What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-21 compared with 2024-02-23 · 441 added, 321 removed, 455 unchanged (63% of the section changed)

5 unchanged sentences

■ a brief overview of our Company;

■ a review of our financial presentation and accounting policies, including our critical accounting policies and estimates;

■ a review of our critical accounting policies and estimates;

■ a discussion of our principal trends and results of operations for the years ended December 31, 2024, 2023 and 2022;

2 unchanged sentences

■ a description of our key performance indicators;

39 | MercadoLibre, Inc.

■ a description of our non-GAAP financial measures.

3 unchanged sentences

Business Overview

We are the largest online commerce ecosystem in Latin America based on unique visitors and orders processed, and we are present in 18 countries:

Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela, Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador.

Our platform is designed to provide users with a complete portfolio of services to facilitate commercial transactions both digitally and offline.

Through our e-commerce platform, we provide buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people and with one of the fastest-growing Internet penetration and e-commerce growth rates in the world.

We are the largest online commerce and fintech ecosystem in Latin America based on unique visitors and orders processed, and our fintech platform is the leader in MAUs amongst fintech companies in Argentina, Chile and Mexico, and the second largest in Brazil.

Mercado Libre's e-commerce platform is present in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela, Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in 8 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador).

Our ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online and the processing of payments online and offline, as well as offering a wide array of simple day-to-day financial services.

We offer our users an ecosystem of integrated e-commerce and digital financial services, which includes:

the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and the Mercado Libre Classifieds service.

Our e-commerce platform provides buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people where penetration of e-commerce over total retail significantly lags benchmarks such as the United States of America ("U.S."), the U.K.

We believe that we offer world-class technological and commercial solutions that address the distinctive cultural and geographic challenges of operating a digital commerce platform in Latin America.

We offer our users an ecosystem of six integrated e-commerce services and digital financial services:

the Mercado Libre Marketplace, the Mercado Pago Fintech platform, the Mercado Envios logistics service, the Mercado Ads solution, the Mercado Libre Classifieds service and the Mercado Shops online storefronts solution.

The Mercado Libre Marketplace, is a fully-automated, topically-arranged and user-friendly online commerce platform, which can be accessed through our website and mobile app.

This platform enables us (when we act as sellers in our first party sales), merchants and individuals to list merchandise and conduct sales and purchases digitally.

The Marketplace has an ample assortment of products, with a wide range of categories such as consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods.

To complement the Mercado Libre Marketplace and enhance the user experience for our buyers and sellers, we developed Mercado Pago, an integrated digital payments solution.

Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplaces by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments.

Now, Mercado Pago is a full ecosystem of financial technology solutions both in the digital and physical world.

Our digital payments solution enables any MercadoLibre registered user to securely and easily send and receive digital payments and to pay for purchases made on any of Mercado Libre’s Marketplaces.

Currently, Mercado Pago processes and settles all transactions on our Marketplaces in Argentina, Brazil, Mexico, Chile, Colombia, Uruguay, Peru and Ecuador.

The Mercado Libre Marketplace is a user-friendly online commerce platform that can be accessed through our mobile app or website.

Third-party sellers ("3P") account for most of the GMV transacted on the Marketplace.

We complement this by selling directly to consumers on a first-party basis ("1P") in selected categories where we can enhance price competitiveness and assortment;

this accounts for less than 10% of GMV.

The Marketplace has an extensive assortment of products, with a wide range of categories including consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods.

We also have a selection of international products available, primarily from sellers in China and the U.S., through our cross-border trade (“CBT”) operations.

Our users can also list vehicles, properties and services they are looking to sell via Mercado Libre Classifieds.

These listings differ from our Marketplace listings because we charge placing fees only, not final value fees.

Mercado Envios is a logistics solution that is one of the value-added services that we offer to our sellers and buyers on our platform.

The logistics services we offer are an integral and crucial part of our value proposition as they reduce friction between buyers and sellers, allow us to have greater control over the full user experience and enable faster deliveries at a more competitive cost than would otherwise be available with third-party carriers.

Sellers that use Mercado Envios are eligible to access shipping subsidies that enable free or discounted shipping for consumers that buy sellers' goods on our Marketplace.

Our logistics network is built around fulfillment centers (which accounts for more than half of shipments), where sellers place their inventory in our warehouses, and cross-docking, where we collect items sold from sellers directly or via a network of thousands of partner stores ("MELI Places") where sellers drop off sold items that need to be fed into our logistics network.

MELI Places are also enabled for pick up of items purchased and processing of returns.

Our transportation network includes dedicated aircraft, trucks and thousands of last-mile delivery vans, the vast majority of which are owned and operated by our third-party carriers.

Our advertising platform, Mercado Ads, is another value-added service that we offer to sellers on our platform and brands both on- and off-platform.

The platform enables sellers and brands to access the millions of consumers that browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate.

This enables advertisers to target highly granular audiences.

The products we offer are Product Ads (sponsored listings), Brands Ads (product carrousels), Display Ads (banners) and Video Ads, the last two of which we are able to offer inventory off-platform as well as on our own Marketplace and fintech platform.

Mercado Shops is a service we offer to sellers to complement their business on our Marketplace.

It is a digital storefront solution that allows sellers to set up, manage and promote their own digital stores, whilst using Mercado Libre's logistics, advertising and payments services.

In January 2025, we announced the migration of Mercado Shops to "Mi Página," which offers similar functionalities but is fully embedded within our Marketplace (without an external storefront).

Mercado Shops will be discontinued as of December 31, 2025.

Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplace by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments.

This brought trust to the merchant-consumer relationship.

In the countries in which Mercado Pago operates, it processes and settles all transactions on our Marketplace.

Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre’s Marketplace.

We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America.

Today, Mercado Pago’s digital payments business not only allows merchants to facilitate checkout and payment processes on their websites through a branded or white label solution or software development kits, but it also enables users to transfer money in a simple manner to each other through the Mercado Pago website or on the Mercado Pago app.

Through Mercado Pago, we brought trust to the merchant customer relationship, allowing online consumers to shop easily and safely, while giving them the confidence to share sensitive personal and financial data with us.

Finally, we have also deepened our fintech offerings by growing our online-to-offline (“O2O”) products and services.

36 | MercadoLibre, Inc.

The Mercado Envios logistics solution enables sellers on our platform to utilize third-party carriers and other logistics service providers, while also providing them with fulfillment and warehousing services.

The logistics services we offer are an integral part of our value proposition, as they reduce friction between buyers and sellers, and allow us to have greater control over the full user experience.

Sellers that opt into our logistics solutions are not only able to offer a uniform and seamlessly integrated shipping experience to their buyers at competitive prices, but are also eligible to access shipping subsidies to offer free or discounted shipping for many of their sales on our Marketplaces.

In 2020, we launched Meli Air with a fleet of dedicated aircraft covering routes across Brazil and Mexico, with the aim of improving our delivery times.

We have also developed a network of independent neighborhood stores and commercial points (known as “Meli Places”) to receive and store packages that are in transit using our integrated technology.

Meli Places network allows buyers and sellers to pick-up, drop-off, or return packages with a better experience, reducing the travel distance for all parties.

As of December 31, 2023, we offer our shipping solution directed towards deliveries in Argentina, Brazil, Mexico, Chile, Colombia, Uruguay, Peru and Ecuador and we also offer free shipping to buyers in Argentina, Brazil, Mexico, Chile, Colombia, Uruguay and Peru.

Mercado Credito, our credit solution available in Argentina, Brazil, Mexico and Chile, leverages our user base, which is loyal and engaged, and in part has also been historically underserved or overlooked by financial institutions and suffers from a lack of access to needed credit.

Our lending solution is available in Argentina, Brazil, Mexico and Chile.

We offer credits mostly to merchants and consumers that already form part of our user base, many of whom have historically been underserved or overlooked by financial institutions and therefore suffer from a lack of access to credit.

Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution.

Our asset management product, which is available in Argentina, Brazil, Mexico and Chile, is a critical pillar to build our alternative two-sided network vision.

It incentivizes our users to begin to fund their digital wallets with cash as opposed to credit or debit cards given that the return our product offers is greater than traditional checking accounts.

As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago wallet in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively.

This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and exchange and offers the blockchain infrastructure platform.

This feature is available for all users through their Mercado Pago wallet.

Our advertising platform, Mercado Ads, enables businesses to promote their products and services on the Mercado Libre Marketplace and Mercado Pago Fintech platform.

Through our advertising platform, MercadoLibre’s brands and sellers are able to display ads on our webpages through product searches, banner ads, or suggested products.

Our advertising platform enables merchants and brands to access the millions of consumers that are on our Marketplaces at any given time with the intent to purchase, which increases the likelihood of conversion.

Advertisers are able to leverage our first-party data to create and target highly particularized audiences.

Through Mercado Libre Classifieds, our online classified listing service, our users can also list and purchase motor vehicles, real estate and services in the countries where we operate.

Classifieds listings differ from Marketplace listings as they only charge optional placement fees and not final value fees.

Our classifieds pages are also a major source of traffic to our platform, benefiting both the commerce and fintech businesses.

Complementing the services we offer, our digital storefront solution, Mercado Shops, allows users to set-up, manage and promote their own digital stores.

These stores are hosted by Mercado Libre and offer integration with the rest of our ecosystem, namely our Marketplaces, payment services and logistics services.

Users can create a store at no cost, and can access additional functionalities and value added services on commission.

40 | MercadoLibre, Inc.

Our asset management product, which is available in Argentina, Brazil, Mexico and Chile, is a critical pillar of our financial services offering that enables us to compete with large banks.

This product offers remuneration on balances held in the Mercado Pago digital account that is greater than traditional checking and savings accounts.

This enables our users to earn a return with funds remaining available for withdrawal or to make payments without their funds being tied up in a time deposit.

As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago account in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively.

This feature is available for all users through their Mercado Pago account.

In 2024, in Brazil and Mexico we launched "Meli Dólar", a stablecoin that is pegged to the US dollar.

Members of our loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without any fees.

Reporting Segments and Geographic Information

Our segment reporting is based on geography, which is the criterion our Management currently uses to evaluate our segment performance.

Our geographic segments are Brazil, Argentina, Mexico and Other Countries (including Chile, Colombia, Costa Rica, Ecuador, Peru and Uruguay).

Our geographic segments are Brazil, Mexico, Argentina and Other Countries (including Chile, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.).

Although we discuss long-term trends in our business, it is our policy not to provide earnings guidance in the traditional sense.

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We, therefore, encourage potential investors to consider this strategy before making an investment in our common stock.

The following table sets forth the percentage of our consolidated net revenues by segment for the years ended December 31, 2023, 2022 and 2021:

The following table sets forth the percentage of our consolidated net revenues and financial income by segment for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31,

(% of total consolidated net revenues) 2023 2022 2021

(% of total consolidated net revenues and financial income)

2024 2023 (1)

Brazil 54.9 % 51.8 % 53.8 %

Argentina 22.4 23.7 21.7

Mexico 22.4 20.3 17.6

Argentina 18.4 23.5 23.9

Other countries 4.3 4.4 4.7

37 | MercadoLibre, Inc.

