material effect on its measurement.

Probability of default models are estimated using a complex statistical model, which estimates the future default rate.

The Company estimates monthly default probabilities for each delinquency bucket, type of product and country.

Significant assumptions and judgments with respect to the CECL estimate include definition of default, portfolio segmentation that considers its credit quality and key inputs used for loss given default.

71 | MercadoLibre, Inc.

How we addressed the matter in our audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls related to the CECL estimate.

The controls we tested included, among others, controls over the development and review of inputs and models used to calculate the CECL estimate, data completeness and accuracy, economic forecasting, including the probability weighting of the economic scenarios and the governance and oversight over the modelled results.

To test the CECL estimate, our audit procedures included, among others, involving our credit risk modelling specialists to assist in assessing the methodology and assumptions used to estimate CECL and evaluate management’s forecasting methodology;

comparing management’s forward-looking information to independently derived forecasts and publicly available information;

evaluating the scenario probability weightings used in the CECL models and performing independent recalculations to test the mathematical accuracy of management’s models;

evaluating whether the assumptions used were reflective of the credit quality and testing the completeness and accuracy of data used in the measurement of the CECL estimate.

We also assessed the adequacy of the CECL estimate financial statement disclosures.

The controls we tested included, among others, controls over the development of the model, as well as controls over the and key inputs and assumptions used to calculate the CECL estimate.

We also tested the controls over the completeness and accuracy of the data used in the calculation.

To test the CECL estimate, our audit procedures included, among others, involving our credit risk modelling specialists to assist us in assessing the methodology and significant assumptions used by management, including definition of default, portfolio segmentation and the key inputs identified above that were used for loss given default.

We have also performed independent recalculations to test the mathematical accuracy of management’s model and assessed the adequacy of the CECL estimate financial statement disclosures.

/s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

Member of Ernst & Young Global Limited

We have served as the Company’s auditor since 2021.

Buenos Aires, Argentina

City of Buenos Aires, Argentina

February 23, 2024

72 | MercadoLibre, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

5 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of MercadoLibre, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”), and our report dated February 23, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

6 unchanged sentences

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

We believe that our audit provides a reasonable b asis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

5 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Pistrelli, Henry Martin & Asociados S.R.L.

PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

/s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

Member of Ernst & Young Global Limited

Buenos Aires, Argentina

City of Buenos Aires, Argentina

February 23, 2024

73 | MercadoLibre, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of MercadoLibre Inc.

and its subsidiaries (the "Company") as of December 31, 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of income, comprehensive income, equity, and cash flows, for the year ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements referred to above present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting princi ples generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United Stat es) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United State s of America.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

1 unchanged sentence

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

5 unchanged sentences

74 | MercadoLibre, Inc.

MercadoLibre, Inc.

Consolidated Balance Sheets

4 unchanged sentences

Restricted cash and cash equivalents 1,292 1,453

Short-term investments ($ 1,219 and $ 602 held in guarantee - Note 5)

Short-term investments 3,480 2,339

Accounts receivable, net 156 130

1 unchanged sentence

Loans receivable, net of allowances of $ 1,042 and $ 1,074 (Note 7)

Prepaid expenses 38 40

Inventories 238 152

Customer crypto-assets safeguarding assets (Note 2) 15 —

Customer crypto-assets safeguarding assets 34 15

Other assets 277 304

7 unchanged sentences

Intangible assets, net 11 25

Intangible assets at fair value (Note 2) 24 —

Deferred tax assets 710 346

10 unchanged sentences

Operating lease liabilities 166 142

Customer crypto-assets safeguarding liabilities (Note 2) 15 —

Customer crypto-assets safeguarding liabilities 34 15

Other liabilities 119 129

16 unchanged sentences

Total liabilities and equity $ 17,646 $ 13,736

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these audited consolidated financial statements.

75 | MercadoLibre, Inc.

MercadoLibre, Inc.

Consolidated Statements of Income

19 unchanged sentences

Interest expense and other financial losses (1)

( 378 ) ( 321 ) ( 229 )

Foreign currency losses, net ( 615 ) ( 198 ) ( 109 )

Net income before income tax expense 780 241 81

Net income before income tax expense and equity in earnings of unconsolidated entity 1,553 780 241

Income tax expense ( 569 ) ( 298 ) ( 149 )

Equity in earnings of unconsolidated entity 3 — ( 9 )

Net income (loss) $ 482 $ 83 $ ( 1 )

Net income $ 987 $ 482 $ 83

(1) Includes $ 49 million of loss on debt extinguishment and premium related to the 2028 Notes repurchase recognized in January 2021.

See Note 17 to these audited consolidated financial statements for further detail.

See Note 17 – Loans payable and other financial liabilities to these audited consolidated financial statements for further detail.

Year Ended December 31,

1 unchanged sentence

Basic earning per share

Basic net income (loss)

Available to shareholders per common share $ 9.57 $ 1.67 $ ( 0.08 )

Basic net income available to shareholders per common share $ 19.64 $ 9.57 $ 1.67

Weighted average of outstanding common shares 50,262,302 50,345,353 49,802,993

Diluted earning per share

Diluted net income (loss)

Available to shareholders per common share $ 9.53 $ 1.67 $ ( 0.08 )

Diluted net income available to shareholders per common share $ 19.46 $ 9.53 $ 1.67

Weighted average of outstanding common shares 51,006,860 51,335,621 49,802,993

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these audited consolidated financial statements.

76 | MercadoLibre, Inc.

MercadoLibre, Inc.

Consolidated Statements of Comprehensive Income

3 unchanged sentences

2023 2022 2021

Net income (loss) $ 482 $ 83 $ ( 1 )

Net income $ 987 $ 482 $ 83

Other comprehensive income (loss), net of income tax:

1 unchanged sentence

Unrealized (losses) gains on hedging activities ( 13 ) ( 33 ) 8

Reclassification adjustment for (losses) gains from accumulated other comprehensive loss ( 14 ) ( 1 ) 6

Net change in accumulated other comprehensive income (loss), net of income tax 51 ( 47 ) ( 61 )

Total Comprehensive income (loss) $ 533 $ 36 $ ( 62 )

The accompanying notes are an integral part of these consolidated financial statements.

Tax benefit on unrealized (losses) gains on hedging activities 2 9 —

Reclassification adjustment for losses on hedging activities included in cost of net revenues, interest expense and foreign currency losses ( 11 ) ( 20 ) ( 2 )

Reclassification adjustment for estimated tax benefit on unrealized gains 4 6 1

Total other comprehensive income (loss), net of income tax 174 51 ( 47 )

Total comprehensive income $ 1,161 $ 533 $ 36

The accompanying notes are an integral part of these audited consolidated financial statements.

77 | MercadoLibre, Inc.

MercadoLibre, Inc.

Consolidated Statements of Equity

3 unchanged sentences

capital Treasury

Stock (*) Retained

Earnings Accumulated

2 unchanged sentences

Balance as of December 31, 2020 50 $ — $ 1,860 $ ( 55 ) $ 314 $ ( 468 ) $ 1,651

Changes in accounting standards — — — — ( 5 ) — ( 5 )

Balance as of December 31, 2019 Restated 50 $ — $ 2,068 $ ( 1 ) $ 318 $ ( 407 ) $ 1,978

Capped Call — — ( 307 ) — — — ( 307 )

Common Stock repurchased — — — ( 54 ) — — ( 54 )

Stock-based compensation — restricted shares issued — — 1 — — — 1

Common Stock issued — converted Preferred Shares — — 98 — — — 98

Redeemable convertible preferred stock dividend distribution ($ 9.99 per share)

— — — — ( 3 ) — ( 3 )

Net loss — — — — ( 1 ) — ( 1 )

Other comprehensive loss — — — — — ( 61 ) ( 61 )

Balance as of December 31, 2020 50 $ — $ 1,860 $ ( 55 ) $ 314 $ ( 468 ) $ 1,651

Stock-based compensation — restricted shares issued — — 1 — — — 1

Common Stock issued 1 — 1,520 — — — 1,520

7 unchanged sentences

Balance as of December 31, 2021 50 $ — $ 2,439 $ ( 790 ) $ 397 $ ( 515 ) $ 1,531

Changes in accounting standards (Note 2) — — ( 131 ) — 34 — ( 97 )

Changes in accounting standards — — ( 131 ) — 34 — ( 97 )

Balance as of December 31, 2021 Restated 50 $ — $ 2,308 $ ( 790 ) $ 431 $ ( 515 ) $ 1,434

5 unchanged sentences

Balance as of December 31, 2022 50 $ — $ 2,309 $ ( 931 ) $ 913 $ ( 464 ) $ 1,827

(*) As of December 31, 2022 the Company held 663,950 shares as treasury stock.

The accompanying notes are an integral part of these consolidated financial statements.

Changes in accounting standards (Note 2) — — — — 1 — 1

Balance as of December 31, 2022 Restated 50 $ — $ 2,309 $ ( 931 ) $ 914 $ ( 464 ) $ 1,828

Capped call settlement — — 412 ( 412 ) — — —

Stock-based compensation — restricted shares issued — — 1 — — — 1

Conversion of 2028 Convertible Notes — — ( 952 ) 1,389 — — 437

Common Stock repurchased — — — ( 356 ) — — ( 356 )

Net income — — — — 987 — 987

Other comprehensive Income — — — — — 174 174

Balance as of December 31, 2023 50 $ — $ 1,770 $ ( 310 ) $ 1,901 $ ( 290 ) $ 3,071

(1) As of December 31, 2023 the Company he ld 224,945 shares as treasury stock.

The accompanying notes are an integral part of these audited consolidated financial statements.

78 | MercadoLibre, Inc.

Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 (In millions of U.S.

MercadoLibre, Inc.

Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

(In millions of U.S.

Year Ended December 31,

1 unchanged sentence

Cash flows from operations:

Net income (loss) $ 482 $ 83 $ ( 1 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 987 $ 482 $ 83

Adjustments to reconcile net income to net cash provided by operating activities:

Equity in earnings of unconsolidated entity ( 3 ) — 9

3 unchanged sentences

Accrued interest income ( 311 ) ( 166 ) ( 36 )

Non cash interest expense, convertible notes amortization of debt discount and amortization of debt issuance costs and other charges 137 86 15

Non cash interest expense and amortization of debt issuance costs and other charges 124 138 76

Provision for doubtful accounts 1,050 1,073 435

Brazilian withholding income tax contingency 324 — —

Results on derivative instruments 39 66 —

Settlement of the call option — ( 11 ) —

Stock-based compensation expense - restricted shares 1 1 1

Sale of fixed assets and intangible assets — — 4

LTRP accrued compensation 84 89 130

Results on digital assets at fair value ( 14 ) — —

Long term retention program (“LTRP”) accrued compensation 167 84 89

Deferred income taxes ( 284 ) ( 97 ) ( 29 )

2 unchanged sentences

Credit card receivables and other means of payments ( 1,321 ) ( 1,084 ) ( 1,063 )

Prepaid expenses 3 ( 13 ) 16

Inventories ( 69 ) 114 ( 142 )

13 unchanged sentences

Payments from settlements of derivative instruments ( 58 ) ( 45 ) ( 20 )

Purchases of intangible assets ( 1 ) ( 36 ) —

Changes in principal loans receivable, net ( 1,701 ) ( 1,348 ) ( 345 )

Purchases of intangibles assets — ( 1 ) ( 36 )

Changes in loans receivable, net ( 2,047 ) ( 1,701 ) ( 1,348 )

Investments of property and equipment ( 509 ) ( 454 ) ( 573 )

1 unchanged sentence

Cash flows from financing activities:

Purchase of convertible note capped calls — ( 101 ) ( 307 )

Exercise of Convertible Notes — ( 3 ) —

Payments on repurchase of the 2028 Notes — ( 1,865 ) —

Unwind of convertible note capped calls — 397 —

Proceeds from loans payable and other financial liabilities 24,963 17,017 9,262

Payments on loans payable and other financing liabilities ( 24,841 ) ( 15,933 ) ( 6,782 )

Payments of finance lease obligations ( 20 ) ( 17 ) ( 5 )

Payments of finance lease liabilities ( 33 ) ( 20 ) ( 17 )

Common Stock repurchased ( 356 ) ( 148 ) ( 486 )

Dividends paid of preferred stock — — ( 3 )

Proceeds from issuance of common stock, net — — 1,520

Net cash provided by financing activities 916 1,925 242

Purchase of convertible note capped calls — — ( 101 )

Exercise of Convertible Notes — — ( 3 )

Payments on repurchase of the 2028 Notes — — ( 1,865 )

Unwind of convertible note capped calls — — 397

Net cash (used in) provided by financing activities ( 267 ) 916 1,925

Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents ( 938 ) ( 270 ) ( 153 )

Net (decrease) increase in cash, cash equivalents, restricted cash and cash equivalents ( 285 ) 1,140 1,057

Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents 485 ( 285 ) 1,140

Cash, cash equivalents, restricted cash and cash equivalents, beginning of the year 3,363 3,648 2,508

Cash, cash equivalents, restricted cash and cash equivalents, end of the year $ 3,848 $ 3,363 $ 3,648

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these audited consolidated financial statements.

79 | MercadoLibre, Inc.

Consolidated Statement of Cash Flows

MercadoLibre, Inc.

Consolidated Statements of Cash Flows

For the years ended December 31, 2023, 2022 and 2021

6 unchanged sentences

Non-cash financing activities:

Finance lease obligations $ 18 $ 20 $ 12

Finance lease liabilities $ 99 $ 18 $ 20

Convertible Senior Notes Due 2028 437 — —

Non-cash investing activities:

3 unchanged sentences

Acquired businesses, through call option — — 11

Acquisition of business 2022 2021 (1) 2020 (2)

Acquisition of businesses 2023

Cash and cash equivalents $ — $ — $ 4

2 unchanged sentences

Other non current assets — — 1

Intangible Assets — — —

Fixed Assets — — 1

3 unchanged sentences

Total liabilities assumed — — 26

Net assets acquired (liabilities assumed) — 4 ( 1 )

Net assets acquired — — 4

Goodwill and deferred tax liabilities — — 68

2 unchanged sentences

Customer lists — — 1

Non Compete and Non Solicitation Agreement — — 1

Total purchase price — — 77

2 unchanged sentences

(1) Related to the acquisition of a shipping company and payment services company - See Note 8 – Business combinations, goodwill, and intangible assets.

(2) Related to the acquisition of a software development company.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these audited consolidated financial statements.

80 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

6 unchanged sentences

through Mercado Envios, MercadoLibre facilitates the shipping of goods from the Company and sellers to buyers;

through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their product and services on the web;

through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their products and services on the web;

through Mercado Shops, MercadoLibre allows users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model;

6 unchanged sentences

Principles of consolidation

The accompanying consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S.

The accompanying audited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”).

Investments in entities where the Company holds joint control, but not control, over the investee are accounted for using the equity method of accounting.

These consolidated financial statements are stated in U.S.

dollars, except for amounts otherwise indicated.

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, cost of net revenues and operating expenses, are generated in the Company’s foreign operations.

Long-lived assets, intangible assets and goodwill located in the foreign jurisdictions totaled $ 1,817 million and $ 1,439 million as of December 31, 2022 and 2021, respectively.

Certain comparative figures of these consolidated financial statements were modified to provide more detailed disclosures.

Long-lived assets, intangible assets and goodwill and operating lease right-of-use a ssets located in the foreign jurisdictions totaled $ 2,321 million and $ 1,817 million as of December 31, 2023 and 2022, respectively.

Certain comparative figures of these audited consolidated financial statements were modified to provide more detailed disclosures.

This change has not impacted the total amount of net income and total equity.

1 unchanged sentence

The provision for doubtful accounts amounts to $ 1,050 million, $ 1,073 million and $ 435 million for the years ended December 31, 2023, 2022 and 2021, respectively.

In addition, since December 31, 2023, the Company presents its prepaid expenses balance within “Other assets” in the consolidated balance sheets.

Prepaid expenses amount to $ 27 million and $ 38 million as of December 31, 2023 and 2022, respectively.

Variable Interest Entities (VIEs)

2 unchanged sentences

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 21 of these audited consolidated financial statements for additional detail on the VIEs used for securitization purposes.

See Note 21 – Securitization transactions of these audited consolidated financial statements for additional detail on the VIEs used for securitization purposes.

81 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

Use of estimates

1 unchanged sentence

GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Estimates are used for, but not limited to, accounting for allowance for doubtful accounts and chargeback provisions, inventories valuation reserves, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention plan, fair value of convertible debt, fair value of investments, fair value of derivative instruments, income taxes and contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements.

Estimates are used for, but not limited to, accounting for allowance for doubtful accounts and chargeback provisions, inventories valuation reserves, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of short-term and long-term investments, impairment of long-lived assets, separation of lease and non lease components for aircraft leases, asset retirement obligation, compensation costs relating to the Company’s long term retention program, fair value of digital assets, fair value of certain loans payable and other financial liabilities, fair value of investments, 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.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased, consisting primarily of money market funds, time deposits and sovereign 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 statement 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 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, 2023, 2022 and 2021.

Money market funds and sovereign debt securities are valued at fair value.

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 10 – Fair value measurement of assets and liabilities of these audited consolidated financial statements for further details.

2 unchanged sentences

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

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 statement 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, 2022, 2021 and 2020.

Sovereign debt securities (including Central Bank of Brazil mandatory guarantee) are valued at fair value.

Investments in equity securities without a readily determinable fair value are held at cost less impairment.

and foreign government debt securities (including Central Bank of Brazil mandatory guarantee) are valued at fair value.

See Note 10 – 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, 2023, 2022 and 2021.

Fair value option applied to certain financial instruments

1 unchanged sentence

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

The Company has elected to measure certain financial assets at fair value with impact on the statement of income for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in the consolidated statement of income and consolidated statement of comprehensive income and to better reflect the financial model applied for selected instruments.

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) Brazilian federal government bonds and ii) U.S.

treasury notes.

i) Foreign government debt securities, and ii) U.S.

government debt securities.

Credit card receivables and other means of payments, net

2 unchanged sentences

82 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

The Company is exposed to losses due to credit card fraud and other payment misuse.

4 unchanged sentences

(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 balance sheet.

When all the conditions are met, the Company derecognizes the corresponding financial asset from its consolidated balance sheets.

Based on historical experience to date the Company assessed that it does not hold a significant credit risk exposure in relation to transfer of financial assets with recourse.

8 unchanged sentences

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

Since January 1, 2020, 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.

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 cards receivable and other means of payments.

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.

2 unchanged sentences

This estimate required a complex and high degree of Management’s judgment.

Specifically in regards of the CECL estimate, including year 2022 information provided a wider series of historical data and the credit business showed a growth in related balances and transactions which led Management to continue enhancing the models used to develop this estimate.

Specifically in regards to the CECL estimate, including year 2022 information provided a wider series of historical data and the credit 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 charges.

4 unchanged sentences

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.

83 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

The probability of default is an estimation of the likelihood that a loan receivable will default over a given time horizon.

6 unchanged sentences

For credit cards loans the Company estimates an amortization scheme based on historical information.

Also, since 2022, we have used a one month credit conversion factor (“CCF”) estimated according to terms and conditions, considering the increase in the volume of credit cards portfolio.

Also, for credit cards, since 2022, the Company has used, as applicable, 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.

12 unchanged sentences

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 balance sheet as credit card receivables and other means of payments.

In June 2020, the Company became aware that it had accumulated significant receivables from one such unaffiliated entity in Argentina.

The aging of these receivables exceeded the expected aging for transactions of this kind, hence, the Company recorded a $ 27 million loss on provision for doubtful accounts during the year ended December 31, 2020.

The amounts pending settlement are recognized in the consolidated balance sheets as credit card receivables and other means of payments.

Concentration of credit risk

4 unchanged sentences

Due to the relatively small dollar amount of individual accounts receivable and loans receivable, the Company generally does not require collateral on these balances.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

During the years ended December 31, 2023 and 2022, no single customer accounted for more than 5% of net revenues.

As of December 31, 2023 and 2022, 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 sheet shows the Company’s credit exposure to not more than 10 entities in each of the countries where the Company offers its payments solution.

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 (“USDC”) is accounted for as a financial instrument measured at fair value;

1 unchanged sentence

dollar on demand from the issuer.

USDC balance is included in current other assets of the consolidated balance sheet.

USDC balance is included in current other assets of the consolidated balance sheets.

84 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

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.

1 unchanged sentence

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.

Customer crypto-assets safeguarding assets and liabilities

Staff Accounting Bulletin (“SAB”) No.

121 expresses views of the SEC’s staff regarding the accounting for entities that have obligations to safeguard crypto-assets held for their platform users as well as any agent acting on its behalf in safeguarding the users’ crypto-assets.

As long as an entity is responsible for safeguarding the crypto-assets held for its platform users, including maintaining the cryptographic key information necessary to access the crypto-assets, the SEC’s staff view is that the entity should present a liability on its balance sheet to reflect its obligation to safeguard the crypto-assets held for its platform users.

The entity’s safeguarding liability is measured at initial recognition and each reporting date at the fair value of crypto-assets held for its platform users.

The staff also believes it would be appropriate for the entity to recognize an asset at the same time that it recognizes the safeguarding liability, measured at initial recognition and each reporting date at the fair value of the crypto-assets held for its platform users.

The Company operates a platform that allows its customers to access digital asset exchange and custody services provided by third-party Service Providers (“SPs”) to buy, sell and hold crypto-assets in an account in the customer’s name at the SPs.

The Company does not provide execution, custody or safeguarding services for the customers’ crypto-assets and does not maintain (or ever have access to) the cryptographic key information and wallets necessary to access the crypto-assets, nor does the Company have any legal title or claim to those crypto-assets.

The SPs are responsible for maintaining the internal record-keeping of the customers’ crypto-assets, and for securing and protecting them from loss or theft.

Even though the Company is not responsible for the custody or safeguarding of crypto-assets, the Company has concluded that it is in scope of SAB 121 as:

(i) the Company designed the manner in which the crypto-assets are custodied and the manner in which Mercado Pago Platform (“MP Platform”) users are able to access their crypto-assets through the MP Platform, as well as through its agents;

(ii) the MP Platform users must use the SPs designated by the Company in order to have the crypto-assets reflected in their Mercado Pago wallets;

(iii) MP Platform users that have crypto-assets reflected in their Mercado Pago wallets must access their crypto-assets through the MP Platform;

(iv) while MP Platform users do have a contractual relationship directly with the SPs, they are not able to provide transaction instructions directly to the SPs outside the MP Platform;

and (v) the Company expects that it will be involved in resolving complaints from customers about their crypto-assets holding.

As of December 31, 2023 and 2022, the fair value of the crypto-assets held in the customers’ names at the SPs that the Company recognized on its consolidated balance sheets for both the crypto-asset safeguarding liability and the corresponding safeguarding asset, which are included in “Customer crypto-assets safeguarding liabilities” and “Customer crypto-assets safeguarding assets,” respectively, was $ 34 million and $ 15 million, respectively, which consisted of $ 18 million and $ 6 million of Bitcoin, $ 7 million and $ 5 million of Ether, and $ 9 million and $ 4 million of other crypto-assets, respectively.

Custody services of customers’ crypto-assets is provided by not more than 2 entities in each of the countries where the Company offers its digital assets feature as part of the Mercado Pago wallet.

Property and equipment, net

4 unchanged sentences

During 2023 and 2022, the Company capitalized $ 240 million and $ 202 million , respectively.

85 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Operating lease right-of-use assets and operating lease liabilities

8 unchanged sentences

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

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.

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 operating expenses, and the recorded liabilities are accreted to the future value of the estimated retirement costs.

Goodwill and intangible assets

2 unchanged sentences

Intangible assets with definite 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 ranges from three to twelve years .

their estimated useful lives range from three to twelve 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.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

Digital Assets

The Company accounts for its digital assets, except for the USDC, as indefinite-lived intangible assets, in accordance with ASC 350, Intangibles—Goodwill and Other.

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 cost, net of any impairment losses incurred since acquisition.

The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on the active exchange, indicate that any decrease in the fair values of the digital assets below the carrying values for such assets subsequent to their acquisition will result in a recognition of impairment charges.

The Company considers the lowest price of the digital asset on the active exchange since the acquisition of the asset to perform the impairment analysis.

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.

Please refer to Note 2 – Summary of significant accounting policies – Recently Adopted Accounting Standards for further detail on the adoption of Accounting Standard Update (“ASU”) 2023-08, pursuant to which the Company transitioned from a cost less impairment measurement for its digital assets to a fair value measurement.

Impairment of long-lived assets

8 unchanged sentences

As of December 31, 2023 and 2022, the Company elected to perform the quantitative impairment test for both goodwill and intangible assets with indefinite useful life.

86 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

For the year ended December 31, 2023, the fair values of the reporting units were estimated using the income approach.

Cash flow projections used were based on financial budgets approved by the board of directors.

The Company uses discount rates for each reporting unit in the range of 12.1 % to 21.0 %.

The average discount rate used for 2022 was 15.0 %.

That rate reflected the Company’s estimated weighted average cost of capital.

The Company uses weighted average cost of capital for each reporting unit in the range of 11.5 % to 21.1 %.

Key drivers in the analysis include Average Selling Price (“ASP”), Take Rate defined as marketplace revenues as a percentage of Gross Merchandise Volume (“GMV”), Total Payment Volume Off Platform (“TPV Off”), Off Platform Take Rate defined as off platform revenues as a percentage of TPV Off, Wallet and Point TPV per Payer, Wallet Users over Total Population and Active Point devices.

2 unchanged sentences

No impairment loss has been recognized in the years ended December 31, 2023, 2022 and 2021 as Management’s assessment of the fair value of each reporting unit exceeds its carrying value.

Digital Assets

Impairment losses are recognized in the period in which the impairment is identified.

The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value.

Gains (if any) are not recorded until realized upon sale.

In determining the gain to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.

Intangible assets with indefinite useful life are considered impaired if the carrying amount of the intangible asset exceeds its fair value.

The Company recorded an impairment of digital assets of $ 21 million and $ 9 million as of December 31, 2022 and 2021, respectively.

No impairment loss has been recognized in the year ended December 31, 2020.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

The Company is subject to U.S.

16 unchanged sentences

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, if any, within income tax expense, in the statement of income.

The Company classifies interest and penalties, if any, 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 for open years primarily include the U.S., Argentina, Brazil and Mexico.

The material jurisdictions that are subject to examination by tax authorities primarily include Argentina (for tax year 2017 onwards), the U.S.

(for tax year 2020 onwards), and Brazil and Mexico (for tax year 2018 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 for $ 69 million, $ 36 million and $ 15 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Social Contribution on Gross Revenues

Meli Developers Brasil Ltda., a Brazilian wholly-owned subsidiary of the Company which provides IT services, has been granted access to the Social Contribution on Gross Revenues (“CPRB” according to its Portuguese acronym) Regime, in accordance with Sections 7 to 9 of Law 12,546/2011, up to December 31, 2023.

The CPRB Regime comprises the payment of social security contributions at a 4.5% rate over the gross revenues, as opposed to 20% over the compensation paid to employees.

The Company accounted for the tax benefit netting against product and development technology expenses for $ 24 million and $ 9 million for the years ended December 31, 2023 and 2022, respectively ( no benefit accounted for during the year ended December 31, 2021).

87 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Derivative financial instruments

2 unchanged sentences

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 sheet at fair value except for the derivatives related to the Capped Call Transactions (as defined in Note 17) which are recognized in equity at cost paid.

The effective portion of a 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 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 was 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 earnings in the same period that the interest expense affects earnings.

All outstanding derivatives are recognized in the Company’s consolidated balance sheets at fair value except for the derivatives related to the Capped Call Transactions (as defined in Note 17 – Loans payable and other financial liabilities) which are recognized in equity at cost paid.

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 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 earnings in the same line items as the change in the value of the financial debt due to the hedged risks.

Since the terms of the interest rate swap match the terms of the hedged debt, changes in the fair value of the interest rate swap are offset by changes in the fair value of the hedged debt attributable to changes in interest rates.

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.

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 sheet at fair value, and changes in fair value from these contracts are recorded in other income (expense), net in the consolidated statement of income.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

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 also to the Company’s payments solution and are originated by the amounts due to users held by the Company.

Funds payable to customers relate to the Company’s payments solution and are originated by the amounts due to users held by the Company.

Funds, net of any amount due to the Company by the user, are maintained in the user’s current account until withdrawal is requested by the user.

3 unchanged sentences

Provision for buyer protection program

The Company provides consumers with a buyer protection program (“BPP”) for all transactions completed through the Company’s online payment solution Mercado Pago (except for certain excluded categories).

The Company is exposed to losses under this program given that this program is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance.

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 statement of income.

The charge for the provision for BPP is recognized in sales and marketing expense line of the consolidated statements of income.

See Note 15 – 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 plans is remeasured at fair value.

See Note 16 “Long term retention plan” of these audited consolidated financial statements for more details.

The liability related to the variable portion of the long term retention programs is remeasured at fair value.

See Note 16 – Long term retention program of these audited consolidated financial statements for more details.

Treasury stock

2 unchanged sentences

therefore, the Company uses the quoted market price of the common stock for purposes of determining the fair value of the treasury stock.

See Note 25 of these audited consolidated financial statements for further details.

Comprehensive income (loss)

Comprehensive income (loss) is comprised of two components, net income (loss) and other comprehensive income (loss).

See Note 25 – Share repurchase program of these audited consolidated financial statements for further details.

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MercadoLibre, Inc.

Notes to Consolidated Financial Statements

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 on hedging activities.

Total comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 amounted to $ 533 million, $ 36 million and $( 62 ) million, respectively.

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 losse s on investments classified as available-for-sale, o n hedging activities and the corresponding tax effects.

Total comprehensive income for the years ended December 31, 2023, 2022 and 2021 amounted to $ 1,161 million, $ 533 million and $ 36 million, resp ectively.

Foreign currency translation

6 unchanged sentences

Net foreign currency transaction results are included in the consolidated statements of income under the caption “Foreign currency losses, net”.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

Argentine currency status

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.

2 unchanged sentences

Argentina’s annual inflation rate for the years ended December 31, 2023, 2022 and 2021 was 211.4 %, 94.8 % and 50.9 %, respectively.

The Company uses the Argentina’s official exchange rate to account for transactions in the Argentine segment, which as of December 31, 2022, 2021 and 2020 was 177.16 , 102.72 and 84.15 , respectively, against the U.S.

For the years ended December 31, 2022, 2021 and 2020 the Argentina’s annual depreciation of its local currency against the U.S.

dollar was 72.5 %, 22.1 % and 40.5 %, respectively.

The Company uses Argentina’s official exchange rate to account for transactions in the Argentine segment, which as of December 31, 2023,2022 and 2021 was 808.45 , 177.16 and 102.72 , respectively, against the U.S.

For the years ended December 31, 2023, 2022 and 2021, Argentina’s official exchange rate against the U.S.

dollar increased 356.3 %, 72.5 % and 22.1 %, respectively.

On December 10, 2023, a new Government took office with the aim to boost a deregulation of the Argentine economy and a reduction of the fiscal deficit mainly through cutting spending (including a reduction of different type of subsidies).

On December 13, 2023, the Argentine Government devalued the Argentine Peso from 366.45 to 799.95, which has generated an acceleration of the monthly inflation rate (25.5% in December 2023 and 20.6% in January 2024).

The comprehensive program pursued by the new Government includes reforms in the economy, justice, labor and social security, and tax among other areas which should be passed by the Congress.

The Company is permanently monitoring the evolution of the aforementioned program to determine the possible impacts that these new measures could have on the Company´s business and financial position.

The following table sets forth the assets, liabilities and net assets of the Company’s Argentine subsidiaries and consolidated VIEs, before intercompany eliminations, as of December 31, 2023 and December 31, 2022:

3 unchanged sentences

Net assets $ 1,420 $ 819

The following table provides information relating to net revenues and net income before income tax expense for the years ended December 31, 2022, 2021 and 2020 of the Company’s Argentine subsidiaries and consolidated VIEs:

The following table provides information relating to net revenues and direct contribution (see Note 9 – Segments of these audited consolidated financial statements for definition of direct contribution) for the years ended December 31, 2023, 2022 and 2021 of the Company’s Argentine subsidiaries and consolidated VIEs:

Year Ended December 31,

2 unchanged sentences

Net revenues $ 3,240 $ 2,500 $ 1,531

Net income before income tax expense 699 389 185

Direct contribution 1,403 1,012 533

89 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Argentine exchange regulations

3 unchanged sentences

dollar denominated securities in Argentina (i.e.

shares, sovereign debt) using Argentine peso, and subsequently sells the securities for U.S.

shares, sovereign debt) using Argentine Pesos, and subsequently sells the securities for U.S.

dollars, in Argentina, to access U.S.

2 unchanged sentences

In recent years, the Blue Chip Swap Rate has been higher than Argentina’s official exchange rate.

As of December 31, 2022, the spread of the Blue Chip Swap was 94.2 % (see Note 25 of these audited consolidated financial statements.)

As of December 31, 2023 and 2022, the spread of the Blue Chip Swap was 20.4 % and 94.2 %, respectively (see Note 25 – Share repurchase program of these audited consolidated financial statements.) As of the issuance date of these audited consolidated financial statements the spread of the Blue Chip Swap was 30.9 %.

As part of the exchange controls, since 2019, the Argentine government imposes a tax on the acquisition of foreign currency through the official exchange market in certain circumstances.

On July 24, 2023, through the Executive Power Decree No.

377/2023, the Argentine government extended the application of this tax to the following cases:

(i) certain services acquired from abroad or services rendered by foreign residents in Argentina (i.e.

technical, legal, accounting, management, advertising, engineering, audiovisual services, among others), which will be subject to a 25% tax rate, (ii) freight and other transportation services for import and export of goods, which will be subject to a 7.5% tax rate;

and (iii) imported goods, which will be subject to a 7.5% tax rate, with certain exemptions (such as fuels and products of the basic food basket).

Revenue recognition

2 unchanged sentences

Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require judgment.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

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:

a) Commerce transactions:

• Revenues from intermediation services derived from final value fees paid by sellers.

Revenues related to final value 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).

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 a buyer elects to receive the item through the Company’s shipping service and the service is rendered to the customer.

2 unchanged sentences

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 performance product ads and display advertising, are recognized based on the number of clicks or impressions.

■ Revenues from advertising services provided to sellers, vendors, brands and others, through performance products (Product Ads and Brand 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.

b) Fintech transactions:

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MercadoLibre, Inc.

Notes to Consolidated Financial Statements

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, and revenues derived from insurtech transactions, are recognized once the transaction is considered completed, when the payment is processed by the Company, net of rebates granted.

The Company also earns revenues as a result of offering financing 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, t he financing component is separated from the revenue amount and is recognized over the financing period using the interest method .

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.

The aggregate gain included in “Fintech services” revenues arising from financing transactions and sales of financial assets, net of the costs recognized on sale of credit card receivables, is $ 1,440 million, $ 1,054 million and $ 575 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

• Revenues from sale of mobile points of sale products are recognized when control of the good is transferred.

• Revenues from interest earned on loans and advances granted to merchants and consumers, and credit card transactions are recognized over the period of the lo an and are based on effective interest rates.

■ Revenues from sale of mobile point of sale products are recognized when control of the good is transferred.

■ Revenues from interest earned on loans and advances 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.

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, distinguishing between each of the services provided and allocating revenues based on their respective estimated selling prices.

Benefits granted to customers under the Company’s loyalty program are accounted for as material rights and therefore the allocated amount of revenue is deferred until the customers exercise their material rights or until expiration, whichever occurs first.

Revenues recognized under ASC 606 “Revenue from contracts with customers” amounted to $ 10,487 million, $ 7,450 million and $ 5,710 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Revenues recognized under ASC 860 “Transfers and Servicing” and ASC 310 “Receivables” amounted to $ 3,986 million, $ 3,087 million and $ 1,359 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Contract balances

2 unchanged sentences

Accounts receivable and credit card receivables and other means of payments are presented net of allowance for doubtful accounts and chargebacks of $ 42 million and $ 25 million as of December 31, 2023 and 2022, respectively.

The allowance for doubtful accounts with respect to the Company ’ s loans receivable amounts to $ 1,112 million (which includes $ 8 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the Consolidated Balance Sheet) and $ 435 million as of December 31, 2022 and 2021, respectively.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

See Note 7 – 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.

Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the year in accordance with ASC 606.

2 unchanged sentences

As of December 31, 2023, total deferred revenue was $ 29 million , mainly due to fees related to classified advertising services billed and loyalty programs that are expected to be recognized as revenue in the coming months.

The Company’s subsidiaries in Brazil, Argentina and Colombia are subject to certain sales taxes which are classified as cost of net revenues and totale d $ 790 million, $ 569 million and $ 325 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The Company’s subsidiaries in Brazil, Argentina and Colombia are subject to certain sales taxes which are classified as cost of net revenues and totaled $ 1,119 million, $ 790 million and $ 569 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Brazilian Tax Reform

In December 2023 the Brazilian National Congress approved the 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 27% according to current studies, 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 the Brazilian Tax Legislation, reducing tax litigation between taxpayers and the Government.

The next step is to start discussions over the supplementary regulation that will detail the new tax system.

These discussions should take place in the Brazilian Congress in 2024 and will enable the taxpayers to better understand the impacts of all changes in their operations.

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MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Advertising costs

3 unchanged sentences

Recently Adopted Accounting Standards

On March 31, 2022, the SEC released the Staff Accounting Bulletin (SAB) No.

This SAB expresses views of the SEC’s staff regarding the accounting for entities that have obligations to safeguard crypto-assets held for their platform users as well as any agent acting on its behalf in safeguarding the users’ crypto-assets.

The entity’s safeguarding liability should be measured at initial recognition and each reporting date at the fair value of crypto-assets held for its platform users.

This interpretation is effective the first interim or annual period ending after June 15, 2022, with retrospective application as of the beginning of the fiscal year to which the interim or annual period relates.

The SPs are responsible for securing the customers’ crypto-assets and protecting them from loss or theft.