The following table summarizes the changes in our net revenues by segment for the years ended December 31, 2023, 2022 and 2021:

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details.

The following table summarizes the changes in our net revenues and financial income by segment for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023

2023 2022 in Dollars in % 2022 2021 in Dollars in %

2024 2023 (1)

in Dollars in % 2023 (1)

in Dollars in %

(In millions, except percentages) (In millions, except percentages)

Brazil $ 11,406 $ 7,821 $ 3,585 45.8 % $ 7,821 $ 5,798 $ 2,023 34.9 %

Argentina 3,240 2,500 740 29.6 2,500 1,531 969 63.3

Mexico 4,664 3,071 1,593 51.9 3,071 1,893 1,178 62.2

Argentina (2)

3,818 3,550 268 7.5 3,550 2,575 975 37.9

Other countries 889 665 224 33.7 665 514 151 29.4

Total net revenues $ 14,473 $ 10,537 $ 3,936 37.4 % $ 10,537 $ 7,069 $ 3,468 49.1 %

Total net revenues and financial income

$ 20,777 $ 15,107 $ 5,670 37.5 % $ 15,107 $ 10,780 $ 4,327 40.1 %

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

(2) For the year ended December 31, 2024, the main driver of Argentina’s net revenues and financial income deceleration growth is partially explained by the average inter-annual increase of Argentina’s official exchange rate against U.S.

dollar during the first half of 2024 of 308.4% partially offset by an average inter-annual inflation rate in our Argentine segment of 275.9%, for the same period.

41 | MercadoLibre, Inc.

Critical Accounting Policies and Estimates

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For loans receivable that share similar risk characteristics such as product type, country, unpaid installments, days delinquent, and other relevant factors, we estimate the lifetime expected credit loss allowance based on a collective assessment.

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

The same methodology is applied for the measurement of the current expected credit losses (“CECL”) for the exposure to off balance sheet unused agreed loan commitment on credit cards portfolio.

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

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

Probability of default models (“PDs”) are estimated using a survival methodology;

these PDs are constructed using individual default information through time, taking into account the expected future delinquency rate (forward-looking models) using, since 2022, three probability-weighted macroeconomic scenarios (base, optimistic and pessimistic) following the increased complexity and possible outcomes of the global, regional and domestic macroeconomic performance, so that the models include macroeconomic outlook or projections and recent performance, instead of using one scenario as prior years.

For most of the products, probability of default models (“PDs”) are estimated using a survival methodology;

these PDs are constructed using individual default information through time, taking into account the expected future delinquency rate (forward-looking models) using three probability-weighted macroeconomic scenarios (base, optimistic and pessimistic) following the increased complexity and possible outcomes of the global, regional and domestic macroeconomic performance, so that the models include macroeconomic outlook or projections and recent performance.

With this model, we estimate marginal monthly default probabilities for each delinquency bucket, type of product and country.

Each marginal monthly probability of default represents a different possible scenario of default.

However, for new products with limited historical information such as asset-backed loans, we use a work-out approach for the estimation of the PD.

The exposure at default is equal to the receivables’ expected outstanding principal, interest and other allowable balances.

We estimate the exposure at default that the portfolio of loans would have in each possible moment of default, meaning for each possible scenario mentioned above.

For credit cards we estimate an amortization scheme based on historical information.

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.

For credit cards loans we estimate an amortization scheme based on historical information.

Also, for Brazil credit cards loans, we use, as applicable, a one month credit conversion factor (“CCF”) estimated according to terms and conditions, considering the increase in the volume of credit cards portfolio.

The loss given default (“LGD”) is the percentage of the exposure at default that is not recoverable.

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This percentage depends on days past due, type of product and country, and is estimated by measuring an average of historical recovery rates from defaulted credits.

The measurement of the current expected credit losses (“CECL”) is based on probability-weighted scenarios (probability of default for each month), in view of past events, current conditions and adjustments to reflect the reasonable and supportable forecast of future economic conditions.

Considering a hypothetical increase in the probability of default of 10%, we would have recognized an increase in our allowance for doubtful accounts for loans receivable of approximately $34 million.

For asset-backed products, since there is almost no information to apply either a work-out or Chainladder approach, we use the Basel III guidelines for credit risk management.

The measurement of the CECL is based on probability-weighted scenarios (probability of default for each month), in view of past events, current conditions and adjustments to reflect the reasonable and supportable forecast of future economic conditions.

Considering a hypothetical increase in the probability of default of 10%, we would have recognized an increase in our allowance for doubtful accounts for loans receivable and off-balance sheet unused agreed loan commitment on credit cards portfolio of approximately $61 million.

We believe that the accounting estimate related to allowance for doubtful accounts on loans receivable a critical accounting estimate because it requires Management to make complex assumptions and scenarios to estimate the CECL.

2 unchanged sentences

These estimates are based on our assessment of the facts and circumstances and historical information related to actions filed against the Company at each balance sheet date and are subject to change based upon new information and future events.

38 | MercadoLibre, Inc.

From time to time, we are involved in disputes that arise in the ordinary course of business.

4 unchanged sentences

Any of these consequences could materially harm our business and could have a material adverse impact on our financial position, results of operations or cash flows.

42 | MercadoLibre, Inc.

We are required to recognize a provision for income taxes based upon taxable income and temporary differences between the book and tax bases of our assets and liabilities for each of the tax jurisdictions in which we operate.

5 unchanged sentences

Please refer to Note 2 – Summary of significant accounting policies and Note 15 – Income taxes to our audited consolidated financial statements for additional information regarding income tax.

Recent accounting pronouncements

See Item 8 of Part II, “Financial Statements and Supplementary Data” and Note 2 – Summary of significant accounting policies—Recently Adopted Accounting Standards and Accounting Pronouncements Not Yet Adopted.

Results of operations

2 unchanged sentences

This information should be read in conjunction with our audited consolidated financial statements and the notes to those statements included elsewhere in this report.

Net revenues and financial income

We disaggregate revenues into four geographical reporting segments.

1 unchanged sentence

“Commerce” and “Fintech”.

Revenues from commerce transactions are mainly generated from:

Commerce revenues are mainly generated from:

■ marketplace fees that include final value fees and flat fees.

Final value fees represent a percentage of the sale value that is charged to the seller once an item is successfully sold and flat fees represent a fixed charge for transactions below a certain merchandise value;

Final value fees represent a percentage of the sale value that is charged to the seller once an item is successfully sold and flat fees represent a fixed charge for certain transactions below a certain merchandise value;

■ first party sales, which are generated when control of the good is transferred, upon delivery to our customers;

■ shipping fees, which are generated when a buyer elects to receive an item through our shipping service, net of the third-party carrier costs (when we act as an agent), and storage fees, which are charged to the seller for the utilization of the Company’s fulfillment facilities;

■ shipping fees, which are generated when a buyer elects to receive an item through our shipping service, net of the third-party carrier costs (when we act as an agent).

When the Company acts as principal, revenues derived from shipping services are recognized upon delivery of the good to the customer, and presented on a gross basis.

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

■ ad sales fees due to advertising services provided to sellers, vendors, brands and others, through performance products (product ads and brand ads) and display formats, which are recognized based on the number of clicks and impressions, respectively;

1 unchanged sentence

■ fees from other ancillary businesses.

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

Fintech revenues are attributable to:

■ commissions representing a percentage of the payment volume processed that are charged to sellers in connection with off-Marketplace platform transactions;

■ commissions from additional fees we charge when a buyer elects to pay in installments through our Mercado Pago platform, for transactions that occur either on or off our Marketplace platform;

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

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

■ revenues from our asset management product;

■ interest earned on investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains passed through to our Brazilian users in connection with our asset management product;

■ commissions that we charge from transactions carried out with Mercado Pago credit and debit cards;

2 unchanged sentences

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

39 | MercadoLibre, Inc.

■ fees from other ancillary services.

Although we also process payments on the Marketplace, we do not charge sellers an added commission for this service, as it is already included in the Marketplace final value fee that we charge.

Our Mercado Libre Marketplace is available in 18 countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Venezuela (deconsolidated since December 1, 2017) and Paraguay), while Mercado Pago and Mercado Envios are available in 8 countries (Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador).

43 | MercadoLibre, Inc.

Our Mercado Libre Marketplace is available in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela, Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in 8 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador).

The functional currency for each country’s operations is the country’s local currency, except for Argentina, where the functional currency is the U.S.

dollar due to Argentina’s status as a highly inflationary economy.

Our net revenues are generated in multiple foreign currencies and then translated into U.S.

Our net revenues and financial income are generated in multiple foreign currencies and then translated into U.S.

dollars at the average monthly exchange rate.

1 unchanged sentence

We have a highly fragmented customer revenue base given the large numbers of sellers and buyers who use our platforms.

For the years ended December 31, 2023, 2022 and 2021, no single customer accounted for more than 5.0% of our net revenues.

Our net revenues grew during the year 2023, boosted by the growth of our gross merchandise volume, total payment volume and credit portfolio.

The continued execution of our long-term strategies in Commerce and Fintech has enabled us to deliver record net revenues and profitability during the year.

The following table summarizes our consolidated net revenues for the years ended December 31, 2023, 2022 and 2021:

For the years ended December 31, 2024, 2023 and 2022, no single customer accounted for more than 5.0% of our net revenues and financial income.

Our net revenues and financial income grew during the year 2024, boosted by an increase in the share of shipping services where we act as principal, as opposed to agent, the growth of our gross merchandise volume, our lending solution originations and our total payment volume.

The following table summarizes our consolidated net revenues and financial income for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023

2023 2022 in Dollars in % 2022 2021 in Dollars in %

2024 2023 (1)

in Dollars in % 2023 (1)

in Dollars in %

(In millions, except percentages) (In millions, except percentages)

Net revenues $ 14,473 $ 10,537 $ 3,936 37.4% $ 10,537 $ 7,069 $ 3,468 49.1%

The following table summarizes our consolidated net revenues by revenue stream and geographic segment for the years ended December 31, 2023, 2022 and 2021:

Consolidated net revenues Year Ended December 31, Change from 2022 to 2023 Year Ended December 31, Change from 2021 to 2022

2023 2022 in Dollars in % 2022 2021 in Dollars in %

Net revenues and financial income $ 20,777 $ 15,107 $ 5,670 37.5% $ 15,107 $ 10,780 $ 4,327 40.1%

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

The following table summarizes our consolidated net revenues and financial income by revenue stream and geographic segment for the years ended December 31, 2024, 2023 and 2022:

Consolidated net revenues and financial income Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023

2024 2023 (1)

in Dollars in % 2023 (1)

in Dollars in %

(In millions, except percentages) (In millions, except percentages)

15 unchanged sentences

Total $ 20,777 $ 15,107 $ 5,670 37.5 % $ 15,107 $ 10,780 $ 4,327 40.1 %

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

44 | MercadoLibre, Inc.