Even though the Company is not responsible for the custody or safeguarding of crypto-assets, the Company has concluded that it is in scope of SAB 121 as:

(ii) the MP Platform users must use the SPs designated by the Company in order to have the crypto-assets reflected in their Mercado Pago wallets;

(iii) MP Platform users that have crypto-assets reflected in their Mercado Pago wallets must access their crypto-assets through the MP Platform;

(iv) while MP Platform users do have a contractual relationship directly with the SPs, they are not able to provide transaction instructions directly to the SPs outside the MP Platform;

and (v) the Company expects that it will be involved in resolving complaints from customers about their crypto-assets holding.

As of December 31, 2022, the fair value of the crypto-assets held in the customers’ names at the SPs that the Company recognized on its balance sheet for both the crypto-asset safeguarding liability and the corresponding safeguarding asset, which are included in “Customer crypto-assets safeguarding liabilities” and “Customer crypto-assets safeguarding assets,” respectively, in the consolidated balance sheets, was $ 15 million ($ 4 million as of January 1, 2022), which consisted of $ 6 million of Bitcoin, $ 5 million of Ether and $ 4 million of other crypto-assets.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

On August 5, 2020, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update (“ASU”) 2020-06 “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The amendments in this update address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity.

For convertible instruments, accounting models for specific features are removed and amendments to the disclosure requirements are included.

For contracts in an entity’s own equity, the update simplifies the settlement assessment by removing some requirements.

Additionally, the amendments in this update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments.

The Company adopted this standard effective January 1, 2022, resulting in an increase of the carrying value of the 2028 Notes of $ 123 million, a decrease of deferred tax liability of $ 26 million and a decrease in the beginning balance of additional paid in capital of $ 131 million and an increase of retained earnings of $ 34 million.

In addition, the Company reduced its reported interest expense and is required to use the if-converted method for calculating diluted earnings per share.

Accounting Pronouncements Not Yet Adopted

On October 28, 2021, the Financial Accounting Standards Board (“FASB”) issued the ASU 2021-08 “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”.

The amendments in this update improve comparability for the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by specifying for all acquired revenue contracts regardless of their timing of payment (1) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and (2) how to measure those contract assets and contract liabilities.

The amendments provide consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination.

The Company adopted this standard effective as of January 1, 2023 and it did not have a material impact on the Company’s financial statements.

On March 31, 2022, the FASB issued the ASU 2022-02 “Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326):

Financial Instruments – Credit Losses”, which eliminates the accounting guidance on TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

In addition, the guidance requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases.

The amendments should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption.

The Company adopted this standard effective as of January 1, 2023 and it did not have a material impact on the Company’s financial statements.

On September 29, 2022, the FASB issued the ASU 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.” The amendments in this update require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about their obligations outstanding at the end of the reporting period, including a rollforward of those obligations.

Disclosure of Supplier Finance Program Obligations”.

The amendments in this update require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about their obligations outstanding at the end of the reporting period, including a rollforward of those obligations.

The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023.

The Company adopted this standard effective as of January 1, 2023, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The guidance should be applied retrospectively to all periods in which a balance sheet is presented, except for the rollforward requirement, which should be applied prospectively.

The Company and certain financial institutions participate in a supplier finance program (“SFP”) that enables certain of Company’s suppliers, at their own election, to request the payment of their invoices to the financial institutions earlier than the terms stated in Company’s payment policy.

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 of 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, 2022, the program amounted to $ 206 million, out of which $ 169 million have been utilized by suppliers and are included in the balance sheet within accounts payable and accrued expenses line.

On June 30, 2022, the FASB issued ASU 2022-03 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The amendments in this update clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring its fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires additional disclosures for equity securities subject to contractual sale restrictions.

The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years and should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption.

The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

On March 31, 2022, the FASB issued ASU 2022-02 “Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326):

Financial Instruments – Credit Losses,” which eliminates the accounting guidance on TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

In addition, the guidance requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases.

The amendments in this update are effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years.

The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

As of December 31, 2023 and 2022, the obligations outstanding that the Company has confirmed as valid to the financial institutions amounted to $ 381 million and $ 227 million, respectively, and are included in the consolidated balance sheets within accounts payable and accrued expenses line.

On December 13, 2023, the FASB issued the ASU 2023-08 “Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets”.

The amendments in this update improve the accounting for and disclosure of certain crypto assets.

It applies to assets that meet all of the following criteria:

meet the definition of intangible assets as defined in the Codification, do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets, are created or reside on a distributed ledger based on blockchain or similar technology, are secured through cryptography, are fungible and are not created or issued by the reporting entity or its related parties.

An entity is required to subsequently measure assets that meet those criteria at fair value with changes recognized in net income each reporting period.

The amendments in this update are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance).

If the Company adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period.

The amendments require a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which the Company adopts the amendments.

The Company adopted this standard effective January 1, 2023, resulting in an increase of the carrying value of the digital assets of $ 15 million, a gain of $ 14 million recognized within the “General and administrative” line item and an increase in the beginning balance of retained earnings of $ 1 million.

The digital assets are presented within “Intangible assets at fair value” in the consolidated balance sheets.

92 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Summary of significant accounting policies (continued)

On October 28, 2021, the FASB issued the ASU 2021-08 “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The amendments in this update improve comparability for the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by specifying for all acquired revenue contracts regardless of their timing of payment (1) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and (2) how to measure those contract assets and contract liabilities.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

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, 2023:

Digital asset name Cost basis Fair value Number of units held

(in millions, except for number of units held)

Bitcoin $ 6 $ 17 412.7

Ether 3 7 3,041.6

The following table summarizes the digital assets rollforward activity during the year ended December 31, 2023:

December 31, 2023

(in millions)

Balance at beginning of year (1)

Adoption of ASU 2023-08 1

Gains included in net income 14

Balance at end of year (2)

(1) Included in Intangible assets, net as of December 31, 2022.

(2) Included in Intangible assets at fair value as of December 31, 2023.

The method used by the Company for determining the cost basis of its digital assets is the weighted average price method.

Accounting Pronouncements Not Yet Adopted

On November 27, 2023, the FASB issued the ASU 2023-07 “Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures”.

The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The guidance should be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements.

On December 14, 2023, the FASB issued the 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 is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements.

FINTECH REGULATIONS

Regulations issued by CBA

In January 2020, the CBA enacted regulations related to payment service providers that applies to fintech companies that are not financial institutions, but nevertheless provide payment services in at least one of the processes of the payments system and offer a payment account to its customers.

On July 7, 2020, the CBA approved the registration of the Argentine subsidiary in the registry for payment service providers who offer payment accounts (“PSPOCP” according to its Spanish acronym).

These regulations set forth certain rules that require PSPOCP to, among other things, (i) deposit and maintain users’ funds in specific local bank accounts, payable on demand;

(ii) implement a monthly reporting regime with the CBA;

(iii) segregate information related to users’ investments funds;

(iv) segregate the Company’s funds from users’ funds;

and (v) to comply with transparency provisions regarding PSPOCP’s advertising material and documents.

As of December 31, 2022 and 2021, in accordance with the regulation, the Company held customer’s funds for the amount of $ 496 million and $ 449 million, respectively, representing the total amount of funds in payment accounts of customers, payable to them on demand.

New regulations issued by the Central Banks and other regulators of the countries where the Company operates its Fintech business are described below.

During March 2022, the Central Bank of Brazil announced new rules for payment institutions based on their size and complexity and raised standards for required capital.

The new framework, which was effective starting in July 2023 with full implementation by January 2025, will extend the application of the rule regarding proportionality of regulatory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by payment institutions.

The new rules require a gradual increase in regulatory capital requirements for the Company’s regulated Brazilian subsidiaries until 2025:

6.75% from July 2023, 8.75% from January 2024 and 10.50% from January 2025.

93 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

On December 30, 2021, the board of the CBA issued a regulation by which financial institutions must set up a reserve of 100 % of the customer funds deposited by payment service providers that offer payment accounts.

According to this new regulation, from January 1, 2022, 100 % of the customer funds that have not been invested by users in Mercado Fondo, have remained deposited at financial institutions, and such financial institutions deposited 100% of those funds at the CBA, and available for users.

On January 13, 2022, the Company challenged such regulation, and sought an injunction to suspend the effects pending resolution of the challenge.

On March 22, 2022, the CBA rejected the Company’s challenge.

On April 22, 2022, the Company sought a new preliminary injunction with the courts, in order to suspend the effects of the regulation until a final decision on the merits is granted on the case to be initiated within 90 days following that request, which was rejected by the court.

The Company appealed such decision and also filed a motion to vacate the regulation issued by CBA.

On September 22, 2022, the CBA modified the aforementioned resolution and established that a percentage of the customer funds deposited in financial institutions by payment service providers that offer payment accounts may be invested in Argentine treasury bonds and do not necessarily have to remain deposited at the CBA.

Under the amended regulation, financial institutions in which the Company deposits customer funds may invest up to 45 % of funds that have not already been invested by users in Mercado Fondo in Argentine, peso-denominated treasury bonds due May 23, 2027.

On September 22, 2022, the CBA modified the aforementioned resolution and established that financial institutions in which the Company deposits customer funds may invest up to 45 % of funds that have not already been invested by users in Mercado Fondo in Argentine, peso-denominated treasury bonds due May 23, 2027.

As a result of the amended regulation, the Company withdrew on September 5, 2022 the cases it had originally filed challenging the December 30, 2021 regulation.

Regulations issued by Central Bank of Brazil

On November 1, 2018, the Company obtained approval from the Central Bank of Brazil to operate as an authorized payment institution.

With this authorization, Mercado Pago in Brazil is subject to the supervision of the Central Bank of Brazil and must fully comply with all obligations established by current regulations.

Among other obligations, the regulations require authorized payment institutions to hold any electronic balance in a payment institution account in either a specific account of the Central Bank of Brazil that does not pay interest or Brazilian federal government bonds registered with the “Sistema Especial de Liquidacao e Custodia.” 100 % of electronic funds were required to be deposited as of December 31, 2022 and 2021 .

As of December 31, 2022 and 2021, in accordance with the regulation, the Company held $ 1,377 million and $ 898 million, respectively, deposited in Brazilian federal government bonds as a mandatory guarantee (the “Central Bank of Brazil mandatory guarantee”).

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Fintech Regulations (continued)

During March 2022, the Central Bank of Brazil announced new prudential rules for payment institutions based on their size and complexity and raising standards for required capital.

The new framework, which will be effective sta rting in July 2023 with full implementation by January 2025, will extend the application of the rule regarding proportionality of regul atory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by payment institutions.

The Company is assessing the effects that the new rules may have on its regulated Brazilian subsidiaries.

Chilean subsidiaries regulated by Commission for the Financial Market

On November 5, 2021, by means of exempt resolution No.

6312, the Chilean Commission for the Financial Market (Comisión para el Mercado Financiero – “CMF”) authorized Mercado Pago Emisora S.A.

to carry out the exclusive business of non-bank issuer of payment cards with provision of funds.

Mercado Pago Emisora S.A.

became an institution regulated by the CMF, being obligated, among other things, to:

(i) deliver information on its financial and operational management on a regular basis;

(ii) maintain certain minimum capital required;

(iii) set up a determined liquidity reserve;

and (iv) deposit and maintain users’ funds in specific banks’ accounts.

On November 9, 2021, by means of exempt resolution No.

6358, the CMF authorized MercadoPago S.A.

to carry out the exclusive business of payment card operator.

With this authorization, Mercado Pago S.A.

became an institution regulated by the CMF, being obliged, among other things, to:

(i) provide information on its financial and operational management on a regular basis:

(ii) maintain certain minimum capital required;

and (iii) constitute a determined liquidity reserve.

On October 12, 2022, the Chilean Congress approved the Fintech and Open-Banking Law Project, which was published on January 4, 2023, and and came into effect on February 3, 2023.

This law established a regulatory framework for certain technological financial services that did not have their own legal framework.

These services are:

(i) Alternative Transaction Systems, (ii) Crowdfunding Financing Platform, (iii) Financial Instrument Intermediation, (iv) Order Routing, (v) Credit Advisory and (vi) Investment Advisory.

In addition, an Open Finance System is created to allow financial service providers to exchange custom er financial information.

After the Fintech Law comes into effect, the CMF will have 18 months to issue secondary regulation .

Mercado Pago Emisora S.A.

w ill actively participate in the discussions and workshops at the CMF with the other players in the industry.

As of December 31, 2022 and 2021, in accordance with the regulations, the Chilean subsidiaries held $ 53 million and $ 21 million, respectively, as restricted cash and cash equivalents related to liquidity reserves.

Mexican subsidiary regulated by National Banking and Securities Commission

On August 24, 2023, the CBA issued Communication “A” 7825, which states that payment service providers who offer payment accounts (“PSPOCP” according to its Spanish acronym) must allocate in full to their clients any compensation received from financial institutions for investing clients’ funds held in deposit accounts into Argentine treasury bonds.

Since August 25, 2023, MercadoLibre S.R.L.

is not receiving any compensation from financial institutions for clients’ funds held in deposit account.

As a consequence, Communication “A” 7825 has no applicable effect for MercadoLibre S.R.L.

On September 14, 2023, the CBA issued Communication “A” 7861 establishing that starting on December 1, 2023, DEBIN (debit immediate), the main and simple funding source of Mercado Pago users’ accounts, will be suspended and replaced with a pull transfer method that requires the consent of the client outside of Mercado Pago’s environment before the first use.

After several extensions, on January 11, 2024, the CBA issued a new regulation establishing that the suspension of DEBIN must be effective starting on April 30, 2024.

On April 29, 2022, MercadoLibre, S.A.

1 unchanged sentence

MercadoLibre, S.A.

de C.V., Institución de Fondos de Pago Electrónico became a regulated financial entity, effective on May 11, 2022, and is subject to the supervision and jurisdiction of the relevant Mexican financial regulators, including but not limited to the CNBV and the Central Bank of Mexico.

de C.V., Institución de Fondos de Pago Electrónico became a regulated financial entity towards third parties, effective on May 11, 2022 duly published in the Official Gazette, and is subject to the supervision and jurisdiction of the relevant Mexican financial regulators, including but not limited to the National Commission for the Protection and Defense of Users of Financial Services, CNBV and the Central Bank of Mexico.

Amongst the regulatory obligations to which Electronic Payment Institutions are subject, the following are noteworthy:

a) maintain minimum capital requirements, b) maintain sufficient reserves in high-quality liquid assets (e.g.

cash, treasury bills, etc.), so as to be able to redeem, on par, the funds held on behalf of the clients, c) comply with anti-money laundering and countering of terrorism financing, d) develop and maintain sound cybersecurity and information security policies, including but not limited to the performance of recurrent vulnerability tests and the deployment of strict infrastructure controls.

As of December 31, 2022, in accordance with the regulations, the Mexican subsidiary held $ 248 million as restricted cash and cash equivalents related to liquidity reserves.

cash, treasury bills, etc.), so as to be able to redeem, on par, the funds held on behalf of the clients, c) comply with anti-money laundering and countering of terrorism financing regulations, d) develop and maintain sound cybersecurity and information security policies, including but not limited to the performance of recurrent vulnerability tests and the deployment of strict infrastructure controls.

On October 12, 2022, the Chilean Congress approved the Fintech and Open-Banking Law Project, which was published on January 4, 2023, and came into effect on February 3, 2023.

This law established a regulatory framework for certain technological financial services that did not have their own legal framework.

These services are:

(i) Alternative Transaction Systems, (ii) Crowdfunding Financing Platforms, (iii) Financial Instrument Intermediation, (iv) Order Routing, (v) Credit Advisory, and (vi) Investment Advisory.

Pursuant to this law, Mercado Pago Crypto S.A.

shall file a license request with the Commission for the Financial Market (“CMF” according to its Spanish acronym) in order to continue offering Order Routing services through the “buy, hold and sell” product launched in 2023 in collaboration with Ripio Chile SpAp.

The rules governing the specifics of this filing and the license that CMF must grant, were issued on January 12, 2024, giving Mercado Pago Crypto S.A.

until February 2025 to file the license request.

In addition, an Open Finance System is created to allow financial service providers to exchange customer financial information.

The CMF has until June 3, 2024 to issue secondary regulation.

On April 27, 2023, the CMF authorized the merger of Mercado Pago Operadora S.A.

(formerly known as “MercadoPago S.A.”) and Red Procesadora de Pagos Limitada, effective on May 1, 2023.

This merger allows Mercado Pago Operadora S.A.

to extend the processing of transactions and enable businesses and entrepreneurs in Chile the opportunity to access the Company’s ecosystem of Fintech services.

In June 2023, MercadoPago S.A.

Compañía de Financiamiento obtained a license to operate as a financial institution in Colombia, and therefore is able to offer credits, digital accounts, investments and prepaid cards.

We expect this new company to be operational by the first quarter of 2024 and be subject to minimum capital, reporting, consumer protection and risk management requirements.

94 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Fintech Regulations (continued)

The Company has started the process of incorporating a new company (“MercadoPago S.A.

Compañía de Financiamiento”) and requesting a license to act as a financial institution, and will therefore be able to offer credits, digital accounts, investments and prepaid cards without any limitation upon obtaining such license.

The new entity has a minimum capital requirement, which has been paid-in and is effectively restricted cash until the Financial Superintendence of Colombia (Superintendencia Financiera de Colombia) authorizes the operation of the company.

We expect this new company to be operational by the second half of 2023.

As of December 31, 2022, in accordance with the regulations, the Colombian subsidiary held $ 6 million as restricted cash and cash equivalents related to the minimum capital requirements.

Net income (loss) per share

Basic earnings per share for the Company’s common stock is computed by dividing, net income (loss) available to common shareholders for the period by the weighted average number of common shares outstanding during the year.

On August 24, 2018, and August 31, 2018, the Company issued an aggregate principal amount of $ 880 million of 2.00 % Convertible Senior Notes due 2028 (please refer to Note 17 to these consolidated financial statements for discussion regarding these debt notes).

The conversion of these notes is included in the calculation for diluted earnings per share utilizing the “if converted” method.

In July 2023, MercadoPago Uruguay S.R.L.

obtained the approval by the BCU to operate as an Electronic Money Issuing Institution (“IEDE”) facilitating electronic money transfers.

On October 1, 2023, MercadoPago Uruguay S.R.L.

started operations, and since then, must adhere to regulations regarding the placement of user funds, including the obligation to deposit and maintain these funds in designated local bank accounts to guarantee the availability of balances in each user’s digital account.

In October 2023, MercadoPago Uruguay S.R.L.

was authorized by the BCU, subject to the terms of the regulations, to invest its user funds in short-term investments, including “overnight” bank deposits, leveraging results and assuming associated risks.

On November 10, 2022, the Central Reserve Bank of Peru (“BCRP”) enacted regulations related to the card payment processing system that applies to issuers, acquirers and payment facilitators.

On January 27, 2023, MercadoPago Perú S.R.L.

was registered by the BCRP as a payment facilitator entity, allowing it to (a) affiliate merchants to the card payment system, (b) offer POS, and (c) transmit or process card payment orders and /or participate in the process of settlement to the merchants affiliated.

NET INCOME PER SHARE

Basic earnings per share for the Company’s common stock is computed by dividing, net income for the period by the weighted average number of common shares outstanding during the year.

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 2022.

For the year ended 2021, the effect of the conversion of the 2028 Notes would have been antidilutive and, as a consequence, it was not factored into the calculation of diluted earnings per share.

Accordingly, conversion of these 2028 Notes is not assumed for purposes of computing diluted earnings per share if the effect is antidilutive.

Additionally, on March 29, 2019, the Company issued Preferred Stock.

The conversion of Preferred Stock was included in the calculation for diluted earnings per share utilizing the “if converted” method.

Accordingly, conversion of the redeemable convertible preferred stock was not assumed for purposes of computing diluted earnings per share if the effect was antidilutive.

The denominator for diluted net income (loss) per share for the years ended on December 31, 2022, 2021 and 2020 does not include any effect from the 2028 Notes Capped Call Transactions (as defined in Note 17) because it would be antidilutive.

In the event of conversion of any or all of the 2028 Notes, the shares that would be delivered to the Company under the Capped Call Transactions (as defined in Note 17) are designed to partially neutralize the dilutive effect of the shares that the Company would issue under the Notes.

For the years ended 2021 and 2020, the effects of the conversion of the Notes and the redeemable convertible preferred stock would have been antidilutive and, as a consequence, they were not factored into the calculation of diluted earnings per share.

Net income (loss) per share of common stock is as follows for the years ended December 31, 2022, 2021 and 2020:

The denominator for diluted net income per share for the years ended on December 31, 2023, 2022 and 2021 did not include any effect from the capped call transactions entered into by the Company with certain financial institutions with respect to shares of the Company’s common stock (“2028 Notes Capped Call Transactions”), which were settled on September 1, 2023, because it would be antidilutive.

See Note 17 – Loans payable and other financial liabilities to these consolidated financial statements for more details regarding the 2028 Notes and the 2028 Notes Capped Call Transactions.

Net income per share of common stock is as follows for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31,

1 unchanged sentence

Basic Diluted Basic Diluted Basic Diluted

Net income (loss) per common share (*) $ 9.57 $ 9.53 $ 1.67 $ 1.67 $ ( 0.08 ) $ ( 0.08 )

Net income per common share (1)

$ 19.64 $ 19.46 $ 9.57 $ 9.53 $ 1.67 $ 1.67

Numerator (in millions):

Net income (loss) $ 482 $ 482 $ 83 $ 83 $ ( 1 ) $ ( 1 )

Effect of dilutive Convertible Senior Notes — 7 — — — —

Dividends on preferred stock — — — — ( 3 ) ( 3 )

Net income (loss) corresponding to common stock $ 482 $ 489 $ 83 $ 83 $ ( 4 ) $ ( 4 )

Weighted average of common stock outstanding for Basic earnings per share 50,345,353 50,345,353 49,802,993 — 49,740,407 —

Net income $ 987 $ 987 $ 482 $ 482 $ 83 $ 83

Effect of dilutive 2028 Notes — 6 — 7 — —

Net income available to common stock $ 987 $ 993 $ 482 $ 489 $ 83 $ 83

Weighted average of common stock outstanding for earnings per share 50,262,302 50,262,302 50,345,353 50,345,353 49,802,993 49,802,993

Adjustment for assumed conversions — 744,558 — 990,268 — —

Adjusted weighted average of common stock outstanding for Diluted earnings per share — 51,335,621 — 49,802,993 — 49,740,407

Adjusted weighted average of common stock outstanding for earnings per share 50,262,302 51,006,860 50,345,353 51,335,621 49,802,993 49,802,993

(1) Figures have been calculated using non-rounded amounts.

95 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

2 unchanged sentences

(In millions)

Cash and cash equivalents

Cash in bank accounts $ 1,458 $ 1,160

4 unchanged sentences

Total cash and cash equivalents 2,556 1,910

Restricted cash and cash equivalents

Securitization transactions (1)

Foreign government debt securities (Central Bank of Brazil mandatory guarantee) 114 158

Bank account (Argentine Central Bank regulation) 496 449

Bank account (Mexican National Banking and Securities Commission regulation) 9 —

Cash in bank accounts (Argentine Central Bank regulation) 309 496

Cash in bank accounts (Mexican National Banking and Securities Commission regulation) 91 9

Time deposits (Mexican National Banking and Securities Commission regulation) 314 239

Bank account (Chilean Commission for the Financial Market regulation) 4 21

Cash in bank accounts (Chilean Commission for the Financial Market regulation) 42 4

Time deposits (Chilean Commission for the Financial Market regulation) 54 49

Money market (Secured lines of credit guarantee) 7 33

Bank account (Financial Superintendence of Colombia regulation) 1 —

Cash in bank accounts (Central Bank of Uruguay mandatory guarantee) 1 —

Time deposits (Central Bank of Uruguay mandatory guarantee) 1 —

Money market (Central Bank of Uruguay mandatory guarantee) 2 —

Foreign government debt securities (Central Bank of Uruguay mandatory guarantee) 2 —

Cash in bank accounts (Financial Superintendence of Colombia regulation) — 1

Money market (Financial Superintendence of Colombia regulation) — 5

1 unchanged sentence

Total cash, cash equivalents, restricted cash and cash equivalents (2)

Short-term investments

$ 3,848 $ 3,363

government debt securities $ 1,009 $ 558

Foreign government debt securities (Central Bank of Brazil mandatory guarantee) 1,219 602

Foreign government debt securities (3)

Time deposits (4)

Corporate debt securities 5 —

Total short-term investments $ 3,480 $ 2,339

Long-term investments

government debt securities $ — $ 175

1 unchanged sentence

Securitization transactions (1)

Corporate debt securities 25 —

Equity securities held at cost 58 56

Total long-term investments $ 162 $ 322

(*) As of December 31, 2022 and 2021, the time deposits in excess of $ 100 thousand, are in majority foreign deposits.

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

(1) Investments 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.

(3) As of December 31, 2023 and 2022, includes $ 2,283 million and $ 1,219 million considered restricted due to Central Bank of Brazil mandatory guarantee.

Also, as of December 31, 2023, includes $ 6 million that guarantees a line of credit and is considered restricted.

(4) As of December 31, 2023 and 2022, the time deposits in excess of $ 100 thousand, are in majority foreign deposits.

96 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

2 unchanged sentences

(In millions)

Users $ 91 $ 72

Advertising 32 24

Others debtors 21 10

Accounts receivable $ 177 $ 144

Allowance for doubtful accounts ( 21 ) ( 14 )

1 unchanged sentence

The following table summarizes the allowance for doubtful accounts activity during the years ended December 31, 2023, 2022 and 2021:

Balance at beginning of year Net charged to Net income (loss) Charges Utilized/ Currency translation adjustments/ Write-offs and other adjustments Balance at end of year

(In millions)

Allowance for doubtful accounts

Year ended December 31,

Year ended December 31, 2021 7 4 ( 3 ) 8

Year ended December 31, 2022 8 9 ( 3 ) 14

2023 2022 2021

(In millions)

Balance at beginning of year $ 14 $ 8 $ 7

Net charged to Net income 22 9 4

Charges utilized/ Currency translation adjustments/ Write-offs and other adjustments ( 15 ) ( 3 ) ( 3 )

Balance at end of year $ 21 $ 14 $ 8

Credit card receivables and other means of payments, net

5 unchanged sentences

97 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Balance sheet components (continued)

The following table summarizes the allowance for chargebacks and the allowance for doubtful accounts activity during the years ended December 31, 2022, 2021 and 2020:

Balance at beginning of year Net charged (credited) to Net income (loss) Charges Utilized/ Currency translation adjustments/ Write-offs and other adjustments Balance at end of year

(In millions)

Allowance for chargebacks

Year ended December 31, 2020 $ 11 $ 54 $ ( 47 ) $ 18

Year ended December 31, 2021 18 24 ( 28 ) 14

Year ended December 31, 2022 14 13 ( 16 ) 11

Allowance for doubtful accounts

Year ended December 31, 2020 $ — $ 36 $ ( 12 ) $ 24

The following tables summarize the allowance for chargebacks and the allowance for doubtful accounts activity during the years ended December 31, 2023, 2022 and 2021:

Year ended December 31,

2023 2022 2021

Allowance for chargebacks (In millions)

Balance at beginning of year $ 11 $ 14 $ 18

Net charged to Net income 35 13 24

Charges utilized/ Currency translation adjustments/ Write-offs and other adjustments ( 29 ) ( 16 ) ( 28 )

Balance at end of year $ 17 $ 11 $ 14

Year ended December 31,

2023 2022 2021

Allowance for doubtful accounts (In millions)

Balance at beginning of year $ — $ 17 $ 24

Net charged (credited) to Net income 4 ( 2 ) ( 3 )

Charges utilized/ Currency translation adjustments/ Write-offs and other adjustments — ( 15 ) ( 4 )

Balance at end of year $ 4 $ — $ 17

(In millions)

8 unchanged sentences

Receivables with suppliers 3 9

Prepaid expenses 27 38

Current other assets $ 277 $ 304

6 unchanged sentences

98 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Balance sheet components (continued)

Property and equipment, net

6 unchanged sentences

Vehicles 4 151 59

Subtotal 2,073 1,676

Accumulated depreciation ( 823 ) ( 683 )

9 unchanged sentences

Depreciation and amortization $ 404 $ 309 $ 145

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Balance sheet components (continued)

Other liabilities

4 unchanged sentences

Derivative instruments 21 17

Incentives collected in advance 1 3

Current other liabilities $ 119 $ 129

7 unchanged sentences

Non current other liabilities $ 200 $ 95

Accumulated other comprehensive loss

The following table summarizes the changes in accumulated balances of other comprehensive loss for the year ended December 31, 2022:

Gains (Loss) on

hedging activities, net Foreign

Translation Estimated tax

(expense) Total December 31, 2022

(In millions)

Balances as of December 31, 2021 $ 8 $ ( 523 ) $ — $ ( 515 )

Other comprehensive income (loss) before reclassifications ( 33 ) 61 9 37

Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) 20 — ( 6 ) 14

Net current period other comprehensive income (loss) ( 13 ) 61 3 51

Ending balance $ ( 5 ) $ ( 462 ) $ 3 $ ( 464 )

99 | MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Balance sheet components (continued)

The following table summarizes the changes in accumulated balances of other comprehensive loss for the year ended December 31, 2021:

(Loss) Gains on

hedging activities, net Foreign

Translation Estimated tax

(expense) Total December 31, 2021

(In millions)

Balances as of December 31, 2020 $ ( 2 ) $ ( 467 ) $ 1 $ ( 468 )

Other comprehensive income (loss) before reclassifications 8 ( 56 ) — ( 48 )

Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) 2 — ( 1 ) 1

Net current period other comprehensive income (loss) 10 ( 56 ) ( 1 ) ( 47 )

Ending balance $ 8 $ ( 523 ) $ — $ ( 515 )

The following table summarizes the changes in accumulated balances of other comprehensive loss for the year ended December 31, 2020:

(Loss) Gains on

hedging activities, net Unrealized

(Loss) Gains on

Investments Foreign

Translation Estimated tax

benefit Total December 31, 2020

(In millions)

Balances as of December 31, 2019 $ — $ 2 $ ( 409 ) $ — $ ( 407 )

Other comprehensive (loss) income before reclassifications 4 — ( 58 ) ( 1 ) ( 55 )

Amount of (gain) loss reclassified from accumulated other comprehensive (loss) income ( 6 ) ( 2 ) — 2 ( 6 )

Net current period other comprehensive income (loss) income ( 2 ) ( 2 ) ( 58 ) 1 ( 61 )

Ending balance $ ( 2 ) $ — $ ( 467 ) $ 1 $ ( 468 )

The following table provides details about reclassifications out of accumulated other comprehensive loss for the year ended December 31, 2022, 2021 and 2020:

Details about Accumulated

Other Comprehensive loss

Components Amount of (Loss) Gain Reclassified from Accumulated Other

Comprehensive loss Affected Line Item

in the Statement of Income

Year Ended December 31,

2022 2021 2020

(In millions)

Unrealized (losses) gains on hedging activities $ ( 20 ) $ ( 2 ) $ 6 Cost of net revenues, interest expense and foreign exchange

Unrealized gains on investments — — 2 Interest income and other financial gains

Estimated tax benefit (expense) on unrealized (losses) gains 6 1 ( 2 ) Income tax expense

Total reclassifications for the year $ ( 14 ) $ ( 1 ) $ 6 Total, net of income taxes

MercadoLibre, Inc.

27 unchanged sentences

Total $ 2,840 $ ( 1,104 ) $ 1,736

The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $ 1,112 million (which includes $ 8 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the Consolidated Balance Sheet) and $ 435 million as of December 31, 2022 and 2021, respectively.

The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $ 1,102 million and $ 1,112 million as of December 31, 2023 and 2022, respectively, which includes $ 18 million and $ 8 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the consolidated balance sheets as of December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, the Company is exposed to off-balance sheet unused agreed loan commitment on credit cards portfolio which expose the Company to credit risks for $ 934 million and $ 271 million, respectively.

For the years ended December 31, 2023 and 2022 the Company recognized in Provision for doubtful accounts $ 8 million and $ 8 million as expected credit losses, respectively.

100 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Loans receivable, net (continued)

The following tables summarize the allowance for doubtful accounts activity during the years ended December 31, 2023, 2022 and 2021:

15 unchanged sentences

Balance at end of year $ 120 $ 614 $ 145 $ 225 $ 1,104

The increase in write-offs, for the year ended December 31, 2022 compared to the same period in 2021, is mainly generated by higher originations of loans receivable in 2022.

The increase in write-offs, for the year ended December 31, 2023 compared to the same period in 2022, is mainly generated by higher originations of loans receivable in 2022, compared to the same period in 2021, generating a higher write-offs effect in the year ended December 31, 2023.

December 31, 2021

On-line merchant Consumer In-store merchant Total

On-line merchant Consumer In-store merchant Credit cards Total

(In millions)

Balance at beginning of year $ 20 $ 45 $ 13 $ — $ 78

Adoption of ASC 326 2 2 1 5

Net charged to Net Loss 25 51 15 91

Net charged to Net Income 75 234 74 51 434

Currency translation adjustments ( 3 ) ( 7 ) ( 3 ) — ( 13 )

1 unchanged sentence

Balance at end of year $ 79 $ 232 $ 76 $ 48 $ 435

As of December 31, 2022, the Company is exposed to off-balance sheet unused agreed loan commitment on credit cards portfolio which expose the Company to credit risks.

For the year ended December 31, 2022 the Company recognized in Provision for doubtful accounts $ 8 million as expected credit losses.

The Company closely monitors credit quality for all loans receivable on a recurring basis to assess and manage its exposure to credit risk.

4 unchanged sentences

101 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Loans receivable, net (continued)

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

2022 December 31,

(In millions)

11 unchanged sentences

301-330 days past due 74 85

331-360 days past due 66 75

Total past due 1,116 1,132

1 unchanged sentence

Total $ 3,778 $ 2,840

As of December 31, 2023 and 2022, renegotiations represented 2.8 %% and 1 % of the loans receivable portfolio, respectively.

As described in Note 2 – Summary of significant accounting policies, the Company places loans on non-accrual status at 90 days past due.

13 unchanged sentences

102 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Business combinations, goodwill, and intangible assets (continued)

The following table summarizes the purchase price allocation for the acquisition:

15 unchanged sentences

and its subsidiaries, a logistics technology platform which connects sellers, e-commerce companies, carriers, third-party logistics providers and consumers through its vertically integrated network of drop-off and pick-up points throughout Brazil, Mexico and Colombia.

The Company is located and organized under the laws of Brazil.

Kangu Participações S.A.

is located and organized under the laws of Brazil.

The objective of the acquisition was to enhance the capabilities of the Company in terms of logistics.

1 unchanged sentence

(i) the total cash payment of $ 38 million at the time of closing;

(ii) an escrow of $ 4 million and (iii) $ 11 million related to the fair value at the acquisition date of a call option to purchase 20 % of the equity interest of Kangú Participações S.A.

(ii) an escrow of $ 4 million and (iii) $ 11 million related to the fair value at the acquisition date of a call option to purchase 20 % of the equity interest of Kangu Participações S.A.

As result of the acquisition, the Company recognized a gain for the fair value amount of the option.

2 unchanged sentences

In addition, the Company incurred in certain direct costs of the business combination which were expensed as incurred.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Business combinations, goodwill, and intangible assets (continued)

The following table summarizes the purchase price allocation for the acquisition:

7 unchanged sentences

Purchase Price $ 53

103 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The purchase price was allocated based on the final measurement of the fair value of assets acquired and liabilities assumed considering the information available as of the initial accounting date.

5 unchanged sentences

The results of operations for periods prior to the acquisitions, individually and in the aggregate, were not material to the Company’s consolidated statements of income and, accordingly, pro forma information has not been presented.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Business combinations, goodwill, and intangible assets (continued)

Goodwill and intangible assets

14 unchanged sentences

Total intangible assets, net $ 11 $ 25

(1) Digital assets are net of $ 21 million and $ 9 million of impairment losses as of December 31, 2022 and December 31, 2021, registered in General and Administrative expenses.

Intangible assets at fair value (1)

(1 ) Digital assets as of December 31, 2023 are included within “Intangible assets at fair value” of the consolidated balance sheets.

See Note 2 – Summary of significant accounting policies – Recently Adopted Accounting Standards of these audited consolidated financial statements for further detail.

The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 are as follows:

2 unchanged sentences

(In millions)

Balance, beginning of the year $ 56 $ 10 $ 37 $ 37 $ 6 $ 2 $ 148

Balance, beginning of the period $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153

Effect of exchange rates changes 4 — 5 — 1 — 10

Balance, end of the year $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153

Balance, end of the period $ 64 $ 10 $ 44 $ 37 $ 6 $ 2 $ 163

104 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Year ended December 31, 2022

2 unchanged sentences

Balance, beginning of the year $ 56 $ 10 $ 37 $ 37 $ 6 $ 2 $ 148

Business Acquisitions 37 — 6 23 2 — 68

Effect of exchange rates changes 4 — 2 — ( 1 ) — 5

Balance, end of the year $ 60 $ 10 $ 39 $ 37 $ 5 $ 2 $ 153

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Business combinations, goodwill, and intangible assets (continued)

Intangible assets with definite useful life

Intangible assets with definite useful life are comprised of customer lists, non-compete and non-solicitation agreements, hubs network, acquired software licenses and other acquired intangible assets including developed technologies and trademarks.

Aggregate a mortization expense for intangible assets totaled $ 9 million, $ 6 million and $ 5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Aggregate amortization expense for intangible assets totale d $ 6 million , $ 9 million and $ 6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes the remaining amortization of intangible assets with definite useful life as of December 31, 2023:

For year ended 12/31/2023 $ 4

For year ended 12/31/2024 3

For year ended 12/31/2025 1

For year ended 12/31/2026 1

For year to be ended December 31, 2024 $ 3

For year to be ended December 31, 2025 1

For year to be ended December 31, 2026 1

For year to be ended December 31, 2027 1

Reporting segments are based upon the Company’s internal organizational structure, the manner in which the Company’s operations are managed and resources are assigned, the criteria used by Management to evaluate the Company’s performance, the availability of separate financial information and overall materiality considerations.