See Note 9 – Segments of our audited consolidated financial statements for further information regarding our net revenues disaggregated by similar products and services for the years ended December 31, 2023, 2022 and 2021.

See Note 10 – Segments of our audited consolidated financial statements for further information regarding our net revenues and financial income disaggregated by similar products and services for the years ended December 31, 2024, 2023 and 2022.

Our Commerce revenues grew $3,958 million, or 48.3%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

This increase in Commerce revenues was primarily attributable to:

■ (i) an increase of $1,990 million in Commerce services revenues mainly related to a 30% increase in gross merchandise volume, (ii) a 25% increase in our shipped items and (iii) higher flat fee contributions for low gross merchandise volume transactions, which was offset by Shipping carrier costs, which are netted against revenues, that increased $653 million, from $1,809 million for the year ended December 31, 2022 to $2,462 million for the year ended December 31, 2023;

■ (i) an increase of $3,322 million in Commerce services revenues mainly related to a 15.0% increase in gross merchandise volume and (ii) higher flat fee contributions for low gross merchandise volume transactions.

Shipping carrier costs, which are netted against revenues, decreased $1,441 million, from $2,462 million for the year ended December 31, 2023 to $1,021 million for the year ended December 31, 2024, mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent;

■ an increase of $636 million in our revenues from Commerce products sales, mainly in Brazil and Mexico.

1 unchanged sentence

This increase is mainly generated by:

■ an increase of $1,038 million in our revenues from Fintech services, mainly related to a 48% increase in our total payment volume;

■ an increase of $645 million in our revenues from Financial services and income, mainly related to a 34.0% increase in our total payment volume, partially offset by a decrease of financial income as a result of lower interest rates mainly in Argentina;

■ an increase of $1,054 million in our Credits revenues, mainly as a consequence of higher originations.

The deceleration in our Fintech revenues growth responds largely to lower credits revenues growth rates, mainly in Brazil and Argentina, due to our initiatives to maintain portfolio exposure towards lower risk customers, lower risk products and increase exposure to lower risk geographies, allowing us to continue improving our past due loans ratio.

Commerce revenues in Brazil increased 56.0% in the year ended December 31, 2024 as compared to 2023.

This increase was generated by an increase of $1,070 million in our commerce services revenues and an increase of $370 million in our revenues from commerce products sales.

Fintech revenues grew by 18.9%, a $489 million increase, during the year ended December 31, 2023 as compared to 2022, mainly driven by an increase of $446 million in our revenues from fintech services and an increase of $53 million in our credits revenues.

This increase was generated by an increase of $2,040 million in our Commerce services revenues mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase of $486 million in our revenues from Commerce products sales.

Fintech revenues grew by 32.0%, a $1,059 million increase, during the year ended December 31, 2024 as compared to 2023, mainly driven by an increase of $767 million in our Credits revenues and an increase of $280 million in our revenues from Financial services and income.

Net revenues growth during the year ended December 31, 2024, as compared to 2023, was offset by the average increase of Brazil’s exchange rate against U.S.

dollar of 7.9%.

Commerce revenues in Mexico increased 55.2% in the year ended December 31, 2024 as compared to 2023.

This increase was generated by an increase of $955 million in our Commerce services revenues mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, and an increase of $138 million in our revenues from Commerce products sales.

Fintech revenues grew 45.8%, a $500 million increase, during the year ended December 31, 2024 as compared to 2023, mainly driven by an increase of $310 million in our Credits revenues and an increase of $184 million in our revenues from Financial services and income.

The main driver of Argentina’s net revenues and financial income deceleration growth is partially explained by the average inter-annual increase of Argentina’s official exchange rate against U.S.

dollar during the first half of 2024 of 308.4% partially offset by an average inter-annual inflation rate in our Argentine segment of 275.9% for the same period.

During the second half of 2024, the effect is partially offset as the average inter-annual inflation rate in our Argentine segment was 197.7% and the increase of Argentina’s official exchange rate against U.S.

dollar was 172.7%.

Commerce revenues in Argentina increased 11.6% in the year ended December 31, 2024, as compared to 2023.

This increase was generated by an increase of $171 million in our Commerce services revenues, partially offset by a decrease of $25 million in our revenues from Commerce products sales.

Fintech revenues grew 39.9%, a $564 million increase, during the year ended December 31, 2023 as compared to 2022, mainly driven by an increase of $388 million in our revenues from fintech services and an increase of $178 million in our credits revenues.

Commerce revenues in Mexico increased 54.4% in the year ended December 31, 2023, as compared to 2022.

This increase was generated by an increase of $617 million in our commerce services revenues and an increase of $80 million in our revenues from commerce products sales.

Fintech revenues grew 72.9%, a $424 million increase, during the year ended December 31, 2023 as compared to 2022, mainly driven by an increase of $278 million in our credits revenues and an increase of $144 million in our revenues from fintech services.

The following table sets forth our total net revenues and the sequential quarterly growth of these net revenues for the periods described below:

Fintech revenues grew 5.3%, a $122 million increase, during the year ended December 31, 2024 as compared to 2023, mainly driven by an increase of $146 million in our revenues from Financial services and income, partially offset by a decrease of $25 million in our Credits revenues.

45 | MercadoLibre, Inc.

The following table sets forth our total net revenues and financial income and the sequential quarterly growth of these net revenues and financial income for the periods described below:

Quarter Ended

1 unchanged sentence

(In millions, except percentages)

Net revenues $ 3,037 $ 3,415 $ 3,760 $ 4,261

Net revenues and financial income $ 4,333 $ 5,073 $ 5,312 $ 6,059

Percent change from prior quarter (2%) 17% 5% 14%

Net revenues $ 2,248 $ 2,597 $ 2,690 $ 3,002

Net revenues and financial income $ 3,186 $ 3,585 $ 3,927 $ 4,409

Percent change from prior quarter 2% 13% 10% 12%

Net revenues $ 1,378 $ 1,703 $ 1,858 $ 2,130

Net revenues and financial income $ 2,277 $ 2,638 $ 2,753 $ 3,112

Percent change from prior quarter 5% 16% 4% 13%

41 | MercadoLibre, Inc.

The following table sets forth the growth in net revenues in local currencies, for the years ended December 31, 2023 and 2022 as compared to the same periods in 2022 and 2021, respectively:

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

The following table sets forth the growth in net revenues and financial income in local currencies, for the years ended December 31, 2024 and 2023 as compared to the same periods in 2023 and 2022, respectively:

(% of revenue growth in Local Currency) 2023 to 2024 (1)

1 unchanged sentence

Brazil 58.5 % 30.2 %

Argentina (3)

Mexico 58.7 42.7

Argentina (3)

Other countries 44.1 26.1

4 unchanged sentences

See also the “Non-GAAP Measures of Financial Performance” section for details on FX neutral measures.

(3) Average inter-annual inflation rates in our Argentine segment for the years ended December 31, 2022 and 2021 was 70.7% and 48.1%, respectively.

This effect was partially offset by an average inter-annual increase of Argentina’s official exchange rate against the U.S.

dollar of 38.7% and 36.6% for the years ended December 31, 2022 and 2021, respectively.

During the first eleven months of 2023, the average intern-annual inflation rate and the increase of the average intern-annual Argentina’s official exchange rate against the U.S.

dollar were 120.4% and 107.8%, respectively.

During December 2023, the Argentine government devaluated its local currency by 55.4% and monthly inflation rate was 25.5%.

(3) For the year ended December 31, 2024, 2023 and 2022, the average inter-annual inflation rate in our Argentine segment was 236.8%, 127.9% and 70.7%, respectively.

See also "Item 1A.

Risk Factors - Risks related to doing business in Latin America - Local currencies used in the conduct of our business are subject to depreciation, volatility and exchange controls".

Cost of net revenues

Cost of net revenues primarily includes cost of goods sold, shipping operation costs (including warehousing costs), carrier and other operating costs, collection fees, sales taxes, funding costs related to our credits business, fraud prevention expenses, certain taxes on bank transactions, hosting and site operation fees, certain tax withholding related to export duties, compensation for customer support personnel and depreciation and amortization.

The following table presents cost of net revenues for the years indicated:

46 | MercadoLibre, Inc.

Cost of net revenues and financial expenses

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

The following table presents cost of net revenues and financial expenses for the years indicated:

Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023

2023 2022 in Dollars in % 2022 2021 in Dollars in %

2024 2023 (1)

in Dollars in % 2023 (1)

in Dollars in %

(In millions, except percentages) (In millions, except percentages)

Cost of net revenues $ 7,267 $ 5,374 $ 1,893 35.2% $ 5,374 $ 4,064 $ 1,310 32.2%

As a percentage of net revenues 50.2% 51.0% 51.0% 57.5%

For the year ended December 31, 2023 as compared to the year ended December 31, 2022, the increase in cost of net revenues was primarily attributable to a:

i) $625 million increase in shipping operating and carrier costs;

ii) $329 million increase in sales taxes (which includes $31 million of one-off expenses regarding ICMS-DIFAL tax contingency in Brazil, see Note 15 – Commitments and Contingencies - Interstate rate of ICMS-DIFAL on interstate sales under Law No.

iii) $314 million increase in collection fees, which was mainly attributable to our Brazilian and Mexican operations as a result of the higher transactions volume of Mercado Pago in those countries;

iv) $254 million increase in cost of goods sold mainly in Brazil and Mexico;

v) $213 million increase in other Fintech costs mainly related to higher funding costs in connection with our credits business;

and vi) $140 million increase in hosting and site operation fees (which includes $58 million of one-off expenses regarding certain disputed amounts from withholding income tax contingencies in Brazil , see note Note 15 – Commitments and Contingencies).

Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues, which are classified as a cost of net revenues.

These taxes represented 7.7%, 7.5% and 8.0% of net revenues for the years ended December 31, 2023, 2022 and 2021, respectively.

Cost of net revenues and financial expenses $ 11,200 $ 7,517 $ 3,683 49.0% $ 7,517 $ 5,582 $ 1,935 34.7%

As a percentage of net revenues and financial income

53.9% 49.8% 49.8% 51.8%

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

For the year ended December 31, 2024 as compared to the year ended December 31, 2023, the increase in cost of net revenues and financial expenses was primarily attributable to a:

i) $2,542 million increase in shipping operating and carrier costs mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent;

ii) $474 million increase in cost of sales of goods mainly in Brazil and Mexico, partially offset by a decrease in Argentina;

iii) $341 million increase in collection fees, which was mainly attributable to our Brazilian and Mexican operations as a result of growth of total payment volume of Mercado Pago in those countries;

iv) $202 million increase in sales taxes;

and v) $109 million increase in hosting and site operation fees.

Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues, which are classified as a cost of net revenues and financial expenses.

These taxes represented 6.6%, 7.7% and 7.5% of net revenues and financial income for the years ended December 31, 2024, 2023 and 2022, respectively.

Gross profit margins

Our gross profit margin is defined as total net revenues minus total cost of net revenues, as a percentage of net revenues.

Our gross profit margin is defined as total net revenues and financial income minus total cost of net revenues and financial expenses, as a percentage of net revenues and financial income.

Our cost structure is directly affected by the level of operations of our services, and our strategic plan on gross profit is built on factors such as an ample liquidity to fund expenses and investments and a cost-effective capital structure.

For the years ended December 31, 2024 and 2023, our gross profit margins were 46.1% and 50.2%, respectively.

The increase in our gross profit margin resulted primarily from the decrease in our cost of goods sold in Argentina and Mexico and customer experience expenses in Brazil and Mexico, partially offset by higher fintech costs in Argentina and Mexico, as a percentage of net revenues.

In the future, our gross profit margin could decline if we continue growing our sales of goods business, which has a lower pure product margin, building up our logistics network and if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues trend.

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The decrease in our gross profit margin resulted primarily from an increase in our shipping operating and carrier costs, as a percentage of net revenues and financial income mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, partially offset by a decrease of our other fintech costs, sales taxes and collection fees, as a percentage of net revenues and financial income.

In the future, our gross profit margin could continue declining if we maintain the growth of our sales of goods business, which has a lower pure product margin, building up our logistics network and if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues and financial income trend.

Product and technology development expenses

5 unchanged sentences

Product and technology development $ 1,934 $ 1,831 $ 103 5.6% $ 1,831 $ 1,099 $ 732 66.6%

As a percentage of net revenues 12.7% 10.4% 10.4% 8.4%

As a percentage of net revenues and financial income

9.3% 12.1% 12.1% 10.2%

47 | MercadoLibre, Inc.

For the year ended December 31, 2024, the increase in product and technology development expenses as compared to the year ended December 31, 2023, was primarily attributable to a:

i) $334 million increase in other product and technology development expenses mainly related to a one-off charge of $261 million due to the risk of losing the case became probable in certain disputed amounts regarding withholding income tax contingencies in Brazil and higher tax withholding in connection with intercompany export services billing duties;

ii) $332 million increase in salaries and wages mainly related to the increase of 13% in our product and technology development headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price;

and iii) $49 million increase in depreciation and amortization expenses mainly related to capitalized information and technology assets.

i) $181 million increase in salaries and wages mainly related to the increase of 17% in our product and technology development headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price;

and ii) $37 million increase in depreciation and amortization expenses mainly related to capitalized information and technology assets.

This increase was partially offset by a $148 million decrease in other product and technology development expenses mainly related to a one-off charge recorded during the year ended December 31, 2023, due to the risk of losing the case became probable in certain disputed amounts regarding withholding income tax contingencies in Brazil, partially offset by higher tax withholding in connection with intercompany export services billing duties.

We believe that product and technology development is one of our key competitive advantages and we intend to continue to invest in hiring engineers to meet the increasingly sophisticated product expectations of our customer base.

1 unchanged sentence

Our sales and marketing expenses consist primarily of costs related to marketing our platforms through online and offline advertising and agreements with portals, search engines and other sales expenses related to strategic marketing initiatives, charges related to our buyer protection program, the salaries of employees involved in these activities (including long term retention program compensation), chargebacks related to our Mercado Pago operations, branding initiatives, marketing activities for our users and depreciation and amortization expenses.

We carry out the majority of our marketing efforts on the Internet.

We enter into agreements with portals, search engines, social networks, ad networks and other sites in order to attract Internet users to the Mercado Libre Marketplace and convert them into registered users and active traders on our platform.

6 unchanged sentences

Sales and marketing $ 2,191 $ 1,736 $ 455 26.2% $ 1,736 $ 1,296 $ 440 34.0%

As a percentage of net revenues 12.0% 12.3% 12.3% 15.2%

As a percentage of net revenues and financial income

10.5% 11.5% 11.5% 12.0%

For the year ended December 31, 2024, the increase in sales and marketing expenses as compared to the year ended December 31, 2023 was primarily attributable to a:

i) $194 million increase in online and offline marketing expenses mainly in Brazil;

ii) $100 million increase in our buyer protection program expenses;

iii) $71 million increase in salaries and wages mainly related to the increase of 12% in our sales and marketing headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price;

iv) $27 million increase in sales expenses;

and v) $27 million increase in chargebacks.

43 | MercadoLibre, Inc.

i) $266 million increase in online and offline marketing expenses mainly in Brazil and Mexico;

ii) $57 million increase in chargebacks;

iii) $55 million increase in our buyer protection program expense;

and iv) $38 million increase in salaries and wages mainly related to the increase of 15% in our sales and marketing headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price.

Provision for doubtful accounts

5 unchanged sentences

Provision for doubtful accounts $ 1,858 $ 1,050 $ 808 77.0% $ 1,050 $ 1,073 $ (23) (2.1)%

As a percentage of net revenues 7.3% 10.2% 10.2% 6.2%

For the year ended December 31, 2023, as compared to the year ended December 31, 2022, the provision for doubtful accounts decreased $23 million.

Initiatives to maintain portfolio exposure towards lower risk customers, lower risk products and increase exposure to lower risk geographies, allowed us to continue improving our past due loans ratio from 39.9% as of December 31, 2022 to 29.5% as of December 31, 2023.

As a percentage of net revenues and financial income

8.9% 7.0% 7.0% 10.0%

For the year ended December 31, 2024, as compared to the year ended December 31, 2023, the provision for doubtful accounts increased by $808 million mainly due to the increase in originations growth at 75% (mainly related to the credit card), resulting in an increase in the average balance of the loans receivable portfolio of 62.8%.

48 | MercadoLibre, Inc.

General and administrative expenses

Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of non-employee directors, long term retention program compensation, expenses for legal, audit and other professional services, insurance expenses, office space rental expenses, changes in the fair value (for the year ended December 31, 2023) and impairment (for the years ended December 31, 2022 and 2021) of digital assets, travel and business expenses, as well as depreciation and amortization expenses.

Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of non-employee directors, long term retention program compensation, expenses for legal, audit and other professional services, contingencies, insurance expenses, office space rental expenses, changes in the fair value (for the years ended December 31, 2024 and 2023) and impairment (for the year ended December 31, 2022) of digital assets, travel and business expenses, as well as depreciation and amortization expenses.

Our general and administrative expenses include the costs of the following areas:

5 unchanged sentences

General and administrative $ 963 $ 766 $ 197 25.7% $ 766 $ 661 $ 105 15.9%

As a percentage of net revenues 5.3% 6.3% 6.3% 6.6%

For the year ended December 31, 2023, the increase in general and administrative expenses as compared to the year ended December 31, 2022 was primarily attributable to a $111 million increase in salaries and wages, mainly related to the increase in amounts accrued under the LTRPs as a consequence of the increase in our common stock price, and in the Argentine segment, as a consequence of higher average monthly inflation rate than the average monthly local currency devaluation.

This increase was partially offset by a $14 million gain due to changes in the fair value of digital assets, please see Note 2 – Summary of significant accounting policies, recently adopted accounting standards for further detail.

As a percentage of net revenues and financial income

4.6% 5.1% 5.1% 6.1%

For the year ended December 31, 2024, the increase in general and administrative expenses as compared to the year ended December 31, 2023 was primarily attributable to a:

i) $72 million increase in contingencies;

ii) $61 million increase in salaries and wages, mainly related to the increase of 17% in general and administrative headcount and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price;

and iii) $33 million increase in other general and administrative expenses mainly related to higher tax withholding in connection with intercompany export services billing duties.

Operating income margins

Our operating income margin is defined as income from operations as a percentage of net revenues.

Our operating income margin is defined as income from operations as a percentage of net revenues and financial income.

Our operating income margin is affected by our operating expenses structure, which mainly consists of our employees’ salaries, our sales and marketing expenses related to those activities we incurred to promote our services, provision for doubtful accounts mainly related to our loans receivable portfolio and product and technology development expenses, among other operating expenses.

1 unchanged sentence

As a result, we may experience decreases in our operating income margins.

For the year ended December 31, 2023, as compared to the year ended December 31, 2022, our operating margin increased from a margin of 9.8% to a margin of 12.6%.

This increase was mainly explained by a decrease in provision for doubtful accounts, as a percentage of net revenues and our improvement in cost of net revenues margins.

This increase was partially offset by one-off expenses of $351 million related to disputed amounts regarding certain tax contingencies in Brazil.

The year ended December 31, 2023’s financial results reflect our ongoing commitment to deliver sustainable and profitable growth.

44 | MercadoLibre, Inc.

For the year ended December 31, 2024, as compared to the year ended December 31, 2023, our operating margin decreased from a margin of 14.6% to a margin of 12.7%.

This decrease was mainly explained by an increase in cost of net revenues and financial expenses as a percentage of net revenues and financial income, mainly due to an increase in the share of shipping services where we act as principal as opposed to agent, and provision of doubtful accounts, as a percentage of net revenues and financial income.

This was partially offset by a decrease in product and technology development expenses as a percentage of net revenues and financial income, mainly related to the one-off charge recorded in 2023, because the risk of losing the case became probable in certain disputed amounts regarding withholding income tax contingencies in Brazil.

Other income (expenses), net

Other income (expenses), net consists primarily of interest income derived from our investments and cash equivalents, interest expense and other financial charges related to financial liabilities and foreign currency gains or losses.

Other income (expenses), net consists primarily of interest income derived from our investments and cash equivalents and, interest expense and other financial charges related to financial liabilities not related to Mercado Pago’s operations, and foreign currency gains or losses.

The following table presents Other income (expenses), net for the years indicated:

Year Ended December 31, Change from 2023 to 2024 Year Ended December 31, Change from 2022 to 2023

2023 2022 in Dollars in % 2022 2021 in Dollars in %

2024 2023 (1)

in Dollars in % 2023 (1)

in Dollars in %

(In millions, except percentages) (In millions, except percentages)

Other income (expenses), net $ (199) $ (654) $ 455 (69.6)% $ (654) $ (289) $ (365) 126.3%

As a percentage of net revenues -1.9 % -2.4% -2.4% -2.8%

For the year ended December 31, 2023, the increase in other income (expenses), net as compared to the year ended December 31, 2022 was primarily attributable to a:

i) $417 million increase in our foreign currency loss, mainly due to the acquisition of our own common stock in the Argentine market at a price that reflects the additional cost of accessing U.S.

dollars through an indirect mechanism due to restrictions imposed by the Argentine government for buying U.S.

dollars at the official exchange rate (refer to Note 25 – Share repurchase program of our audited consolidated financial statements for further detail), and higher foreign exchange losses from our Argentinian subsidiaries ($183 million) due to the Argentine peso devaluation during December 2023 and the acquisition of U.S.

dollars in the Argentine market at a price that reflects the additional cost of accessing U.S.