4 unchanged sentences

Expenses over which segment managers do not currently have discretionary control, such as certain technology and general and administrative costs, are monitored by Management through shared cost centers and are not evaluated in the measurement of segment performance.

105 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

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

11 unchanged sentences

Foreign currency losses, net ( 615 )

Net income before income tax expense $ 780

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Segments (continued)

Net income before income tax expense and equity in earnings of unconsolidated entity $ 1,553

Year Ended December 31, 2022

10 unchanged sentences

Foreign currency losses, net ( 198 )

Net income before income tax expense $ 241

Net income before income tax expense and equity in earnings of unconsolidated entity $ 780

106 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Year Ended December 31, 2021

10 unchanged sentences

Foreign currency losses, net ( 109 )

Net income before income tax expense $ 81

Net income before income tax expense and equity in earnings of unconsolidated entity $ 241

The following tables summarize net revenues per reporting segment, which have been disaggregated by similar products and services for the years ended December 31, 2023, 2022 and 2021:

2 unchanged sentences

(In millions)

Commerce services (a) $ 2,585 $ 814 $ 1,036 $ 329 $ 4,764

Commerce products sales (b) 487 271 246 40 1,044

Commerce services (1)

$ 3,655 $ 1,036 $ 1,653 $ 410 $ 6,754

Commerce products sales (2)

857 225 326 39 1,447

Total commerce revenues 4,512 1,261 1,979 449 8,201

Fintech services (c) 1,464 904 152 125 2,645

Credit revenues (d) 1,102 506 421 4 2,033

Fintech products sales (e) 28 5 9 9 51

Fintech services (3)

1,910 1,292 296 185 3,683

Credit revenues (4)

1,155 684 699 8 2,546

Fintech products sales (5)

18 3 11 11 43

Total fintech revenues 3,083 1,979 1,006 204 6,272

Total net revenues

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Segments (continued)

$ 7,595 $ 3,240 $ 2,985 $ 653 $ 14,473

Year Ended December 31, 2022

1 unchanged sentence

(In millions)

Commerce services (a) $ 2,076 $ 614 $ 756 $ 304 $ 3,750

Commerce products sales (b) 405 242 168 70 885

Commerce services (1)

$ 2,585 $ 814 $ 1,036 $ 329 $ 4,764

Commerce products sales (2)

487 271 246 40 1,044

Total commerce revenues 3,072 1,085 1,282 369 5,808

Fintech services (c) 938 490 80 82 1,590

Credit revenues (d) 468 178 163 — 809

Fintech products sales (e) 23 7 5 — 35

Fintech services (3)

1,464 904 152 125 2,645

Credit revenues (4)

1,102 506 421 4 2,033

Fintech products sales (5)

Total fintech revenues 2,594 1,415 582 138 4,729

Total net revenues

$ 5,666 $ 2,500 $ 1,864 $ 507 $ 10,537

107 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Year Ended December 31, 2021

1 unchanged sentence

(In millions)

Commerce services (a) $ 1,257 $ 461 $ 428 $ 159 $ 2,305

Commerce products sales (b) 100 100 43 12 255

Commerce services (1)

$ 2,076 $ 614 $ 756 $ 304 $ 3,750

Commerce products sales (2)

405 242 168 70 885

Total commerce revenues 2,481 856 924 374 4,635

Fintech services (c) 671 350 64 54 1,139

Credit revenues (d) 143 64 39 — 246

Fintech products sales (e) 23 5 1 — 29

Fintech services (3)

938 490 80 82 1,590

Credit revenues (4)

468 178 163 — 809

Fintech products sales (5)

Total fintech revenues 1,429 675 248 82 2,434

Total net revenues

(a) Includes final value fees paid by sellers derived from intermediation services and related shipping fees, classified fees derived from classified advertising services and ad sales.

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

(c) Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution, revenues as a result of offering installments for the payment to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets, Mercado Pago credit and debit card fees and insurtech fees.

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

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

$ 3,910 $ 1,531 $ 1,172 $ 456 $ 7,069

(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 and ad sales.

(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, revenues as a result of offering installments for the payment to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets, Mercado Pago credit and debit card fees and insurtech fees.

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

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

The following table summarizes the allocation of the property and equipment based on geography:

7 unchanged sentences

Total property and equipment, net $ 1,250 $ 993

The following table summarizes the allocation of the operating lease right-of-use assets based on geography:

(In millions)

Argentina $ 51 $ 53

Brazil 396 286

Mexico 380 245

Other countries 72 72

Right of use asset, net $ 899 $ 656

108 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Segments (continued)

As of December 31, 2022, the Company owned operating lease right-of-use assets of $ 53 million in Argentina the segment, $ 286 million in the Brazil segment, $ 245 million in the Mexico segment and $ 72 million in the Other countries segment.

The following table summarizes the allocation of the goodwill and intangible assets based on geography:

(In millions)

US intangible assets at fair value (1)

US intangible assets, net (1)

2 unchanged sentences

Other countries 50 52

Total goodwill and intangible assets, net $ 178 $ 193

Total goodwill and intangible assets $ 198 $ 178

(1 ) Digital assets as of December 31, 2023 are included within “Intangible assets at fair value” of the consolidated balance sheets.

See Note 2 – Summary of significant accounting policies – Recently Adopted Accounting Standards of these audited consolidated financial statements for further detail.

109 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

2 unchanged sentences

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022:

Description Balances as of

Balances as of

December 31, 2023 Quoted Prices in

3 unchanged sentences

observable inputs

(Level 2) Unobservable

(Level 2) Balances as of

9 unchanged sentences

government debt securities (1)

60 60 — 21 21 — —

Foreign government debt securities (1)

32 32 — — — — —

Restricted cash and cash equivalents:

Money market (2)

Foreign government debt securities (Central Bank of Brazil Mandatory Guarantee) (1) 158 158 — — 296 296 — —

278 278 — 352 352 — —

Foreign government debt securities (1)

116 116 — 158 158 — —

government debt securities (1)

Foreign government debt securities (Central Bank of Brazil Mandatory Guarantee) (1) 1,219 1,219 — — 602 602 — —

1,009 1,009 — 733 733 — —

Foreign government debt securities (1) (3)

2,530 2,530 — 1,433 1,433 — —

Corporate debt securities 30 30 — — — — —

Other assets:

2 unchanged sentences

Customer crypto-assets safeguarding assets 34 — 34 15 — 15 —

Intangible assets at fair value 24 24 — — — — —

Total assets $ 4,775 $ 4,718 $ 57 $ 3,315 $ 3,299 $ 16 $ —

Long-term retention plan $ 58 $ — $ 58 $ — $ 103 $ — $ 103 $ —

Long-term retention program $ 104 $ — $ 104 $ 58 $ — $ 58 $ —

Other liabilities:

3 unchanged sentences

Total liabilities $ 169 $ — $ 169 $ 105 $ — $ 97 $ 8

(1) Measured at fair value with impact on the consolidated statement of income for the application of the fair value option.

(See Note 2 – Fair value option applied to certain financial instruments.)

(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 financial instruments.)

(2) As of December 31, 2023 and 2022 includes $ 269 million and $ 314 million, respectively, of money market funds from securitization transactions.

(See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)

(3) As of December 31, 2023 and 2022 includes $ 23 million and $ 21 million, respectively, of investments from securitization transactions that are restricted to the payment of amounts due to third-party investors.

In additional, includes foreign government debt securities that are also restricted due to regulations issued by the Central Banks and other regulators or because guarantees a line of credit.

(See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)

110 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Fair value measurement of assets and liabilities (continued)

As of December 31, 2023 and 2022, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis were valued using i) Level 1 inputs:

4 unchanged sentences

valuations based on unobservable inputs reflecting Company’s assumptions.

The unobservable inputs of the fair value of derivative instruments and contingent considerations classified as Level 3 refer to the prevailing risk free interest rate and spot exchange rate, and to the amounts to be paid according to the respective agreements of each acquisition, the likelihood of achievement of the performance targets arising from each one (expected to be 100%), as well as the Company’s historical experience with similar arrangements.

The unobservable inputs of the fair value of contingent considerations classified as Level 3 refer to the amounts to be paid according to the respective agreements of each acquisition, the likelihood of achievement of the performance targets arising from each one (expected to be 100%), and the Company’s historical experience with similar arrangements.

Reasonable variation on those unobservable inputs would not significantly change the fair value of those instruments.

The following tables summarize the reconciliation of the financial assets and liabilities measured at fair value using Level 3 inputs as of December 31, 2022 and 2021:

As of December 31, 2023 and 2022, the Company had not changed the methodology nor the assumptions used to estimate the fair value of the financial instruments.

There were no transfers to and from Levels 1, 2 and 3 during the year ended December 31, 2023.

There were no transfers to and from Levels 1, 2 and 3 during the year ended December 31, 2022, other than as detailed in the table below.

The following tables summarize the reconciliation of the financial assets and liabilities measured at fair value using Level 3 inputs as of December 31, 2022:

Year Ended December 31, 2022

9 unchanged sentences

Balance, end of the year $ — $ ( 8 )

Year Ended December 31, 2021

Derivative Instruments, net Contingent Considerations

(In millions)

Balance, beginning of the year $ ( 14 ) $ ( 5 )

Net Additions 3 ( 4 )

Settlements 14 —

Foreign Currency Translation ( 3 ) —

Gains in Other Comprehensive Income 11 —

Balance, end of the year $ 11 $ ( 9 )

(1) As of December 31, 2023, the contingent considerations measured at fair value using Level 3 inputs were settled.

The Company’s election of the fair value option applies to the:

i) Brazilian federal government bonds and ii) U.S.

treasury notes.

As a result of the election of the fair value option for the investments held as of December 31, 2022 and 2021, the Company recognized fair value gains in interest income and other financial gains for $ 29 million and $ 9 million, respectively.

As of December 31, 2022 and 2021, the Company held no investment in corporate debt securities which are classified as available for sale.

i) Foreign government debt securities, and ii) U.S.

government debt securities.

The Company recognized fair value changes in interest income and other financial gains which includes the related interest income of those instruments.

Such fair value changes and interest income amount to $ 268 million, $ 154 million and $ 36 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, the cost and the estimated fair value of the Company’s investment in corporate debt securities classified as available for sale amounted to $ 30 million.

During the year ended December 31, 2023, the gross unrealized gains were less than $ 1 million.

As of December 31, 2022, the Company held no investment in corporate debt securities classified as available for sale.

However, during the year ended December 31, 2022, the Company purchased and sold these kind of instruments, being the proceeds from the sales $ 156 million and the gross realized gains less than $ 1 million.

The cost of these securities was determined under a specific identification basis.

The cost of these securities are determined under a specific identification basis.

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

Balances as of

December 31, 2023

(In millions)

One year or less $ 5

One year to two years 12

Two years to three years 4

Three years to four years 3

Four years to five years 6

Total available for sale investments

111 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Fair value measurement of assets and liabilities (continued)

The following table summarizes the net carrying amount of the debt securities not classified as available for sale, classified by its contractual maturities or Management expectation to convert the investments into cash:

Balances as of

December 31, 2023 Balances as of

December 31, 2022

(In millions)

One year or less $ 3,668 $ 2,079

One year to two years 4 201

Two years to three years — 5

Three years to four years 35 —

Four years to five years 37 30

More than five years 3 30

$ 3,747 $ 2,345

Financial assets and liabilities not measured and recorded at fair value

As of December 31, 2022 and 2021, the carrying value of the Company’s financial assets (except for loans receivable) and liabilities (except for the 2026, 2028 and 2031 Notes) not measured at fair value approximated their fair value mainly because of their short-term maturity.

These assets and liabilities included short and long-term investments (excluding money markets and U.S.

and foreign government debt securities), accounts receivable, credit card receivables and other means of payments, other assets (excluding derivative instruments and USDC), accounts payable and accrued expenses, funds payable to customers, amounts payable due to credit and debit card transactions, salaries and social security payable (excluding variable LTRP), taxes payable, loans payables and other financial liabilities (except for the 2026, 2028 and 2031 Notes) and other liabilities (excluding variable LTRP, contingent considerations and derivative instruments).

If these financial instruments were measured at fair value in the financial statements, cash and restricted cash would be classified as Level 1 (where cost and fair value are aligned) and the remaining financial instruments would be classified as Level 2.

As of December 31, 2022 and December 31, 2021 the estimated fair value of the loans receivables, which is based on Level 3 inputs, is $ 1,761 million and $ 1,260 million, respectively, and were determined based on Company’s assumptions.

As of December 31, 2022 and 2021, the estimated fair value of the 2026 and 2031 Notes, which is based on Level 2 inputs, is $ 359 million and $ 541 million, and $ 401 million and $ 704 million, respectively.

As of December 31, 2022 and 2021, the estimated fair value of the 2028 Notes, which is based on Level 2 inputs, is $ 884 million and $ 1,367 million, respectively, and were determined based on the closing trading price per $ 100 principal amount of the 2028 Notes as of the last day of trading for the period (see Note 17 “Loans payable and other financial liabilities” of these audited consolidated financial statements for further details).

The rest of the loans payable and other financial liabilities approximate their fair value because the effective interest rates are not materially different from market interest rates.

The following table summarizes the estimated fair value level for the remaining financial assets and liabilities of the Company not measured at fair value as of December 31, 2022 and 2021:

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, 2023 and 2022:

Balances as of

2 unchanged sentences

(In millions)

Time Deposits $ 439 $ 439 $ 16 $ 16

Cash and cash equivalents $ 1,825 $ 1,825 $ 1,290 $ 1,290

Restricted cash and cash equivalents 898 898 943 943

Investments 15 15 439 439

Accounts receivables, net 156 156 130 130

7 unchanged sentences

Salaries and social security payable 441 441 349 349

Taxes payable 414 414 291 291

Loans payable and other financial liabilities 4,495 4,441 4,758 4,997

1 unchanged sentence

Total Liabilities $ 12,905 $ 12,851 $ 10,628 $ 10,867

(*) Includes the fair value of the liability component of the 2028 Notes as of December 31, 2021 of $ 331 million.

As of December 31, 2023 and 2022, the carrying value of the Company’s financial assets (except for loans receivable and equity securities held at cost) not measured at fair value approximated their fair value mainly because of their short-term maturity.

If these financial assets were measured at fair value in the financial statements, cash and restricted cash would be classified as Level 1 (where cost and fair value are aligned) and the remaining financial assets would be classified as Level 2.

The estimated fair value of the loans receivable would be classified as Level 3 based on the Company’s assumptions.

112 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2023 and 2022, the carrying value of the Company’s financial liabilities (except for 2028 Notes, 2026 Sustainability Notes and 2031 Notes) not measured at fair value approximated their fair value mainly because of their short-term maturity and the effective interest rates are not materially different from market interest rates.

If these financial liabilities were measured at fair value in the financial statements, these would b e classified as Level 2.

As of December 31, 2023 and 2022, the estimated fair value of the 2026 Notes would be $ 375 million and $ 359 million, respectively, and the estimated fair value of the 2026 Notes would be $ 599 million and $ 541 million, resp ectively, which is based on Level 2 inputs.

Also, as of December 31, 2022, the estimated fair value of the 2028 Notes was $ 884 million, and was classified as Level 2 based on the closing trading price per $ 100 principal amount of the 2028 Notes as of the last day of trading for the period.

The fair value of the 2028 Notes was primarily affected by the trading price of the Company’s common stock and market interest rates.

Authorized, issued and outstanding shares

5 unchanged sentences

REDEEMABLE CONVERTIBLE PREFERRED STOCK

Pursuant to the Fourth Amended and Restated Certificate of Incorporatio n, the Company is authorized to issue 40,000,000 shares of preferred stock, par value $ 0.001 per share.

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, 2023, and 2022 the Company has no preferred stock subscribed or issued.

2 unchanged sentences

As of December 31, 2023, there are 989,811 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 nonqualified stock options.

As of December 31, 2023, there were 5,658 shares of restricted stock outstanding under such plan.

The components of net income before income tax expense in consolidated entities for the years ended December 31, 2022, 2021 and 2020 are as follows:

113 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The components of income tax for the years ended December 31, 2023, 2022 and 2021 are as follows:

Year Ended December 31,

1 unchanged sentence

(In millions)

United States $ ( 207 ) $ ( 214 ) $ ( 54 )

Brazil 259 189 79

Argentina 699 389 185

Mexico 74 ( 130 ) ( 134 )

Other Countries ( 45 ) 7 5

$ 41 $ 12 $ —

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Income taxes (continued)

Income tax is composed of the following:

( 320 ) ( 152 ) ( 26 )

( 284 ) ( 97 ) ( 29 )

Income tax expense $ 569 $ 298 $ 149

The components of net income before tax expense and equity in earnings of unconsolidated entity for the years ended December 31, 2023, 2022 and 2021 are as follows:

Year Ended December 31,

4 unchanged sentences

$ 1,553 $ 780 $ 241

Income tax expense $ 298 $ 149 $ 82

The following is a reconciliation of the difference between the actual charge for income taxes and the expected income tax expense computed by applying the statutory income tax rate for the years ended December 31, 2022, 2021 and 2020 to income before taxes:

114 | 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, 2023, 2022 and 2021 to net income before income tax:

Year Ended December 31,

17 unchanged sentences

Income tax expense $ 569 $ 298 $ 149

Income taxes are determined by each subsidiary on a stand alone basis according to income tax law of each jurisdiction The Company’s consolidated effective tax rate for year ended December 31, 2022 as compared to 2021 decreased from 61.8 % to 38.2 % largely as a result of (i) the one-time loss on debt extinguishment related to 2028 Notes repurchase recognized during the first quarter of 2021, which was considered as non-deductible expense;

and (ii) the deferred tax assets in Mexico that were recognized during 2022 regarding the partial reversal of certain tax valuation allowances in one of the subsidiaries according to projected taxable gains for upcoming years .

This decrease in our effective tax rate was partially offset by (i) pre-tax losses in another Mexican subsidiary which were included in the valuation allowance;

(ii) higher deferred tax liabilities in the U.S.

due to temporary differences related to retained earnings from certain Brazilian VIEs ;

and (iii) a higher foreign exchange loss due to the purchase of our own shares in the Argentine market that is considered a non-deductible expense, see Note 25 “Share repurchase program” of these audited consolidated financial statements for further detail.

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, 2023 as compared to 2022, decreased from 38.2 % to 36.6 % as a result of the reversal of the valuation allowances in one of the Company´s Mexican subsidiaries during the third quarter of 2023.

This decrease was partially offset by taxable foreign exchange gains accounted for local tax purposes in Argentina, which are not recorded for accounting purposes given that under U.S.

GAAP and due to Argentina’s highly inflationary status, Argentina’s operations’ functional currency is the U.S.

dollar, and higher non-deductible foreign exchange losses related to the acquisition of the Company´s own common stock in the Argentine market (please see Note 25 – Share repurchase program for further information).

115 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Income taxes (continued)

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse.

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective 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, 2023 and 2022:

6 unchanged sentences

Payroll and social security payable 42 32

Foreign exchange effect — 7

Provisions 275 131

11 unchanged sentences

Goodwill ( 4 ) ( 4 )

Convertible notes and Capped Call — ( 26 )

Accounts payable and accrued expenses ( 2 ) ( 3 )

3 unchanged sentences

Total deferred tax liabilities $ ( 214 ) $ ( 158 )

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Income taxes (continued)

Valuation allowance on deferred tax assets

The following table summarizes the tax valuation allowance activity during the years ended December 31, 2023, 2022 and 2021:

Tax valuation allowance Balance at beginning of

year Charged/(credited) to Net

income Charges

Currency translation adjustments and other adjustments Balance at end of

(In millions)

Year Ended December, 31

Year ended December 31, 2021 179 56 27 262

Year ended December 31, 2022 262 92 6 360

As of December 31, 2022, consolidated deferred tax asset on tax loss carryforwards for income tax purposes were $ 255 million.

2023 2022 2021

Tax valuation allowance (In millions)

Balance at beginning of year $ 360 $ 262 $ 179

Charged to Net income 4 92 56

Charges Utilized/Currency translation adjustments and other adjustments 10 6 27

Balance at end of year $ 374 $ 360 $ 262

116 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2023, consolidated deferred tax asset on tax loss carryforwards for income tax purposes wer e $ 177 million.

If not utilized, tax loss carryforwards will begin to expire as follows:

1 unchanged sentence

Without due dates 42

Based on Management’s assessment of available objective evidence, the Company maintained a valuation allowance on deferred tax assets of $ 360 million and $ 262 million as of December 31, 2022 and 2021, respectively.

Ba sed on Management’s assessment of available objective evidence, the Company maintained a valuation allowance on deferred tax assets of $ 374 million and $ 360 million as of December 31, 2023 and 2022, respectively.

This valuation allowance includes $ 304 million and $ 156 million to fully reserve the outstanding U.S.

foreign tax credits as of December 31, 2022 and 2021, respectively.

During the year ended December 31, 2022, the Company increased its valuation allowance mainly on U.S foreign tax credits by $ 106 million offset by the partial recovery of the valuation allowance on its Mexican operation by $ 35 million.

foreign tax credits as of December 31, 2023 an d 2022, respectively.

The valuation allowance increased as of December 31, 2023 compared to 2022 , mainly related to the impairment of $ 148 million on U.S.

foreign tax credit, offset by the reversal of $ 141 million given that is more likely than not that deferred tax assets from DeRemate.com de México, S.

de C.V., a Mexican subsidiary, will be realized in the foreseeable future.

The change in judgment regarding the realizability of the deferred tax assets of the Mexican subsidiary was triggered during the year ended December 31, 2023, as positive trends observed in recent periods became enough evidence to support the conclusion.

Knowledge-based economy promotional regime in Argentina

5 unchanged sentences

Based on the amended promotional regime, companies that meet new specified criteria shall be entitled to:

i) a reduction of the income tax burden ( 60 % for micro and small enterprises, 40 % for medium-sized enterprises and 20 % for large enterprises) over the promoted activities for each fiscal year, applicable to both Argentine source income and foreign source income, ii) stability of the benefits established by the knowledge-based economy promotional regime (as long as the beneficiary is registered and in good standing), and iii) a non-transferable tax credit bond amounting to 70 % (which can be up to 80 % in certain specific cases) of the Company’s contribution to the social security regime of every employee whose job is related to the promoted activities (caps on the number of employees are applicable).

Such bonds can be used within 24 months from their issue date (which period can be extended for an additional 12 months in certain cases) to offset certain federal taxes, such as value-added tax, but they cannot be used to offset income tax.

i) a reduction of the income tax burden ( 60 % for micro and small enterprises, 40 % for medium-sized enterprises and 20 % for large enterprises) over the promoted activities for each fiscal year, applicable to both Argentine source income and foreign source income, ii) stability of the benefits established by the knowledge-based economy promotional regime (as long as the beneficiary is registered and in good standing), and iii) a tax credit bond amounting to 70 % (which can be up to 80 % in certain specific cases) of the Company’s contribution to the social security regime of every employee whose job is related to the promoted activities (caps on the number of employees are applicable).

Such bonds can be used within 24 months from their issue date (which period can be extended for an additional 12 months in certain cases) to offset certain federal taxes, such as value-added tax.

On December 20, 2020, Argentina’s Executive Power issued Decree No.

3 unchanged sentences

It also establishes that exports of services from companies participating in this regime will not be subject to export duties.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Income taxes (continued)

On January 13, 2021, Argentina’s Ministry of Productive Development –current Application Authority of the knowledge-based economy promotional regime– issued Resolution No.

9 unchanged sentences

Additionally, for the year ended December 31, 2021, the Company accrued a charge of $ 4 million to pay knowledge-based economy promotional law audit fees and FONPEC (“Fondo Fiduciario para la Promoción de la Economía del Conocimiento”) contribution.

During the year end ed December 31, 2022, the Company accounted for an income tax benefit of $ 27 million .

The aggregate per share effect of the income tax benefit amounted to $ 0.54 for the year ended December 31, 2022.

Furthermore, the Company recorded a social security benefit of $ 54 million for the year ended December 31, 2022.

Additionally, during the year ended December 31, 2022, the Company accrued a charge of $ 5 million , to pay knowledge-based economy promotional law audit fees and FONPEC contribution.

Corporate income tax reform in Argentina

In June 2021, Argentine Congress enacted Law 27,630, which increases corporate income tax rate for tax years beginning January 1, 2021, and onwards.

The law replaced the 30 % fixed tax rate with a progressive tax scale that applies as follows:

a) for accumulated net taxable income up to $ 5 million Argentine Pesos (roughly $ 28 thousand):

25 % tax rate on net taxable income, b) for accumulated net taxable income from $ 5 million Argentine Pesos to $ 50 million Argentine Pesos (roughly $ 282 thousand):

a tax payment of $ 1 million Argentine Pesos (roughly $ 6 thousand) plus a 30 % tax rate on accumulated net taxable income on any amount exceeding $ 5 million Argentine Pesos, c) for accumulated net taxable income exceeding $ 50 million Argentine Pesos:

a tax payment of $ 15 million Argentine Pesos (roughly $ 85 thousand) plus a 35 % tax rate on accumulated net taxable income on any amount exceeding $ 50 million Argentine Pesos.

In addition, the new law permanently extended the 7 % withholding tax currently in force to dividend distributions.

The mentioned thresholds are subject to inflation adjustment from 2022 onwards.

117 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

During the years ended December 31, 2023 and 2022, the Company accounted for an income tax benefit of $ 42 million and $ 27 million, respectively.

The aggregate per share effect of the income tax benefit amounted to $ 0.84 and $ 0.54 for the years ended December 31, 2023 and 2022, respectively.

Furthermore, the Company recorded a social security benefit of $ 67 million and $ 54 million for the years ended December 31, 2023 and 2022, respectively.

Additionally, during the years ended December 31, 2023 and 2022, the Company accrued a charge of $ 6 million and $ 5 million, respectively, to pay knowledge-based economy promotional law audit fees and FONPEC contribution.

COMMITMENTS AND CONTINGENCIES

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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 probable that future costs will be incurred and such costs can be reasonably estimated.

The Company accrues liabilities when it considers it to be probable that future costs will be incurred and such costs can be reasonably estimated.

Proceeding-related liabilities are based on developments to date and historical information related to actions filed against the Company.

As of December 31, 2022, the Company had accounted for estimated liabilities involving proceeding-related contingencies and other estimated contingencies of $ 53 million t o cover legal actions against the Company in which its Management has assessed the likelihood of a final adverse outcome as probable.

As of December 31, 2023, the Company had accounted for estimated liabilities involving proceeding-related contingencies and other estimated contingencies of $ 124 million 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.

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No loss amounts have been accrued for such reasonably possible legal actions, the most significant of which are described below.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies (continued)

The following table summarizes the contingencies activity during the years ended December 31, 2023, 2022 and 2021:

Contingencies Balance at beginning of

year Charged/credited to Net

income / loss Charges

Currency translation adjustments/

Write-offs and other adjustments Balance at end of

(In millions)

Year Ended December 31,

Year ended December 31, 2021 11 5 ( 3 ) 13

Year ended December 31, 2022 13 16 24 53

2023 2022 2021

Contingencies (In millions)

Balance at beginning of year $ 53 $ 13 $ 11

Charged to Net income 335 16 5

Reclassifications of judicial deposits ( 273 ) — —

Charges Utilized / Currency translation adjustments / Write-offs 9 24 ( 3 )

Balance at end of year $ 124 $ 53 $ 13

Brazilian preliminary injunction against the Brazilian tax authorities (withholding Income tax)

On November 6, 2014, the Brazilian subsidiaries, Mercadolivre.com Atividades de Internet Ltda., eBazar.com.br Ltda., 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 IRRF (withholding income tax) over payments remitted by the Brazilian subsidiaries to MercadoLibre S.R.L.

O n November 6, 2014, the Brazilian subsidiaries, Mercadolivre.com Atividades de Internet Ltda., eBazar.com.br Ltda., 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.

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The Company submitted a new remedy before the same court in July 2020, which was dismissed on February 17, 2021.

On March 18, 2021, the Company filed two appeals with the superior courts, which are now pending.

As of December 31, 2022, the total amount of the deposits was $ 171 million (which included $ 24 million of interest).

Such amounts are included in non-current other assets of the consolidated balance sheet.

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 and the existence of favorable decisions issued by the Federal Regional Courts.

For that reason, the Company has not recorded any expense or liability for the disputed amounts.

On March 18, 2021, the Company filed two appeals with the superior courts.

However, the Vice President of the local Federal Court dismissed the remittance of the appeals to the Superior Courts and retained the cases in the local court.

Against this decision, the Company filed new appeals, one interlocutory appeal in the Federal Court and other interlocutory appeals in the Superior Courts.

On November 29, 2023, the interlocutory appeal was dismissed in the Federal Court, while the interlocutory appeals in the Superior Courts are pending judgment.

Besides, in recent 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 became probable based on the technical merits of the Company’s tax position and the existence of recent adverse decisions issued by the Superior Court of Justice.

For that reason, the Company has recorded a provision for the disputed amounts, which was $ 327 million as of December 31, 2023 , and which was recorded in non-current other liabilities in the consolidated balance sheets, net of the corresponding judicial deposits for $ 273 million (which includes $ 64 million of interest income).

The provision has impacted the consolidated statement of income for the year ended December 31, 2023 within Product and technology development expenses by $ 261 million, Cost of net revenues b y $ 58 million, General and administrative expenses b y $ 1 million, b ased on the classification of the original expense to which the IRRF relates, and as a reversal of Interest income by $ 4 million that offsets the interest gains generated by the judicial deposits since the case became probable.

118 | MercadoLibre, Inc.

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 (“Imposto sobre Circulação de Mercadorias, Serviços de Transporte Interestadual, Intermunicipal e Comunicação”) on interstate sales at a differential rate (“ICMS-DIFAL”) without the existence of a complementary law.

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.

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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 Supreme Court’s decision (after February 24, 2021), 4 became final and unappealable in favor of the corresponding States (cases related to the branch of Extrema:

São Paulo, Rio Grande do Sul, Paraná e Distrito Federal), and therefore their corresponding liabilities were settled with the corresponding judicial deposits .

From those 11 cases filed by the Company after the Supreme Court’s decision (after February 24, 202 1), 6 became final and unappealable in favor of the corresponding States ( cases related to the branch of Extrem a:

São Paulo, Rio Grande do Sul, Paraná, Distrito Federal, Bahia and Rio de Janeiro ), and therefore their corresponding liabilities were settled with the corresponding judicial deposits.

Another one of the 11 cases became final and unappealable in favor of Ebazar.com.br Ltda.

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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 $ 3 million provision for the disputed amounts related to these 6 cases.

For that reason, the Company has recorded a $ 3 million provision for the disputed amounts related to thes e 4 cases.

With respect to the 4 cases filed by the Company prior to the Supreme Court’s decision (before February 24, 2021), 2 of them became final and unappealable in favor of the Company.

3 unchanged sentences

As of December 31, 2023, the total amount of the deposits related to the ongoing cases was $ 7 million.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies (continued)

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

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.

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 Units have not complied with this guarantee.

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and Mercado Pago Instituição de Pagamento Ltda., filed writs of mandamus to the 27 Federation Units, aimed at preventing the Brazilian tax authorities demand payments of the DIFAL.

For that reason, the Company has not recorded any expense or liability for the disputed amounts.

The Company deposited into court the disputed amounts.

As of December 31, 2022 , the total amount of the deposits was $ 21 million.

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 Units (São Paulo, Santa Catarina e Bahia), for the purpose of preventing the Brazilian tax authorities from demanding payment of the DIFAL over their respective fixed assets.

The Company deposited into court the disputed amount s.

As of December 31, 2022 , the total amount of the deposits was $ 2 million.

For that reason, the Company has not recorded any expense or liability for the disputed amounts.

Exclusion of ICMS tax benefits from IRPJ and CSLL tax base

In this regard, the Brazilian Supreme Court ( “ 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.

The decision has not yet become final and unappealable and a motion to clarify is yet to be presented.

However, such motion to clarify, if and when presented, is unlikely to change the merit of the decision.

Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is remote 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 through April 4, 2022, and has recorded liabilities for the disputed amounts related to the period from April 5, 2022 to December 31, 2022, by $ 30 million , which are presented net of the corresponding judicial deposits of $ 29 million .

Interstate rate of ICMS-DIFAL over fixed assets

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 same decision above mentioned applies to the Brazilian subsidiary Mercado Envios Serviços de Logística Ltda., and its writs of mandamus.

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 prob able 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 $ 2 million which are presented net of the corresponding judicial deposits of $ 2 million.

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.

The Company accounted for the tax benefit netting cost of net revenues for $ 36 million and $ 15 million for years ended December 31, 2022 and 2021, respectively ( no impact in the year ended December 31, 2020).

See Note 2 – Summary of significant accounting policies of these audited consolidated financial statements for additional detail on the ICMS tax incentives.

119 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

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 (“CSLL”).

On January 31, 2022, a decision was rendered granting the injunction requested in order not to include the amounts of tax benefits granted by the State of Minas Gerais in the tax base of IRPJ and CSLL, without, however, ruling on the requirements set forth in article 30 of Law 12.973/14 and article 38 of Decree-Law 1577/98.

A motion for clarification was filed against this decision, which was accepted in order to include in the preliminary injunction the lack of compliance with such requirements.

On April 12, 2022, the Office of Attorney-General of the National Treasury manifested itself in the records informing that it had not filed an appeal against the decision that granted the preliminary injunction.

The Company is currently waiting for the judicial decision.

On January 31, 2022, a decision was rendered granting the injunction requested in order to exclude the amounts of tax benefits granted by the State of Minas Gerais in the tax base of IRPJ and CSLL.

However, the Court did not rule on the requirements set forth in article 30 of Law 12,973/14 and article 38 of Decree-Law 1577/98.

On August 14, 2023, a judgment was handed down in favor of the Company and the Public Prosecutor's Office filed an appeal.

During the fourth quarter of 2023 and after the judgment on Topic 1,182, the Superior Court of Justice ( “ STJ ” ) annulled a ruling by the Federal Regional Court which had denied its jurisdictional provision, determining the return of the files to the Court of origin so that the need to comply with the requirements could be analyzed.

Requirements in article 30 of Law 12,973/14 set forth the exclusion of presumed credits from the IRPJ and CSLL calculation basis, as in the judges' opinion this provision has not been revoked.

The ruling is deemed to be innovative because these requirements, until then, were not required in cases of presumed credit.

On January 31, 2024, after the Company presented its counter-appeal, the case was sent to the Federal Regional Court for judgment in the second instance, which is still 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 based on the technical merits of the Company’s tax position.

For that reason, the Company has not recorded any expense or liability for the disputed amounts.

The Company accounted for an income tax benefit arising from the ICMS tax incentives during the year ended December 31, 2022 for $ 17 million, considering the exchange rate as of December 31, 2022, from which $ 5 million corresponded to the period ended December 31, 2021.

The Company recorded an income tax benefit arising from the ICMS tax incentives during the year ended December 31, 2023 for $ 23 million and for the year ended December 31, 2022 for $ 17 million (of which $ 5 million corresponded to the year ended December 31, 2021).

On April 25, 2023, the Company filed a writ of mandamus seeking an injunction and claiming the exclusion of the amounts relating to the ICMS tax benefits granted by the State of Minas Gerais in the tax base of the Social Contributions (PIS and COFINS).

On May 26, 2023, a decision was rendered granting the injunction requested.

The Company is currently waiting for the final judicial decision.

For that reason, the Company has not recorded any expense or liability for the disputed am ounts.

The Company recorded $ 12 million of PIS and COFINS tax benefits arising from the ICMS tax incentives for the year ended December 31, 2023, of which $ 4 million corresponded to the period ended December 31, 2021, and $ 2 million corresponded to the period ended December 31, 2022.

Marketplace joint and several liability

In the context of intermediation transactions on the marketplace platform, the Brazilian subsidiary eBazar.com.br Ltda.

received four tax assessments aimed at collecting alleged ICMS debts for the 2017 to 2019 fiscal years, in the amount of $ 9 million, considering the exchange rate as of December 31, 2023 .

The tax assessments intend to attribute to eBazar.com.br Ltda.

the joint and several liability for the payment of ICMS allegedly due by sellers on the sale of goods without compliant invoices.

The Company presented its objections in August 2023 and received unfavorable decisions from the administrative court in the first instance.

The Companies filed appeals in each one of the cases with the administrative court, which are now pending.

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.

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., MercadoPago.com Representações Ltda., 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).

The federal judge granted the preliminary injunction and ruled in favor of the companies on January 15, 2019.

On April 8, 2019, the Federal Government presented an appeal that was rejected by the Federal Court.

Following the Federal Court's decision, the Federal Government filed two appeals with the superior courts.

However, since February 12, 2021, the mandamus remains suspended by a decision settled by the Brazilian Supreme Court, who shall judge the leading case and set a binding jurisprudence to this 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 $ 44 million.

120 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies (continued)

Administrative tax claims

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The Companies filed appeals in respect of both cases with the administrative court in the second instance, which are now pending.

The 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.

The 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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and one of the Company’s Senior Legal Directors received three tax assessments claiming corporate income taxes (IRPJ and CSLL) in the amount of $ 76 million, withholding income tax (IRRF) in the amount of $ 11 million, and PIS and COFINS in the amount of $ 12 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, 2023.

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.

In respect to IRPJ, CSLL, PIS and COFINS, 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 considered that the company failed in the emission of invoices, disregarding that the company indeed has a Special Tax Regime granted by the Municipality of Osasco that allows the emission of a single invoice per period.

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 T ax Code that enable joint tax liability for acts potentially in violation of the law or the by-laws.

With respect to IRPJ, CSLL, PIS and COFINS, 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.

Regarding the IRRF, the amount claimed by the tax authorities is already deposited in court under the writ of mandamus that discusses the company’s right not to pay IRRF on payments made to its affiliate in Argentina, due to the provisions of the Brazil and Argentina double tax treaty (for further details see contingency Brazilian preliminary injunction against Brazilian tax authorities (withholding Income tax)).

Those deposits were incorrectly ignored by tax authorities.

The Company presented the objection on January 30, 2023.

The Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the cases is reasonably possible, but not probable in the cases of IRPJ, CSLL, PIS and COFINS, based on the technical merits.