As a percentage of net revenues and financial income

-1.0 % -4.3% -4.3% -2.7%

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

49 | MercadoLibre, Inc.

For the year ended December 31, 2024, the decrease in other income (expense), net as compared to the year ended December 31, 2023 was primarily attributable to lower foreign exchange losses of $334 million due to acquisitions of financial instruments in the Argentine market at a price that reflects an additional cost of accessing U.S.

dollars through an indirect mechanism due to restrictions imposed by the Argentine government for buying U.S.

dollars at the official exchange rate;

and ii) $57 million increase in interest expense and other financial losses mainly attributable to higher rates (mainly in Brazil) and higher levels of indebtedness in 2023 (mainly in Mexico).

This increase was partially offset by a $458 million increase in interest income and other financial gains from our financial investments, primarily as a result of higher interest income due to higher float and rates in Brazil and Argentina.

dollars at the official exchange rate, and due to lower foreign exchange losses from our Argentine subsidiaries.

This was partially offset by higher foreign exchange losses from our Brazilian and Mexican subsidiaries.

We are subject to federal and state income tax in the United States, as well as foreign taxes in the multiple jurisdictions where we operate.

5 unchanged sentences

Year Ended December 31,

2023 2022 2021

(In millions)

8 unchanged sentences

Income tax expense $ 521 $ 569 $ (48) (8.4) % $ 569 $ 298 $ 271 90.9 %

As a percentage of net revenues 3.9 % 2.8% 2.8% 2.1%

45 | MercadoLibre, Inc.

During the year ended December 31, 2023 as compared to the year ended December 31, 2022, income tax expense increased mainly as a result of higher income tax expense in Argentina and Brazil as a consequence of higher pre-tax gains in those segments in 2023.

This increase was partially offset by income tax gains in Mexico as a result of the reversal of the valuation allowance in one of our Mexican subsidiaries during the third quarter of 2023 (please see Note 14 – Income taxes of our audited consolidated financial statements for further information regarding this valuation allowance reversal) and income tax gains in Brazil related to deferred tax assets due to deductible disputed amounts from withholding income tax contingency (please see Note 15 – Commitments and Contingencies of our audited consolidated financial statements for further information regarding this tax contingency).

As a percentage of net revenues and financial income

2.5 % 3.8% 3.8% 2.8%

During the year ended December 31, 2024 as compared to the year ended December 31, 2023, income tax expense decreased mainly as a result of lower taxable income in Argentina during 2024 primarily driven by lower non-deductible expenses.

This decrease was partially offset by i) higher income tax expense in Mexico in 2024 mainly driven by the income tax gains recognized in Mexico during 2023 as a result of the reversal of the valuation allowance in one of our Mexican subsidiaries (please see Note 15 – Income taxes of our audited consolidated financial statements for further information regarding this valuation allowance reversal) and ii) higher income tax expense due to withholding tax on intercompany dividends.

Our effective tax rate is defined as income tax expense as a percentage of net income before income tax expense.

3 unchanged sentences

Effective tax rate 21.4 % 36.6 % 38.2 %

Our effective tax rate for the year ended December 31, 2023 as compared to 2022, decreased largely as a result of the reversal of the valuation allowance in one of our Mexican subsidiaries during the third quarter of 2023 (please see Note 14 – Income taxes of our audited consolidated financial statements for further information regarding this valuation allowances reversal).

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, its functional currency is the U.S.

dollar, and higher non-deductible foreign exchange losses related to the acquisition of our own common stock in the Argentine market (please see Note 25 – Share repurchase program for further information).

The following table sets forth our effective income tax rate related to our main locations for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31,

Effective tax rate by country 2023 2022 2021

Argentina 45.0 % 34.1 % 22.1 %

Brazil 3.9 % (11.6) % 5.9 %

Mexico (12.3) % (27.4) % (7.2) %

The increase in the effective income tax rate in our Argentine segment during the year ended December 31, 2023 as compared to 2022 was mainly related to higher taxable foreign exchange gains accounted for local tax purposes which are not recorded for accounting purposes since, under U.S.

GAAP, Argentine operations’ functional currency is the U.S.

dollar due to the highly inflationary status of the country.

The increase in our Brazilian effective income tax rate for the year ended December 31, 2023 as compared to 2022, was mainly related to a higher pre-tax gains and a higher proportion of pre-tax results arising from entities under the general income tax treatment regime over the Brazilian segment, as compared to the same period in 2022, the combined effect of which resulted in accounting for an income tax expense unlike the same period in 2022 where we recognized an income tax gain.

As a consequence, the effective tax rate of the Brazilian segment resulted in positive 3.9% for the year ended December 31, 2023, as compared to negative 11.6% for 2022.

The decrease in our Mexican negative effective income tax rate for the year ended December 31, 2023 as compared to 2022, was mainly driven by the income tax gains recognized in Mexico during the third quarter of 2023 as a result of the reversal of the valuation allowance in one of our Mexican subsidiaries due to the change in judgment regarding the realizability of the deferred tax assets of the Mexican subsidiary, as positive trends observed in recent periods became enough evidence to support the conclusion along with higher pre-tax gains in 2023 as compared to the same period in 2022.

Please see Note 14 – Income taxes of our audited consolidated financial statements for further information regarding this valuation allowance reversal.

50 | MercadoLibre, Inc.

Our effective tax rate for the year ended December 31, 2024 as compared to 2023, decreased largely as a result of i) no foreign exchange losses recognition during the year related to the acquisition of our own common stock in the Argentine market, which was considered as a non-deductible expense (please see Note 24 – Share repurchase program for further information);

and (ii) lower taxable foreign exchange gains accounted for in Argentina for local tax purposes that are not recorded for accounting purposes since, under U.S.

GAAP, the Argentine operations’ functional currency is the U.S.

dollar due to the highly inflationary status of the country.

This decrease was partially offset by lower reversal of the valuation allowance in the year 2024 as compared to 2023 (please see Note 15 – Income taxes of our audited consolidated financial statements for further information regarding this valuation allowances reversal).

Deferred Income Tax

The following table summarizes the composition of our deferred tax assets as of December 31, 2023 and 2022:

The following table summarizes the composition of our deferred tax assets, before the valuation allowance, as of December 31, 2024 and 2023:

December 31, December 31,

1 unchanged sentence

(In millions, except percentages) (In millions, except percentages)

Brazilian operations $ 386 34.6 % $ 232 30.6 %

Argentine operations 36 3.2 58 7.7

Mexican operations 335 30.0 268 35.4

deferred tax assets 308 27.6 163 21.5

Operations in other countries 50 4.6 37 4.8

$ 472 32.7 % $ 386 34.6 %

56 3.9 36 3.2

314 21.8 335 30.0

545 37.8 308 27.6

Other countries

56 3.8 50 4.6

Total $ 1,443 100.0 % $ 1,115 100.0 %

As of December 31, 2023 and 2022 our deferred tax assets, were comprised mainly of i) allowance for doubtful accounts representing 21.0% and 14.5% of our total deferred tax assets, respectively;

(ii) provisions representing 24.7% and 17.3% of our total deferred tax assets, respectively;

foreign tax credits representing 27.3% and 20.6% of our total deferred tax assets, respectively and (iv) loss carryforwards representing 15.9% and 33.6% of our total deferred tax assets, respectively.

As of December 31, 2024 and 2023 our deferred tax assets, were comprised mainly of i) U.S.

foreign tax credits representing 36.6% and 27.3% of our total deferred tax assets, respectively;

ii) allowance for doubtful accounts representing 25.7% and 21.0% of our total deferred tax assets, respectively;

and (iii) provisions representing 21.4% and 24.7% of our total deferred tax assets, respectively.

The following table summarizes the composition of our deferred tax assets from loss carryforwards as of December 31, 2024 and 2023:

2 unchanged sentences

(In millions, except percentages) (In millions, except percentages)

Mexican operations $ 123 69.5 % $ 161 63.1 %

Brazilian operations 31 17.5 67 26.3

Argentine operations 10 5.6 15 5.9

Operations in other countries 13 7.4 12 4.7

$ 35 54.7 % $ 123 69.5 %

9 14.1 31 17.5

Other countries

16 24.9 13 7.4

Total $ 64 100.0 % $ 177 100.0 %

6 unchanged sentences

(In millions, except percentages) (In millions, except percentages)

deferred tax assets $ 304 81.3 % $ 161 44.7 %

Mexican operations 53 14.2 180 50.0

Argentine operations 7 1.9 6 1.7

Operations in other countries 10 2.6 13 3.6

$ 544 93.2 % $ 304 81.3 %

19 3.3 53 14.2

Other countries

14 2.3 10 2.6

Total $ 584 100.0 % $ 374 100.0 %

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Our valuation allowance is based on our assessment that it is more likely than not that the deferred tax asset will not be realized.

2 unchanged sentences

Our future effective tax rates could be adversely affected by earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where we have higher statutory rates, by changes in the valuations of our deferred tax assets or liabilities, or by changes or interpretations in tax laws, regulations or accounting principles.

47 | MercadoLibre, Inc.

The Organization for Economic Co-operation and Development ("OECD")/G20 Inclusive Framework on Base Erosion and Profit Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalization of the global economy.

The Global Anti-Base Erosion Model Rules (GLoBE Rules or Pillar Two model rules) apply to multinational enterprises with revenue in excess of EUR 750 million per their consolidated financial statements.

While the framework for the GLoBE Rules is global, the rules would be implemented through legislation enacted in jurisdictions that adopt the rules.

The GloBE Rules have not been enacted or substantively enacted in jurisdictions in which we operate.

We continue to monitor the legislation, including the effective date of the legislation by country, transitional safe harbors relief, if any, and other significant requirements.

The GloBE Rules have been passed by legislatures in Spain and Brazil in December 2024 effective for fiscal years starting on or after December 31, 2023 in Spain and effective from January 1, 2025 in Brazil.

Spain is the only jurisdiction where we have incorporated entities that have adopted the GLoBE Rules for the 2024 fiscal year.

According to our estimate there is no tax charge to be accrued in connection with the GloBE Rules for the year ended December 31, 2024.

Segment information

1 unchanged sentence

Year Ended December 31, 2024

Brazil Argentina Mexico Other Countries Total

Brazil Mexico Argentina Other Countries Total

(In millions, except for percentages)

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

Direct costs (5,763) (1,837) (2,371) (595) (10,566)

Net service revenues and financial income $ 10,033 $ 4,183 $ 3,614 $ 808 $ 18,638

Net product revenues 1,373 481 204 81 2,139

Net revenues and financial income 11,406 4,664 3,818 889 20,777

Local operating expenses (8,828) (3,650) (2,069) (730) (15,277)

Depreciation and amortization (292) (160) (74) (42) (568)

Total segment costs (9,120) (3,810) (2,143) (772) (15,845)

Direct contribution $ 2,286 $ 854 $ 1,675 $ 117 $ 4,932

Direct contribution margin

20.0 % 18.3 % 43.9 % 13.2 % 23.7 %

52 | MercadoLibre, Inc.

Year Ended December 31, 2023 (1)

Brazil Argentina Mexico Other Countries Total

Brazil Mexico Argentina Other Countries Total

(In millions, except for percentages)

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

Direct costs (4,717) (1,488) (1,579) (481) (8,265)

Net service revenues and financial income $ 6,946 $ 2,734 $ 3,322 $ 615 $ 13,617

Net product revenues 875 337 228 50 1,490

Net revenues and financial income 7,821 3,071 3,550 665 15,107

Local operating expenses (5,698) (2,238) (1,812) (577) (10,325)

Depreciation and amortization (262) (133) (58) (38) (491)

Total segment costs (5,960) (2,371) (1,870) (615) (10,816)

Direct contribution $ 1,861 $ 700 $ 1,680 $ 50 $ 4,291

Direct contribution margin

23.8 % 22.8 % 47.3 % 7.5 % 28.4 %

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

Change from the Year Ended December 31, 2023 to December 31, 2024

Brazil Argentina Mexico Other Countries Total

(In millions, except for percentages)

in Dollars $ 1,929 $ 740 $ 1,121 $ 146 $ 3,936

Brazil Mexico Argentina Other Countries Total

Net service revenues and financial income

Dollars $ 3,087 $ 1,449 $ 292 $ 193 $ 5,021

in % 44.4% 53.0% 8.8% 31.4% 36.9%

in Dollars $ (1,046) $ (349) $ (792) $ (114) $ (2,301)

Net product revenues

Dollars $ 498 $ 144 $ (24) $ 31 $ 649

in % 56.9% 42.7% (10.5)% 62.0% 43.6%

Net revenues and financial income

Dollars $ 3,585 $ 1,593 $ 268 $ 224 $ 5,670

in % 45.8% 51.9% 7.5% 33.7% 37.5%

Local operating expenses

Dollars $ (3,130) $ (1,412) $ (257) $ (153) $ (4,952)

in % 54.9% 63.1% 14.2% 26.5% 48.0%

Depreciation and amortization

Dollars $ (30) $ (27) $ (16) $ (4) $ (77)

in % 11.5% 20.3% 27.6% 10.5% 15.7%

Total segment costs

Dollars $ (3,160) $ (1,439) $ (273) $ (157) $ (5,029)

in % 53.0% 60.7% 14.6% 25.5% 46.5%

Direct contribution

in Dollars $ 883 $ 391 $ 329 $ 32 $ 1,635

Dollars $ 425 $ 154 $ (5) $ 67 $ 641

in % 22.8% 22.0% (0.3)% 134.0% 14.9%

1 unchanged sentence

Year Ended December 31, 2023 (1)

Brazil Argentina Mexico Other Countries Total

Brazil Mexico Argentina Other Countries Total

(In millions, except for percentages)

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

Direct costs (4,717) (1,488) (1,579) (481) (8,265)

Net service revenues and financial income $ 6,946 $ 2,734 $ 3,322 $ 615 $ 13,617

Net product revenues 875 337 228 50 1,490

Net revenues and financial income 7,821 3,071 3,550 665 15,107

Local operating expenses (5,698) (2,238) (1,812) (577) (10,325)

Depreciation and amortization (262) (133) (58) (38) (491)

Total segment costs (5,960) (2,371) (1,870) (615) (10,816)

Direct contribution $ 1,861 $ 700 $ 1,680 $ 50 $ 4,291

Direct contribution margin

23.8 % 22.8 % 47.3 % 7.5 % 28.4 %

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

Year Ended December 31, 2022 (1)

Brazil Argentina Mexico Other Countries Total

Brazil Mexico Argentina Other Countries Total

(In millions, except for percentages)

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

Direct costs (3,233) (998) (1,139) (380) (5,750)

Net service revenues and financial income $ 5,283 $ 1,638 $ 2,299 $ 465 $ 9,685

Net product revenues 515 255 276 49 1,095

Net revenues and financial income 5,798 1,893 2,575 514 10,780

Local operating expenses (4,692) (1,481) (1,466) (453) (8,092)

Depreciation and amortization (206) (98) (46) (31) (381)

Total segment costs (4,898) (1,579) (1,512) (484) (8,473)

Direct contribution 900 314 1,063 30 2,307

Direct contribution margin 15.5 % 16.6 % 41.3 % 5.8 % 21.4 %

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

54 | MercadoLibre, Inc.

Change from the Year Ended December 31, 2022 to December 31, 2023

Brazil Argentina Mexico Other Countries Total

(In millions, except for percentages)

in Dollars $ 1,756 $ 969 $ 692 $ 51 $ 3,468

Brazil Mexico Argentina Other Countries Total

Net service revenues and financial income

Dollars $ 1,663 $ 1,096 $ 1,023 $ 150 $ 3,932

in % 31.5% 66.9% 44.5% 32.3% 40.6%

in Dollars $ (1,484) $ (490) $ (440) $ (101) $ (2,515)

Net product revenues

Dollars $ 360 $ 82 $ (48) $ 1 $ 395

in % 69.9% 32.2% (17.4)% 2.0% 36.1%

Net revenues and financial income

Dollars $ 2,023 $ 1,178 $ 975 $ 151 $ 4,327

in % 34.9% 62.2% 37.9% 29.4% 40.1%

Local operating expenses

Dollars $ (1,006) $ (757) $ (346) $ (124) $ (2,233)

in % 21.4% 51.1% 23.6% 27.4% 27.6%

Depreciation and amortization

Dollars $ (56) $ (35) $ (12) $ (7) $ (110)

in % 27.2% 35.7% 26.1% 22.6% 28.9%

Total segment costs

Dollars $ (1,062) $ (792) $ (358) $ (131) $ (2,343)

in % 21.7% 50.2% 23.7% 27.1% 27.7%

Direct contribution

in Dollars $ 272 $ 479 $ 252 $ (50) $ 953

Dollars $ 961 $ 386 $ 617 $ 20 $ 1,984

in % 106.8% 122.9% 58.0% 66.7% 86.0%

Net revenues for the years ended December 31, 2023, 2022 and 2021 are described above in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Net revenues”.

For the year ended December 31, 2023, as compared to 2022, the increase in direct costs was mainly driven by a:

i) $989 million increase in cost of net revenues, mainly attributable to an increase in shipping operating and carrier costs, sales taxes, cost of goods sold and collection fees as a consequence of the higher transactions volume of our Mercado Pago business;

and ii) $183 million increase in sales and marketing expenses, mainly due to an increase in online and offline marketing expenses, buyer protection program expenses and salaries and wages (related to headcount increase and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price).

This was partially offset by a decrease of $140 million in provision for doubtful accounts mainly related to our initiatives to maintain portfolio exposure towards lower risk customers, lower risk products and increase exposure to lower risk, allowing us to continue improving our past due loans ratio.

For the year ended December 31, 2023, as compared to 2022, the increase in direct costs was mainly driven by a:

i) $287 million increase in cost of net revenues, mainly attributable to an increase in other payments costs in connection with higher funding cost related to our credits business, collection fees as a consequence of the higher transactions volume of our Mercado Pago business, sales taxes and shipping operating and carrier costs;

and ii) $48 million increase in sales and marketing expenses, mainly due to buyer protection program expenses, chargebacks, salaries and wages (related to headcount increase and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price) and online and offline marketing expenses.

Net revenues and financial income

Net revenues and financial income for the years ended December 31, 2024, 2023 and 2022 are described above in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Net revenues and financial income”.

Segment costs

For the year ended December 31, 2024, as compared to 2023, segment costs increased mainly driven by a:

i) $2,270 million increase in cost of net revenues and financial expenses, mainly attributable to an increase in shipping operating and carrier costs mostly due to an increase in the share of shipping services where we act as principal, as opposed to agent, cost of goods sold as a consequence of an increase in first-party sales, collection fees as a consequence of the higher transactions volume of our Mercado Pago business, sales taxes and hosting and site operation fees;

ii) $588 million increase in provision for doubtful accounts mainly related to our credit card credits business growth;

and iii) $223 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses and buyer protection program expenses.

For the year ended December 31, 2024, as compared to 2023, segment costs increased mainly driven by a:

i) $1,068 million increase in cost of net revenues and financial expenses, mainly attributable to increases in shipping operating and carrier costs mostly due to an increase in the share of shipping services where we act as principal, as opposed to agent, cost of goods sold as a consequence of an increase in first-party sales, collection fees due to higher Mercado Pago penetration, hosting and site operation fees and other payments costs mainly related to higher funding cost related to our lending business;

ii) $219 million increase in provision for doubtful accounts mainly related to our credit card business growth;

and iii) $102 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses, chargebacks and buyer protection program expenses.

For the year ended December 31, 2024, as compared to 2023, segment costs increased mainly driven by a:

i) $182 million increase in cost in net revenues and financial expenses driven by an increase in shipping operating and carrier costs mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent, hosting and site operation fees and collection fees, partially offset by a decrease in other payments costs mainly related to lower funding cost related to our lending business;

and ii) $61 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses and chargebacks.

55 | MercadoLibre, Inc.

For the year ended December 31, 2023, as compared to 2022, the increase in direct costs was mainly driven by a:

i) $522 million increase in cost of net revenues, mainly attributable to increases in shipping operating and carrier costs, collection fees due to higher Mercado Pago penetration, cost of goods sold as a consequence of an increase in first-party sales, other payments costs mainly related to higher funding cost related to our credits business and hosting expenses;

ii) $126 million increase in sales and marketing expenses, mainly due to online and offline marketing expenses, buyer protection program expenses, sales expenses, chargebacks and salaries and wages (related to headcount increase and increases in amounts accrued under the LTRPs as a consequence of the increase in our common stock price);

and iii) $124 million increase in provision for doubtful accounts mainly related to our consumer credits business growth.

Liquidity and Capital Resources

Our main cash requirement has been working capital to fund Mercado Pago financing operations and our credit business.

We also require cash for capital expenditures relating to technology infrastructure, software applications, office space, business acquisitions, to build out our logistics capacity and to make interest payments on our loans payable and other financial liabilities.

Our main cash requirement has been working capital to fund Mercado Pago financing operations and our lending business.

We also require cash for capital expenditures related to technology infrastructure, software applications, office space, business acquisitions, to build out our logistics capacity and to make interest payments on our loans payable and other financial liabilities.

We have funded Mercado Pago mainly by selling credit card receivables and through credit lines.

Additionally, we have financed our Mercado Pago and Mercado Credito businesses through the securitization of credit card receivables and certain loans through SPEs created in Brazil, Mexico and Argentina.

Finally, we obtained funding through our financial institution in Brazil through deposit certificates and financial bills.

Additionally, we have financed our Mercado Pago and lending businesses through the securitization of credit card receivables and certain loans through SPEs created in Brazil, Mexico, Chile and Argentina.

Finally, we obtained funding through our financial institution in Brazil through deposit certificates, financial bills and loans from banks.

Refer to Note 18 – Loans payable and other financial liabilities and Note 21 – Securitization transactions of our audited consolidated financial statements for further detail.

We committed to purchase cloud services for:

i) a total amount of $824 million, to be paid within a 5-year period starting on October 1, 2021 and ii) a total amount of $200 million to be paid within a 3-year period starting on September 23, 2022.

Please refer to Note 15 – Commitments and Contingencies of our audited consolidated financial statements for further detail on purchase commitments.

Further, 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 our 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.

We committed to purchase cloud platform and other technology services for a total minimum aggregate purchase commitment of $3,215 million.

As of December 31, 2024, the remaining purchase commitment is $3,102 million.

On September 27, 2024, we entered into a $400 million amended and restated revolving credit agreement (the “Amended and Restated Credit Agreement”).

The interest rates under the Amended and Restated Credit Agreement are based on Term SOFR (“Secured Overnight Funding Rate”) plus an interest margin of 1.00% per annum, which may be decreased to 0.90% per annum or increased to 1.15% per annum depending on our debt rating, as further provided under the Amended and Restated Credit Agreement.

We are also obligated to pay a commitment fee on the unused amounts of the facility at a rate per annum equal to 25% of the then Applicable Margin, depending on our debt rating, as further provided under the Amended and Restated Credit Agreement.

As of December 31, 2024, no amounts had been borrowed under the facility.

See Note 18 – Loans payable and other financial liabilities of our audited consolidated financial statements for further detail.

On April 8, 2022, we signed a 10-year agreement with Gol Linhas Aereas S.A.

under which we committed to contract a minimum amount of air logistics services for a total annual cost of $43 million (total amount once all the dedicated aircraft are in operation).

Pursuant to the agreement, Gol Linhas Aereas S.A.

will provide logistics services in Brazil to Mercado Envios through six dedicated aircraft, all of which have already started operations as of December 31, 2023.

under which we committed to contract a minimum amount of air logistics services for a total cost of $284 million (portion allocated to the services component of the agreement).

As of December 31, 2024, the remaining purchase commitment is $233 million.

Since October 2023, we signed 3-year agreements with certain shipping companies in Brazil, under which we committed to contract a minimum amount of logistics services for a total cost of $49 million.

On January 10, 2024, we 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.

As of December 31, 2024, the remaining purchase commitment is $39 million.

On January 10, 2024, we 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 $44 million, which has not commenced as of December 31, 2024.

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.

2 unchanged sentences

See Note 22 – Leases of our audited consolidated financial statements for further detail on leases.

Additionally, we have lease agreements for new warehouses in Brazil, Mexico and Argentina for a total amount of $1,451 million that have not yet commenced.

Lease terms under the agreements are between 3 to 15 years.

We have unconditional purchase obligations related to capital expenditures for a total amount of $34 million.

As of December 31, 2024, the remaining purchase commitment is $16 million.

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

4 unchanged sentences

As of December 31, 2024, the obligations outstanding that the Company has confirmed as valid to the financial institutions amounted to $425 million, and are included in the consolidated balance sheets within the accounts payable and accrued expenses line.

In August 2022, we issued commercial notes in Brazil (denominated in Brazilian Real) for $198 million (considering the exchange rate as of the date of issuance), to continue investing in capital expenditures for our shipping business, in order to continue developing our shipping strategy.

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

In November 2021, we closed an equity public offering for an aggregate of 1,000,000 shares of our Common Stock at a public offering price of $1,550 per share.

The aggregate proceeds of the equity offering were $1,520 million net of issuance costs paid.

See Note 22 – Equity Offering of our audited consolidated financial statements for additional information regarding our equity offerings.

50 | MercadoLibre, Inc.

Finally, on March 31, 2022, we entered into a $400 million revolving credit arrangement (“the Credit Arrangement”).

The interest rates under the Credit Arrangement are based on Adjusted Term SOFR plus an interest margin of 1.25% per annum.

Any loans drawn under the Credit Arrangement must be repaid on or prior to March 31, 2025.

We are also obligated to pay a commitment fee on the unused amounts of the facility at an annual rate of 0.3125%.

As of December 31, 2023, no amounts had been borrowed under the facility.

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

As of December 31, 2023, our main source of liquidity was $3,747 million of cash and cash equivalents and short-term investments, which excludes $2,289 million investment mainly related to the Central Bank of Brazil Mandatory Guarantee, and consists of cash generated from operations and proceeds from loans.

As of December 31, 2024, our main source of liquidity was $3,686 million of cash and cash equivalents and short-term investments, which excludes $3,434 million investments mainly related to the Central Bank of Brazil Mandatory Guarantee, and consists of cash generated from operations and proceeds from loans.

As of December 31, 2024, cash and cash equivalents, restricted cash and cash equivalents and investments of our non-U.S.

2 unchanged sentences

dollar-denominated cash and investments are located primarily in Brazil, Mexico and Argentina.

56 | MercadoLibre, Inc.

The following table presents our cash flows from operating activities, investing activities and financing activities for the years ended December 31, 2024, 2023 and 2022:

16 unchanged sentences

Net cash provided by operating activities during the year ended December 31, 2024, resulted primarily from our net income of $1,911 million, adjustments to net income related to non-cash items of $2,587 million, a $3,605 million increase in funds payable to customers, an increase of $1,595 million in payables and accrued expenses and an increase of $1,213 million in amounts payable due to credit and debit card transactions, which were partially offset by a $2,530 million increase in credit card receivables and other means of payments.

The $2,200 million increase in the net cash provided by operating activities in the year ended December 31, 2023, as compared to 2022, is mainly explained by the $505 million increase in net income together with a $776 million increase in payables and accrued expenses, an increase of $565 million in amounts payable due to credit and debit card transactions and $458 million in funds payable to customers.

The $2,778 million increase in the net cash provided by operating activities in the year ended December 31, 2024, as compared to 2023, is mainly explained by the $924 million increase in net income together with a $2,103 million increase in funds payable to customers, an increase of $520 million in amounts payable due to credit and debit card transactions and $370 million in payables and accrued expenses, partially offset by a decrease in credit card receivables and other means of payments, net of $1,209 million.

Net cash used in investing activities

4 unchanged sentences

Investing activities $ (8,287) $ (3,450) $ (4,837) 140.2 %

Net cash used in investing activities in the year ended December 31, 2023 resulted mainly from the use of $2,047 million related to changes on loans receivable due to loans granted to merchants and consumers and Mercado Pago credit card utilization under our Mercado Credito solution net of collections and $509 million in the investment of property and equipment (mainly related to our shipping network and information technology assets in Argentina, Brazil and Mexico).

Net cash used in investing activities in the year ended December 31, 2024 resulted mainly from the use of $4,688 million related to changes on loans receivable due to loans granted to merchants and consumers and Mercado Pago credit card utilization under our lending solution net of collections, $2,748 million related to the net purchases of investments and $860 million in the investment of property and equipment (mainly related to our shipping network and information technology assets in Argentina, Brazil and Mexico) and intangible assets.

The $4,837 million increase in net cash used in investing activities in year ended December 31, 2024, as compared to 2023, is mainly explained by the $2,641 million increase in our loans receivables due to loans granted to merchants and consumers, and Mercado Pago credit card utilization under our lending solution net of collections and the $1,912 million increase in our net purchase of investments.

57 | MercadoLibre, Inc.

Net cash (used in) provided by financing activities

Net cash provided (used in) by financing activities

Year Ended December 31, Change from 2023 to 2024

1 unchanged sentence

(In millions, except percentages)

Net Cash (used in) provided by:

Net Cash provided (used in) by:

Financing activities $ 1,959 $ (267) $ 2,226 833.7 %

For the year ended December 31, 2023, our net cash used in financing activities was primarily derived from the $356 million related to repurchases of our common stock and $33 million for the payments of finance lease liabilities.

For the year ended December 31, 2024, our net cash provided by in financing activities was primarily derived from the $2,011 million related to net loans payables and other financing liabilities.

The $2,226 million increase in net cash provided by (used in) financing activities in year ended December 31, 2024, as compared to 2023, is mainly explained by the $1,889 million increase in net loans payables and other financing liabilities.

In the event that we decide to pursue strategic acquisitions in the future, we may fund them with available cash, third-party debt financing, or by raising equity capital, as market conditions allow.

On August 24, 2018, we issued $800 million of 2.00% Convertible Senior Notes due 2028 and on August 31, 2018 we issued an additional $80 million of notes pursuant to the partial exercise of the initial purchasers’ option to purchase such additional notes, resulting in an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (collectively the “2028 Notes”).

The 2028 Notes were unsecured, unsubordinated obligations, which paid interest in cash semi-annually, on February 15 and August 15, at a rate of 2.00% per annum.

In January 2021, we signed agreements with 2028 Notes holders to repurchase $440 million principal amount of our outstanding 2028 Notes.

The total amount paid amounted to $1,865 million, which includes principal, interest accrued and premium.

On September 19, 2023, we announced our intention to redeem all our 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.

As of November 13, 2023, holders of the 2028 Notes converted $439 million principal amount of 2028 Notes into 1,007,597 shares of our common stock, which we held as treasury stock.

As of December 31, 2023, no principal amount of 2028 Notes remained outstanding.

Please refer to Note 17 – Loans payable and other financial liabilities to our audited consolidated financial statements for additional information regarding the 2028 Notes and the related capped call transactions.

Debt Securities Guaranteed by Subsidiaries

19 unchanged sentences

By virtue of this limitation, a Subsidiary Guarantor’s obligation under its Subsidiary Guarantee could be significantly less than amounts payable with respect to the Notes, or a Subsidiary Guarantor may have effectively no obligation under its Subsidiary Guarantee.

52 | MercadoLibre, Inc.

Under the indenture governing the Notes, the Subsidiary Guarantee of a Subsidiary Guarantor will terminate upon:

4 unchanged sentences

During 2023, we repurchased $9 million and $70 million principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively.

The total amount paid amounted to $66 million.

For the year ended December 31, 2023, we recognized $14 million as a gain in Interest income and other financial gains in our consolidated statement of income.

The total amount paid during 2023 for those repurchases amounted to $66 million.

During 2024, we repurchased $27 million and $81 million in principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively.

The total amount paid during 2024 for those repurchases amounted to $98 million.

See Note 18 – Loans payable and other financial liabilities of our audited consolidated financial statements for additional detail.

58 | MercadoLibre, Inc.

We are presenting the following summarized financial information for the issuer and the Subsidiary Guarantors (together, the “Obligor Group”) pursuant to Rule 13-01 of Regulation S-X, Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.

9 unchanged sentences

Non-current Liabilities 2,449 2,327

(1) Includes restricted cash and cash equivalents of $430 million and $687 million and foreign government debt securities (Central Bank of Brazil mandatory guarantee) of $2,289 million and $1,219 million as of December 31, 2023 and December 31, 2022, respectively.

(2) Includes Current assets from non-guarantor subsidiaries of $1,405 million and $863 million as of December 31, 2023 and December 31, 2022, respectively.

(3) Includes Non-current assets from non-guarantor subsidiaries of $309 million and $410 million as of December 31, 2023 and December 31, 2022, respectively.

(4) Includes Current liabilities to non-guarantor subsidiaries of $1,808 million and $1,334 million as of December 31, 2023 and December 31, 2022, respectively.

53 | MercadoLibre, Inc.

(1) Includes restricted cash and cash equivalents of $940 million and $430 million and foreign government debt securities (Central Bank of Brazil mandatory guarantee) of $3,417 million and $2,289 million as of December 31, 2024 and 2023, respectively.

(2) Includes Current assets from non-guarantor subsidiaries of $2,520 million and $1,405 million as of December 31, 2024 and 2023, respectively.

(3) Includes Non-current assets from non-guarantor subsidiaries of $152 million and $309 million as of December 31, 2024 and 2023, respectively.

(4) Includes Current liabilities to non-guarantor subsidiaries of $2,749 million and $1,808 million as of December 31, 2024 and 2023, respectively.

Summarized statement of income information for the Obligor Group for the year ended December 31, 2024 is provided in the table below:

(In millions)

Net Revenues (1)

Net Revenues and financial income (1)

Gross Profit (2)

1 unchanged sentence

Net income (4)

(1) Includes Net revenues from transactions with non-guarantor subsidiaries of $64 million for the year ended December 31, 2023.

(1) Includes Net revenues and financial income from transactions with non-guarantor subsidiaries of $536 million for the year ended December 31, 2024.

(2) Includes charges from transactions with non-guarantor subsidiaries of $1,408 million for the year ended December 31, 2024.

9 unchanged sentences

We anticipate continued investments in capital expenditures related to information technology and logistics network capacity in the future as we strive to maintain our position in the Latin American e-commerce and fintech market.

We believe that our existing cash and cash equivalents, including the sale of credit card receivables, short-term investments and cash generated from operations, will be sufficient to fund our operating activities, property and equipment expenditures and to pay or repay obligations in the foreseeable future.

59 | MercadoLibre, Inc.

The following table includes eight key performance indicators, which are calculated as defined in the footnotes to the table.

Each of these indicators provide a different measure of the level of activity on our ecosystem, and we use them to monitor the performance of the business.

We continuously address the adequacy of our key performance indicators based on the growth and ever-changing nature of our business.

Each of these indicators provides a different measure of the level of activity on our ecosystem, which we use to monitor the performance of the business.

Year Ended December 31, (1)

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(In millions, except percentages)

Unique Active Users (2)

Fintech monthly active users (2)

Unique active buyers (3)

Gross merchandise volume (4)

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1,787 1,404 1,147

Number of items shipped (5)

1,377 1,105 962

Total payment volume (6)

$ 196,660 $ 146,738 $ 100,585

Total volume of payments on marketplace (7)

Acquiring total payments volume (7)

$ 142,200 $ 115,953 $ 83,675

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Capital expenditures

$ 860 $ 509 $ 455

Depreciation and amortization

$ 617 $ 524 $ 403

(1) Figures have been calculated using rounded amounts.

Growth calculations based on this table may not total due to rounding.

(2) New or existing user who performed at least one of the following actions during the reported period:

(1) made one purchase, or reservation, or asked one question on Mercado Libre Marketplace or Classified Marketplace (2) maintained an active listing on Mercado Libre Marketplace or Classified Marketplace (3) maintained an active account in Mercado Shops (4) made a payment, money transfer, collection and/or advance using Mercado Pago (5) maintained an outstanding credit line through Mercado Credito or (6) maintained a balance of more than $5 invested in a Mercado Fondo asset management account.

Management uses this metric to evaluate the size of our community of users who interact with the ecosystem and of which we have the opportunity to generate further engagement.

With the changes in our businesses we believe it provides a better indication of our active user base rather than our discontinued registration metric that did not reflect any sort of interaction.

As of December 31, 2024, we no longer disclose the key performance indicator "Number of items shipped." Management believes that "Number of items shipped," as a complementary disclosure to "items sold," no longer provides useful information to investors to better understand our business.

Following years of investment, our logistics network now ships 95% of items sold.

As such, the two performance metrics, "Number of items sold" and "Number of items shipped," have converged so we no longer see a benefit for investors in disclosing both.

(2) As of January 1, 2024, we have replaced “Unique Active Users” with “Fintech monthly active users” and “Unique active buyers” as our main indicators of our Fintech and Commerce revenue lines.

Management believes that the significant growth of our Fintech business merits a standalone metric to more precisely measure its footprint and user base growth and to make the best strategic decisions for the development of the Fintech business.

Fintech monthly active users is defined as Fintech payers and/or collectors as of December 31, 2024, that, during the last month of the reporting period, performed at least one of the following actions during such month:

1) made a debit or credit card payment, 2) made a QR code payment, 3) made an off-platform online payment using our checkout or link of payment solutions while logged in to our Mercado Pago fintech platform, 4) made an investment or employed any of our savings solutions, 5) purchased an insurance policy, 6) took out a loan through our lending solution, or 7) received the payment from a sale or transaction either on or off marketplace.

(3) As described above, as of January 1, 2024, unique active buyers is the main performance indicator of our Commerce revenue line.

Management believes that monitoring the Commerce business growth through a standalone metric enables us to better understand user behavior over each period and make strategic decisions to improve the Commerce business.

Unique active buyers is defined as users that have performed at least one purchase on the Mercado Libre Marketplace during the reported period.

(4) Total U.S.

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(5) Number of items that were sold/purchased through the Mercado Libre Marketplace, excluding Classifieds items.

(5) Number of items that were shipped through our shipping service.

(6) Total U.S.

dollar sum of all transactions paid for using Mercado Pago, including marketplace and non-marketplace transactions.

(7) Total U.S.

dollar sum of all marketplace transactions paid for using Mercado Pago.

Management uses this metric to evaluate the performance of our payments services and development of our integrated ecosystem.

As from January 1, 2022, we no longer disclose our total volume of payments on marketplace net of shipping and financing fees.

Given the growth of our shipping and Fintech businesses, Management believes that including shipping and financing fees in the calculation of total volume of payments on marketplace results in a more accurate indicator of that performance on a go-forward basis.

Consequently, total volume of payment on marketplace for the year ended December 31, 2021 has been recast to include shipping and financing fees.

(8) Number of all transactions paid for using Mercado Pago.

(9) Net interest margins after losses (“NIMAL”) represents the annualized ratio between the total credits revenues less funding costs and provision for doubtful accounts for the period and total average gross loans receivable for the period.

Management uses NIMAL to monitor how effectively the Company is pricing and managing the credit products relative to their risk and setting targets.

Accordingly, management is of the opinion that NIMAL provides useful information to investors and others related to the Company’s risk appetite through the different periods and shows how the Company effectively prices risk.

dollar sum of all transactions paid for using Mercado Pago, including marketplace and non-marketplace transactions, excluding peer-to-peer transactions.

As of January 1, 2024, we no longer include peer-to-peer transactions in our TPV in accordance with the metrics and underlying criteria used by our Mercado Pago team, which Management then employs to make strategic decisions.

Consequently, total payment volume for the years ended December 31, 2023 and 2022, have been recast to exclude peer-to-peer transactions.

(7) As of January 1, 2024, we have replaced “Total volume of payment on marketplace” with “Acquiring total payment volume.” Total volume of payment on marketplace was limited to the total U.S.

dollar sum of all marketplace transactions paid for using Mercado Pago, and thus was a relevant and representative metric when the off-platform payment processor business was managed as a payment processor with a digital account.

In light of the significant growth of our Fintech businesses and our payment processing and settling services, Management believes that Acquiring TPV, which also takes into account non-marketplace transactions paid for using Mercado Pago, results in a more representative measure of our physical and online payment processing solutions in any given period.

Acquiring TPV is defined as total U.S.

dollar sum of all transactions settled using our Mercado Pago and Mercado Pago's payment processing and settling services in marketplace and non-marketplace transactions and consist of the following transactions volume:

1) point of sale payment volume, 2) commerce payment volume through our Mercado Libre Marketplace, 3) online payment volume through our checkout or link payment solution for merchants, and 4) QR code payment volume.

(8) Number of all transactions paid for using Mercado Pago, excluding peer-to-peer transactions.

As of January 1, 2024 we no longer include peer-to-peer transactions in our total payment transactions in accordance with the metric and understanding criteria used by our Mercado Pago team, which Management then employs to make strategic decisions.

Consequently, total payment volume for the years ended December 31, 2023 and 2022, have been recast to exclude peer-to-per transactions.

(9) Net interest margins after losses (“NIMAL”) represents the annualized ratio between the total credits revenues (excluding the results of sale of loans receivables) less funding costs and provision for doubtful accounts for the year (excluding the results of sale of loans receivables) and total average gross loans receivable for the year.

Management uses NIMAL to monitor how effective our pricing is and managing the credit products relative to their risk and setting targets.

Accordingly, Management is of the opinion that NIMAL provides useful information to investors and others related to our risk appetite through the different periods and shows how we effectively prices risk.

60 | MercadoLibre, Inc.

Non-GAAP Measures of Financial Performance

To supplement our audited consolidated financial statements presented in accordance with U.S.

GAAP, we present earnings before interest income and other financial gains, interest expense and other financial losses, foreign currency losses, net, income tax expense, depreciation and amortization and equity in earnings of unconsolidated entity (“Adjusted EBITDA”), net debt and foreign exchange (“FX”) neutral measures as non-GAAP measures.

GAAP, we present earnings before interest income and other financial gains, interest expense and other financial losses, foreign currency losses, net, income tax expense, depreciation and amortization and equity in earnings of unconsolidated entity (“Adjusted EBITDA”), net debt, foreign exchange (“FX”) neutral measures and Adjusted free cash flow and Net increase (decrease) in available cash and investments as non-GAAP measures.

Reconciliation of these non-GAAP financial measures to the most comparable U.S.

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We believe that reconciliation of these non-GAAP measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future.

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Adjusted EBITDA

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In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain items.

The following table presents a reconciliation of net income to Adjusted EBITDA for the period indicated:

The following table presents a reconciliation of net income to Adjusted EBITDA for the years indicated:

Years Ended December 31,

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61 | MercadoLibre, Inc.

We define net debt as total debt which includes current and non-current loans payable and other financial liabilities and current and non-current operating lease liabilities, less cash and cash equivalents, short-term investments and long-term investments, excluding foreign government debt securities restricted and held in guarantee, securitization transactions and equity securities held at cost.

We define net debt as total debt which includes current and