In the case of IRRF, the risk of losing the case is remote.

Taking into account the documents attached to the Company's objection, in the case of PIS and COFINS, the administrative authorities decided in December 2023 to carry out a verification diligence to analyze the documents, which may influence the outcome of the case.

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 BPP program is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance.

The Company is entitled to recover from the third-party carrier companies performing the shipping service certain amounts paid under the BPP.

Furthermore, in some specific circumstances, the Company enters into insurance contracts with third-party insurance companies in order to cover contingencies that may arise from the BPP.

The maximum potential exposure under this program is estimated to be the volume of payments on the Marketplace, for which claims may be made under the terms and conditions of the Company’s BPP.

1 unchanged sentence

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, 2023 and 2022, Management’s estimate of the maximum potential exposure related to the Company’s buyer protection program is $ 5,072 million and $ 4,002 million, respectively, for which the Company recorded a provision of $ 8 million and $ 6 million, respectively.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies (continued)

The Company committed to purchase cloud platform services from two U.S.

suppliers based on the following terms:

a) for a total amount of $ 824 million, to be fully paid off between October 1, 2021 and September 30, 2026.

As of December 31, 2022, the Company had paid $ 212 million in relation thereto;

b) for a total amount of $ 108 million, to be fully paid off between September 17, 2021 and September 17, 2024.

As of December 31, 2022, the Company had paid $ 36 million in relation thereto.

In September 2022, the Company amended this commitment whereby, effective as of September 23, 2022, the aggregate purchase commitment is $ 200 million, to be fully paid off between September 23, 2022 and September 23, 2025.

As of December 31, 2022, the Company had paid $ 14 million in relation thereto.

In connection with the closing of MELI Kaszek Pioneer Corp (“MEKA”)’s initial public offering on October 1, 2021, MEKA (a special purpose acquisition company sponsored by MELI Kaszek Pioneer Sponsor LLC (the “Sponsor”), which is a joint venture between Company’s subsidiary MELI Capital Ventures LLC and Kaszek Ventures Opportunity II, L.P.) entered into a forward purchase agreement with the Sponsor, pursuant to which the Sponsor committed to purchase from MEKA 5 million Class A ordinary shares at a price of $ 10 per share in a private placement to close substantially concurrently with the consummation of MEKA’s initial business combination.

for a total amount of $ 824 million, to be paid between October 1, 2021 and September 30, 2026.

As of December 31, 2023, the Company had paid $ 427 million;

for a total amount of $ 200 million, to be paid between September 23, 2022 and September 23, 2025.

As of December 31, 2023, the Company had paid $ 61 million.

In connection with the closing of MELI Kaszek Pioneer Corp’s (“MEKA”) initial public offering on October 1, 2021, MEKA (a special purpose acquisition company sponsored by MELI Kaszek Pioneer Sponsor LLC (the “Sponsor”), which is a joint venture between Company’s subsidiary MELI Capital Ventures LLC and Kaszek Ventures Opportunity II, L.P.) entered into a forward purchase agreement with the Sponsor, pursuant to which the Sponsor committed to purchase from MEKA 5 million Class A ordinary shares at a price of $ 10 per share in a private placement to close substantially concurrently with the consummation of MEKA’s initial business combination.

MEKA was deemed dissolved on January 2, 2024, resulting in the extinguishment of this commitment.

121 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

On April 8, 2022, the Company signed a 10-year agreement with Gol Linhas Aereas S.A.

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Pursuant to the agreement, Gol Linhas Aereas S.A.

provides logistics services in Brazil to Mercado Envios through six dedicated aircraft, two of which have already started operations as of December 31, 2022.

Long term retention plan

On May 4, 2022, the board of directors, upon the recommendation of the Compensation Committee, adopted the 2022 Long-Term Retention Plan (“2022 LTRP”).

provides logistics services in Brazil to Mercado Envios through six dedicated aircraft, all of which have already started operations as of December 31, 2023.

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

On January 10, 2024, the Company signed a 5-year agreement for the naming rights of the Complexo Pacaembu (municipal stadium of the city of São Paulo), for a total amount of $ 56 million.

The agreement has the option to extend the term for 5 additional independent periods of 5 years each, for the same amount indexed by the Brazilian inflation rate index IPCA.

LONG TERM RETENTION PROGRAM

On May 3, 2023, the board of directors, upon the recommendation of the Compensation Committee, adopted the 2023 Long-Term Retention Program (“2023 LTRP”).

In addition to the annual salary and bonus of each employee, certain employees (“Eligible Employees”) are eligible to participate in the 2023 LTRP, which provides for the grant to an Eligible Employee of a cash-settled fixed (a “2023 LTRP Fixed Award”) and cash-settled variable award (a “2023 LTRP Variable Award”, and together with any 2023 LTRP Fixed Award, the “2023 LTRP Awards”).

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The 2023 LTRP award is payable as follows:

• the eligible employee will receive 16.66 % of half of his or her target 2022 LTRP bonus once a year for a period of six years , with the first payment occurring no later than January 31, 2023 (the “2022 Annual Fixed Payment”);

■ the eligible employee will receive 16.66 % of half of his or her target 2023 LTRP bonus once a year for a period of six years , with the first payment occurring no later th an April 30, 2024 ( the “2023 Annual Fixed Payment”);

■ on each date the Company pays the Annual Fixed payment to the eligible employee, he or she will also receive a payment (the “2023 LTRP Variable Payment”) equal to the product of (i) 16.66 % of half of the target 2023 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 2022 Stock Price (as defined below).

For purposes of the 2022 LTRP, t he “2021 Stock Price” s hall equa l $ 1,391.81 (the average closing price of the Company’s common stock on the NASDAQ Global Select Market during the final 60 trading days of 2021) 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 LTRP outstanding as of December 31, 2022, 2021, 2020 and 2019 follows similar calculation method as explained above for 2022 LTRP, except that the 2015, 2016, 2017 and 2018 LTRP have performance conditions established by the board of directors that must be achieved at the first year-end of each plan.

For purposes of the 2023 LTRP, the “2022 Stock Price” shall equal $ 888.69 (the average closing price of the Company’s common stock on the NASDAQ Global Select Market during the final 60 trading days of 2022) 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, 2023, 2022 and 2021 follow a similar calculation method as explained above for the 2023 LTRP, e xcept that the 2016, 2017 and 2018 LTRP h ave performance conditions established by the board of directors that must be achieved at the first year-end of each program.

Similar to the 2023 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, 2022, the Company paid $ 103 million of LTRP plus social security obligations applicable in each local jurisdiction.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Long term retention plan (continued)

The following table summarizes the 2015, 2016, 2017, 2018, 2019, 2020, 2021 and 2022 LTRP Variable Award contractual obligation for the years ended December 31, 2022, 2021 and 2020:

During the year ended December 31, 2023, the Company paid $ 90 million ($ 33 million in cash-settled fixed and $ 57 million in cash-settled variable award) of LTRP plus social security obligations applicable in each local jurisdiction.

The following table summarizes th e 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023 LTRP Variable Award contractual obligation for the years ended December 31, 2023, 2022 and 2021:

December 31, 2023 December 31, 2022 December 31, 2021

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Outstanding LTRP 2023 270 2.62 — — — —

122 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The following table summarizes the LTRP accrued compensation expense for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31,

2023 2022 2021

10 unchanged sentences

123 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

1 unchanged sentence

The following tables summarize the Company’s loans payable and other financial liabilities as of December 31, 2023 and 2022:

Book value as of

December 31, 2022 December 31, 2021

(In millions)

Current loans payable and other financial liabilities:

Loans from banks $ 485 $ 319

4 unchanged sentences

Commercial Notes 7 6

Finance lease obligations 14 10

Finance lease liabilities 35 14

Collateralized debt 693 535

3 unchanged sentences

Other lines of credit 11 10

$ 2,131 $ 1,285

Non-Current loans payable and other financial liabilities:

Current loans payable and other financial liabilities $ 2,292 $ 2,131

Loans from banks $ 72 $ 145

3 unchanged sentences

Commercial Notes 211 187

Finance lease obligations 37 36

Finance lease liabilities 96 37

Collateralized debt 782 703

2 unchanged sentences

2031 Notes 626 694

$ 2,627 $ 2,233

Other lines of credit 2 —

Non-Current loans payable and other financial liabilities $ 2,203 $ 2,627

124 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Loans payable and other financial liabilities (continued)

Book value as of

Type of instrument Currency Interest Weighted Average Interest

Rate Maturity December 31, 2022 December 31, 2021

Rate Maturity December 31,

(In millions)

1 unchanged sentence

Chilean Subsidiaries Chilean Pesos Fixed 9.48 % January 2024 - April 2025 $ 104 $ 150

Brazilian Subsidiary US Dollar — — % — — 160

Brazilian Subsidiary (*) US Dollar Fixed 4.32 % August 2023 59 —

Brazilian Subsidiary (1)

US Dollar — — — — 59

Brazilian Subsidiary (1)

US Dollar Fixed 5.90 % August - November 2024 216 —

Brazilian Subsidiary Brazilian Reais Variable TJLP + 0.8 %

2 unchanged sentences

January 2024 - June 2027 178 177

Uruguayan Subsidiary Uruguayan Pesos Fixed 11.73 % January - June 2023 47 23

Colombian Subsidiary Colombian Pesos Fixed 14.69 % January - June 2023 22 16

Uruguayan Subsidiary Uruguayan Pesos Fixed 9.59 % January 2024 50 47

Colombian Subsidiary Colombian Pesos Fixed — — — 22

Bank overdrafts

Uruguayan Subsidiary Uruguayan Pesos Fixed 10.32 % January 2024 13 9

Argentine Subsidiary Argentine Pesos — — % — — 115

Brazilian Subsidiary Brazilian Reais — — % — — 4

Chilean Subsidiary Chilean Pesos Variable TIB + 2.00 %

January 2024 20 —

Secured lines of credit

3 unchanged sentences

Brazilian Subsidiary Brazilian Reais Variable CDI + 1.15 % - 1.40 %

% July 2023 - February 2024 113 92

March - September 2025 8 113

Deposit Certificates

Brazilian Subsidiary Brazilian Reais Variable IPCA + 5.25 - 7.15

% February - May 2023 272 —

Brazilian Subsidiary Brazilian Reais — — — — 272

Brazilian Subsidiary Brazilian Reais Variable 98.5 % to 200 % of CDI

January 2023 - September 2024 565 521

January - December 2024 703 565

Brazilian Subsidiary Brazilian Reais Fixed 9.85 % - 14.20 %

% January - July 2023 114 41

January - June 2024 77 114

Brazilian Subsidiary Brazilian Reais Variable 106 % of CDI

February 2023 45 23

January 2024 196 45

Commercial Notes

3 unchanged sentences

January 2024 - August 2029 140 122

Finance lease obligations 51 46

Finance lease liabilities 131 51

Collateralized debt 1,475 1,238

2028 Notes 439 315

2026 Sustainability Notes 402 401

2031 Notes 704 704

2028 Notes US Dollar — — — — 439

2026 Sustainability Notes US Dollar Fixed 2.375 % January 2024 - January 2026 393 402

2031 Notes US Dollar Fixed 3.125 % January 2024 - January 2031 635 704

Other lines of credit 13 10

$ 4,495 $ 4,758

(*) The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge.

(1) The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge accounting.

See Note 24 – Derivative instruments of these audited consolidated financial statements for further detail.

See Notes 21 and 23 of these audited consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease obligations, respectively.

125 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Loans payable and other financial liabilities (continued)

See Note 21 – Securitization transactions and Note 23 – Leases of these audited consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease liabilities, respectively.

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

6 unchanged sentences

If the Company experiences certain change of control triggering events, it may be required to offer to purchase the notes at 101 % of their principal amount plus any accrued and unpaid interest thereon through the purchase date.

During 2023, the Company repurchased $ 9 million and $ 70 million principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively plus $ 1 million of interest accrued.

The total amount paid amounted to $ 66 million.

For the year ended December 31, 2023, the Company recognized $ 14 million as a gain in Interest income and other financial gains in the consolidated statement of income.

The Company intends to allocate an amount equal to the net proceeds from the issuance of the 2026 Sustainability Notes to finance or refinance Eligible Projects.

18 unchanged sentences

2.00 % Convertible Senior Notes Due 2028

On August 24, 2018, the Company issued $ 800 million of 2.00 % Convertible Senior Notes due 2028 and issued an additional $ 80 million of notes on August 31, 2018 pursuant to the partial exercise of the initial purchasers’ option to purchase such additional notes, for an aggregate principal amount of $ 880 million of 2.00 % Convertible Senior Notes due 2028 (collectively, the “2028 Notes”).

The 2028 Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on February 15 and August 15 of each year, at a rate of 2.00 % per annum.

The 2028 Notes will mature on August 15, 2028 unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date.

The 2028 Notes may be converted, under specific conditions, based on an initial conversion rate of 2.2553 shares of common stock per $ 1,000 principal amount of the 2028 Notes (equivalent to an initial conversion price of $ 443.40 per share of common stock), subject to adjustment as described in the indenture governing the 2028 Notes.

The Company will not have the right to redeem the notes prior to August 21, 2023.

On or after August 21, 2023, if the last reported sale price of the Company’s common stock has been at or above 130 % of the conversion price during specified periods, the Company may (at its option) redeem all or any portion of the 2028 Notes for cash equal to the 2028 Notes’ principal amount plus accrued and unpaid interest to, but excluding the redemption date.

The 2028 Notes were unsecured, unsubordinated obligations of the Company, which paid interest in cash semi-annually, on February 15 and August 15 of each year, at a rate of 2.00 % per annum.

The 2028 Notes would have matured on August 15, 2028 unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date.

The 2028 Notes were convertible, under specific conditions, based on an initial conversion rate of 2.2553 shares of common stock per $1,000 principal amount of the 2028 Notes (equivalent to an initial conversion price of $ 443.40 per share of common stock), subject to adjustment as described in the indenture governing the 2028 Notes.

The Company did not have the right to redeem the notes prior to August 21, 2023.

On or after August 21, 2023, if the last reported sale price of the Company’s common stock was at or above 130 % of the conversion price during specified periods, the Company could (at its option) redeem all or any portion of the 2028 Notes for cash equal to the 2028 Notes’ principal amount plus accrued and unpaid interest to, but excluding the redemption date.

126 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Loans payable and other financial liabilities (continued)

Holders are able to convert their 2028 Notes at their option at any time prior to February 15, 2028 only under the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

Holders were able to convert their 2028 Notes at their option at any time prior to February 15, 2028 only under the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter was greater than or equal to 130 % of the conversion price on each applicable trading day;

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2028 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

(3) if the Company calls any or all of the 2028 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

(3) if the Company called any or all of the 2028 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

or (4) upon the occurrence of specified corporate events.

On or after February 15, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2028 Notes at any time, regardless of the foregoing circumstances.

During the year ended December 31, 2022, seven Notes were requested for conversion, for a total principal amount of $ 7 thousand.

The Company reconfirmed during the fourth quarter of 2022 that the conversion threshold was met and the Notes remain eligible for conversion.

The determination of whether or not the Notes are convertible must continue to be performed on a quarterly basis.

From January 1, 2023 to the date of issuance of these consolidated financial statements, additional conversion requests for two notes were made.

The Company has entered into capped call transactions with respect to shares of its common stock with certain financial institutions (the “2028 Notes Capped Call Transactions”).

The 2028 Notes Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the 2028 Notes in the event that the market price of the Company’s Common Stock is greater than the strike price and lower than the cap price of the 2028 Notes Capped Call Transactions.

The amounts the Company has paid, including transaction expenses, are as follows:

Capped call trading date Amount

(In millions)

August 2018 (*) $ 92

November 2018 (*) 11

June 2019 (**) 88

June 2020 (**) 104

August, 2020 83

November, 2020 120

January, 2021 101

(*) Totally unwinded in 2021.

(**) Partially unwinded in 2021.

In addition, the Company paid $ 8 million in November 2019 to amend the strike and cap prices of the capped call transaction purchased in November 2018.

The cost of the 2028 Notes Capped Call Transactions is included as a net reduction to additional paid-in capital in the stockholders’ equity section of the consolidated balance sheets.

In June and August 2021, the Company terminated certain of its 2028 Notes Capped Call Transactions and received as consideration $ 102 million in cash and 57,047 shares of Common Stock, and $ 295 million in cash and 89,978 shares of Common Stock, respectively.

Cash proceeds of terminating certain of the 2028 Notes Capped Call Transactions in June and August 2021 were used to repurchase 71,175 shares and 158,413 shares of Common Stock, respectively.

Based on the $ 846.24 closing price of the Company’s Common Stock on December 31, 2022 and if the stock price remains constant, the Company could obtain 177,016 shares of Common Stock on the 2028 Notes Capped Calls Transactions settlement date.

On or after February 15, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders could convert their 2028 Notes at any time, regardless of the foregoing circumstances.

In January 2021, the Company repurchased $ 440 million principal amount of the outstanding of the 2028 Notes.

4 unchanged sentences

The remaining consideration of $ 1,484 million (net of income tax effects) was allocated to the reacquisition of the equity component and recognized as a reduction of stockholders’ equity.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Loans payable and other financial liabilities (continued)

The total estimated fair value of the 2028 Notes were $ 884 million and $ 1,367 million as of December 31, 2022 and December 31, 2021, respectively.

The fair value was determined based on the closing trading price per $ 100 principal amount of the 2028 Notes as of the last day of trading for the period.

The Company considered the fair value of the 2028 Notes as of December 31, 2022 and December 31, 2021 to be a Level 2 measurement.

The fair value of the 2028 Notes is primarily affected by the trading price of the Company’s common stock and market interest rates.

Based on the $ 846.24 closing price of the Company’s common stock on December 31, 2022, the if-converted value of the 2028 Notes exceeds their principal amount by $ 399 million.

As of December 31, 2022, the principal and issuance costs of the 2028 Notes amounted to $ 439 million and $ 3 million, respectively.

On September 19, 2023, the Company announced its intention to redeem all its 2028 Notes on November 14, 2023.

Holders of the 2028 Notes could elect to convert their notes at any time before November 13, 2023.

Each $1,000 principal amount of 2028 Notes was convertible into 2.2952 shares of MercadoLibre common stock.

This conversion rate reflected an increase of 0.0399 additional shares per $1,000 principal amount of 2028 Notes above the otherwise applicable conversion rate, which applied because the notes were called for redemption.

The Company settled any conversions solely in shares of common stock, except that any fractional shares that would otherwise be deliverable were paid out in cash.

The redemption price paid for any notes that were not converted was 100% of the redeemed notes’ principal amount plus accrued and unpaid interest up to, but excluding, the redemption date.

As of November 13, 2023, holders of the 2028 Notes converted $ 439 million principal amount of 2028 Notes into 1,007,597 shares of the Company’s common stock which MercadoLibre held as treasury stock.

As of December 31, 2023, no principal amount of 2028 Notes remained outstanding.

As of December 31, 2022, the principal and issuance costs of the 2028 Notes amounted to $ 439 million and $ 3 million, respectively.

The following table presents the interest expense for contractual interest, the accretion of debt discount and the amortization of debt issuance costs:

The Company entered into 2028 Notes Capped Call Transactions.

The 2028 Notes Capped Call Transactions were expected generally to reduce the potential dilution upon conversion of the 2028 Notes in the event that the market price of the Company’s common stock was greater than the strike price and lower than the cap price of the 2028 Notes Capped Call Transactions.

In June and August 2021, the Company terminated certain of its 2028 Notes Capped Call Transactions and received as consideration $ 102 million in cash and 57,047 shares of common stock, and $ 295 million in cash and 89,978 shares of Common Stock, respectively.

Cash proceeds of terminating certain of the 2028 Notes Capped Call Transactions in June and August 2021 were used to repurchase 71,175 shares and 158,413 shares of common stock, respectively.

The settlement averaging period with respect to the 2028 Notes Capped Call Transactions began on June 28, 2023 and ended on August 30, 2023, and the 2028 Notes Capped Call Transactions settlement date was September 1, 2023.

As a result the Company received 289,675 shares of common stock.

The following table presents the interest expense for contractual interest, the amortization of debt discount and of debt issuance costs:

Year ended December 31,

5 unchanged sentences

Total interest expense related to the 2028 Notes $ 7 $ 9 $ 25

(*) For the year ended December 31, 2022 no amortization of debt discount was recorded due to the adoption of ASU 2020-06.

See Note 2 "Summary of significant accounting policies - Recently Adopted Accounting Standards" for further detail.

(1) For the years ended December 31, 2023 and 2022 no amortization of debt discount was recorded due to the adoption of ASU 2020-06.

Revolving Credit Agreement

6 unchanged sentences

have guaranteed the Company’s obligations.

127 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The interest rates under the Credit Agreement are based on Adjusted Term SOFR (“Secured Overnight Funding Rate”) plus an interest margin of 1.25 % per annum.

8 unchanged sentences

On April 8, 2022, the Company entered into an Advisory Services Agreement with Mr.

Stelleo Tolda (former Mercado Libre’s Executive officer) whereby he will provide the Company with certain consulting and advisory services as an independent contractor for a three-year period for a fee of $ 10,000 per month.

Stelleo Tolda (former MercadoLibre’s Executive officer) whereby he will provide the Company with certain consulting and advisory services as an independent contractor for a three-year period for a fee of $ 10,000 per month.

The Company also entered into a restricted stock award agreement with Mr.

3 unchanged sentences

Tolda’s continued compliance with the restrictive covenants set forth in the agreement.

As of December 31, 2023, Mr.

Tolda continues to comply with the aforementioned restrictive covenants.

128 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

14 unchanged sentences

Gross profit 1,073 1,284 1,348 1,458

Net (loss) Income ( 34 ) 68 95 ( 46 )

Net (loss) Income per share-basic ( 0.68 ) 1.37 1.92 ( 0.92 )

Net (loss) Income per share-diluted ( 0.68 ) 1.37 1.92 ( 0.92 )

Net Income 65 123 129 165

Net Income per share-basic 1.30 2.43 2.57 3.28

Net Income per share-diluted 1.30 2.43 2.56 3.25

Weighted average shares

13 unchanged sentences

129 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

SECURITIZATION TRANSACTIONS

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

The Company securitizes financial assets associated with its credit cards and loans receivable portfolio.

The Company’s securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote special purpose entities (“SPEs”).

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 cards receivable related to users’ purchases through Argentine and Chilean SPEs.

The Company securitizes certain credit card receivables related to users’ purchases through Chilean SPEs.

Under the SPE contracts, the Company has determined that it has no obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it does not retain any equity certificate of participation or subordinated interest in the SPEs.

As the Company does not control the vehicles, its assets, liabilities and related results are not consolidated in the Company’s financial statements.

Additionally, the Company securitizes certain credit cards receivable related to users’ purchases through Brazilian SPEs.

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.

4 unchanged sentences

130 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Securitization transactions (continued)

The following table summarizes the Company’s collateralized debt under securitization transactions, as of December 31, 2023:

1 unchanged sentence

Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados $ 208 CDI + 2.50 %

Brazilian Reais June 2025

Fundo de Investimento Em DireitosCreditórios Arandu 192 CDI + 1.75 %

Brazilian Reais June 2023

Brazilian Reais May 2025

Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado 17 CDI + 3.50 %

3 unchanged sentences

Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados 151 CDI + 2.35 %

Brazilian Reais April 2028

Mercado Crédito Consumo VIII 3 Badlar rates plus 200 basis points with a min 30 % and a max 50 %

Brazilian Reais January 2030

Seller Fundo De Investimento Em Direitos Creditórios 208 CDI + 1.60 %

Brazilian Reais March 2026

Seller Fundo De Investimento Em Direitos Creditórios 104 CDI + 1.80 %

Brazilian Reais May 2026

Seller Fundo De Investimento Em Direitos Creditórios 42 CDI + 1.40 %

Brazilian Reais September 2026

Seller Fundo De Investimento Em Direitos Creditórios 21 CDI + 1.60 %

Brazilian Reais November 2026

Mercado Crédito Consumo XIX 1 Badlar rates plus 200 basis points with a min 60 % and a max 92 %

Argentine Pesos February 2024

Mercado Crédito Consumo IX 9 Badlar rates plus 200 basis points with a min 30 % and a max 52 %

Argentine Pesos May 2023

Mercado Crédito Consumo X 13 Badlar rates plus 200 basis points with a min 35 % and a max 62 %

Mercado Crédito Consumo XX 5 Badlar rates plus 200 basis points with a min 60 % and a max 92 %

Argentine Pesos March 2024

Mercado Crédito Consumo XXI 7 Badlar rates plus 200 basis points with a min 80 % and a max 120 %

Argentine Pesos June 2024

Mercado Crédito Consumo XI 16 Badlar rates plus 200 basis points with a min 35 % and a max 63 %

Mercado Crédito Consumo XXII 8 Badlar rates plus 200 basis points with a min 80 % and a max 120 %

Argentine Pesos June 2024

Mercado Crédito Consumo XXIII 8 Badlar rates plus 200 basis points with a min 80 % and a max 120 %

Argentine Pesos August 2024

Mercado Crédito Consumo XII 16 Badlar rates plus 200 basis points with a min 35 % and a max 70 %

Argentine Pesos September 2023

Mercado Crédito Consumo XIII 16 Badlar rates plus 200 basis points with a min 35 % and a max 74 %

Argentine Pesos November 2023

Mercado Crédito Consumo XIV 16 Badlar rates plus 200 basis points with a min 35 % and a max 80 %

Argentine Pesos October 2023

Mercado Crédito Consumo XV 16 Badlar rates plus 200 basis points with a min 35 % and a max 92 %

Mercado Crédito Consumo XXIV 8 Badlar rates plus 200 basis points with a min 100 % and a max 140 %

Argentine Pesos October 2024

Mercado Crédito XIII 2 Badlar rates plus 200 basis points with a min 30 % and a max 46 %

Argentine Pesos April 2023

Mercado Crédito XIV 6 Badlar rates plus 200 basis points with a min 30 % and a max 48 %

Mercado Crédito Consumo XXV 9 Badlar rates plus 200 basis points with a min 100 % and a max 150 %

Argentine Pesos November 2024

Mercado Crédito Consumo XXVI 9 Badlar rates plus 200 basis points with a min 100 % and a max 160 %

Argentine Pesos November 2024

Mercado Crédito Consumo XXVII 9 Badlar rates plus 200 basis points with a min 100 % and a max 180 %

Argentine Pesos March 2025

Mercado Crédito XV 13 Badlar rates plus 200 basis points with a min 30 % and a max 56 %

Mercado Crédito XIX 6 Badlar rates plus 200 basis points with a min 100 % and a max 140 %

Argentine Pesos August 2024

Mercado Crédito XVI 12 Badlar rates plus 200 basis points with a min 35 % and a max 80 %

Argentine Pesos September 2023

Mercado Crédito XVII 14 Badlar rates plus 200 basis points with a min 35 % and a max 88 %

Argentine Pesos March 2024

Mercado Crédito XVIII 22 Badlar rates plus 200 basis points with a min 35 % and a max 92 %

Argentine Pesos January 2024

Mercado Crédito XX 4 Badlar rates plus 200 basis points with a min 100 % and a max 170 %

Argentine Pesos December 2024

Fideicomiso de administración y fuente de pago CIB/3756 247 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.35 %

Mexican Pesos September 2024

Mexican Pesos August 2026

Fideicomiso de administración y fuente de pago CIB/3369 30 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 7.0 %

Mexican Pesos April 2025

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Securitization transactions (continued)

Fideicomiso de administración y fuente de pago CIB/3369 269 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.0 %

Mexican Pesos April 2025

This secured debt is issued by the SPEs and includes collateralized securities used to fund the Company’s Fintech business.

1 unchanged sentence

Additionally, the cash flows generated by the SPEs are restricted to the payment of amounts due to third-party investors, but the Company retains the right to residual cash flows.

The assets and liabilities of the SPEs are included in the Company’s consolidated financial statements as of December 31, 2022 and 2021, as follows:

131 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The assets and liabilities of the SPEs are included in the Company’s audited consolidated financial statements as of December 31, 2023 and 2022, as follows:

Assets (In millions)

4 unchanged sentences

Total current assets 1,658 1,575

Non-current assets:

Long-term investments 23 21

14 unchanged sentences

Pursuant to the Offering, the Company issued 1,000,000 shares of common stock, par value $ 0.001 per share (the “Common Stock”).

T he Company raised funds in the amount of $ 1,520 million net of issuance costs paid.

The Company raised funds in the amount of $ 1,520 million net of issuance costs paid.

132 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The Company leases certain fulfillment, cross docking and service centers, office space, aircraft, machines and vehicles in the various countries in which it operates.

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.

7 unchanged sentences

Property and equipment, net $ 133 $ 56

Loans payable and other financial liabilities $ 51 $ 46

Finance lease liabilities $ 131 $ 51

The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases as of December 31, 2023:

Year Ended December 31,

Weighted average remaining lease term

Operating leases 8 Years

Finance leases 3 Years

Operating leases 8 Years 8 Years

Finance leases 3 Years 3 Years

Weighted average discount rate (1)

12 unchanged sentences

Variable lease cost (1)

$ 35 $ 17 $ 13

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

133 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Leases (continued)

Supplemental cash flow information related to leases was as follows:

21 unchanged sentences

DERIVATIVE INSTRUMENTS

Cash Flow Hedge

Cash flow hedges

As of December 31, 2023, the Company used foreign currency exchange contracts to hedge the foreign currency effects related to the forecasted purchase of MPOS devices in U.S.

dollars owed by a Brazilian subsidiary whose functional currency is the Brazilian Reais.

The Company designated the foreign currency exchange contracts as cash flow hedges, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings.

As of December 31, 2022, 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 earnings within the next 12 months.

In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its financial debt issued by one of its Brazilian subsidiaries.

dollars owed by a Brazilian subsidiary whose functional currency is the Brazilian Real.

The Company designated the foreign currency exchange contracts as cash flow hedges, the 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” line item, in the same period the forecasted transaction affects earnings.

As of December 31, 2023, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into the consolidated statements of income within the next 12 months.

In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its financial debt held by one of its Brazilian subsidiaries.

The Company designated the swap contracts as cash flow hedges.

The derivative’s gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into earnings within the next 12 months.

Fair Value Hedge

The Company has entered into a swap contract to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt issued by one of its Brazilian subsidiaries.

The Company designated the swap contract as fair value hedge.

The derivative’s gain or loss is reported in earnings in the same line items as the change in the value of the financial debt due to the hedged risks.

Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debt is recorded at the floating rate.

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” line item 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.

134 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Derivative Instruments (continued)

Net investment hedge

1 unchanged sentence

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 derivative’s gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into earnings in the same period that the interest expense affects earnings.

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 “Interest expense and other financial losses” and “Foreign currency losses, net” line items, in the same period that the interest expense affects earnings.

Derivative instruments not designated as hedging instruments

As of December 31, 2023, the Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S.

dollars of certain of its Brazilian and Mexican subsidiaries, whose functional currencies are the Brazilian Reais and Mexican Peso, respectively.

dollars of certain of its Brazilian subsidiaries, whose functional currencies are the Brazilian Real.

These transactions were not designated as hedges for accounting purposes.

14 unchanged sentences

Interest rate swap contracts 245 480

Cross currency swap contracts — 160

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Derivative Instruments (continued)

Derivative instruments contracts

The fair values of the Company’s outstanding derivative instruments as of December 31, 2023 and December 31, 2022 were as follows:

Balance sheet location 2022 2021

Derivative Instruments Balance sheet location

(In millions)

Derivative Instruments

Cross currency swap contracts not designated as hedging instruments Other current assets — 8

Foreign exchange contracts designated as cash flow hedges Other current assets $ — $ 1

Cross currency swap contracts designated as net investment hedge Other non-current assets — 7

Cross currency swap contracts designated as fair value hedge Other current assets 1 —

Interest rate swap contracts not designated as hedging instruments Other non-current assets 22 —

Cross currency swap contracts designated as net investment hedge Other current liabilities 6 2

Cross currency swap contracts not designated as hedging instruments Other current liabilities — 5

Interest rate swap contracts designated as cash flow hedges Other current liabilities — 8

5 unchanged sentences

Cross currency swap contracts designated as net investment hedge Other non-current liabilities — 1

The effects of derivative contracts on the Consolidated Statement of Comprehensive Income as of December 31, 2022 and December 2021 were as follows:

2021 Amount of loss recognized in other comprehensive loss Amount of loss reclassified from accumulated other comprehensive loss (income) December 31,

135 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

The effects of derivative contracts designated as hedging instruments on the consolidated statements of comprehensive income as of December 31, 2023 and December 2022 were as follows:

2022 Amount of gain (loss) recognized in other comprehensive income Amount of (gain) loss reclassified from accumulated other comprehensive loss December 31,

(In millions)

3 unchanged sentences

$ ( 5 ) $ ( 13 ) $ 11 $ ( 7 )

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

Derivative Instruments (continued)

The effect of the Company’s fair value hedge relationships on the Consolidated Statements of Income for the year ended December 31, 2022 is less than $ 1 million (there were no fair value hedge relationships during the years ended December 31, 2021 and 2020).

The carrying amount of the hedged item for fair value hedges as of December 31, 2022 is $ 59 million (there were no fair value hedge relationships as of December 31, 2021 and 2020).

The effect of the Company’s fair value hedge relationships on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges for the year ended December 31, 2022 is less than $ 1 million (there were no fair value hedge relationships during the years ended December 31, 2021 and 2020).

The effects of derivative contracts not designated as hedging instruments on the Consolidated Statement of Income during the years ended December 31, 2022, 2021 and 2020 were as follows:

Years ended December 31,

The effect of the Company’s fair value hedge relationships on the consolidated statements of income for the years ended December 31, 2023 and 2022 was a loss of $ 19 million and a loss of less than $ 1 million, respectively, and affected interest expense and other financial losses and foreign exchange losses, net (there were no fair value hedge relationships during the year ended December 31, 2021).

The carrying amount of the hedged items for fair value hedges included in the “Loans payable and other financial liabilities” line item of the consolidated balance sheets as of December 31, 2023 and 2022 are $ 216 million and $ 59 million, respectively.

The effect of the Company’s fair value hedge relationships on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of December 31, 2023 and 2022 are $ 1 million and less than $ 1 million, respectively (there were no fair value hedge relationships during the year ended December 31, 2021).

The effects of derivative contracts not designated as hedging instruments on the consolidated statements of income during the years ended December 31, 2023, 2022 and 2021 were as follows:

Year Ended December 31,

2023 2022 2021

(In millions)

Foreign exchange contracts not designated as hedging instruments recognized in foreign exchange, net ( 10 ) ( 2 ) 2

Currency swap contracts not designated as hedging instruments recognized in foreign exchange, net ( 29 ) 2 —

Interest rate contracts not designated as hedging instruments recognized in interest and other, net ( 7 ) — —

Foreign exchange contracts not designated as hedging instruments recognized in Foreign currency losses, net $ ( 11 ) $ ( 10 ) $ ( 2 )

Currency swap contracts not designated as hedging instruments recognized in Foreign currency losses, net — ( 29 ) 2

Interest rate contracts not designated as hedging instruments recognized in Interest expense and other financial losses 2 ( 7 ) —

$ ( 9 ) $ ( 46 ) $ —

136 | MercadoLibre, Inc.

MercadoLibre, Inc.

Notes to Consolidated Financial Statements

SHARE REPURCHASE PROGRAM

On August 4, 2021, the Board authorized the Company to repurchase shares of the Company’s common stock, for aggregate consideration of up to $ 150 million.

This authorization, was scheduled to expire on August 31, 2022 .

On March 1, 2022, the Board authorized an increase in that Authorization of $ 300 million, from an aggregate consideration of up to $ 150 million to an a ggregate consideration of up to $ 450 million (the "Existing Program") .

On March 1, 2022, the Board also authorized a new extension of the term of the Existing Program , from August 31, 2022 to August 31, 2023.

As of December 31, 2022 , the estimated remaining balance available for share repurchases under this authorization was $ 48 million.

On February 21, 2023, the Board terminated the Existing Program and authorized a new program to repurchase shares of the Company’s common stock, for aggregate consideration of up to $ 900 million to expire on March 31, 2024.

The Company expects to purc hase shares at any time and from time to time, in compliance with applicable federal securities laws, through open-market purchases, block trades, derivatives, trading plans established in accordance with SEC rules, or privately negotiated transactions.

On February 21, 2023, the Board authorized the Company to repurchase shares of the Company’s common stock, for an aggregate consideration of up to $ 900 million to expire on March 31, 2024.

As of December 31, 2023, the estimated remaining balance available for share repurchases under this Program was $ 157 million.

The Company expects to purchase shares at any time and from time to time, in compliance with applicable federal securities laws, through open-market purchases, block trades, derivatives, trading plans established in accordance with SEC rules, or privately negotiated transactions.

The timing of repurchases will depend on factors including market conditions and prices, the Company’s liquidity requirements and alternative uses of capital.

The share repurchase program may be suspended from time to time or discontinued, and there is no assurance as to the number of shares that will be repurchased under the program or that there will be any repurchases.

As of December 31, 2022, the Company had acquired 291,132 shares under the aforementioned share repurchase programs.

As of December 31, 2023, the Company had acquired 278,917 shares under the aforementioned share repurchase program.

From time to time, the Company acquires shares of its own common stock in the Argentine market and pays for them in Argentine Pesos at a price that reflects the additional cost of accessing U.S.

1 unchanged sentence

dollars, because of restrictions imposed by the Argentine government for buying U.S.

dollars at the official exchange rate in Argentina (See Note 2 - “Summary of significant accounting policies - Argentine currency status” of these audited consolidated financial statements).

As a result, the Company recognized foreign currency losses of $ 141 million and $ 90 million for the years ended December 31, 2022 and 2021, respectively.

dollars at the official exchange rate in Argentina (See Note 2 – Summary of significant accounting policies – Argentine currency status and macroeconomic outlook of these audited consolidated financial statements).

As a result, the Company recognized foreign currency losses o f $ 386 million, $ 141 million and $ 90 million for the years ended December 31, 2023, 2022 and 2021, respectively.

137 | MercadoLibre, Inc.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures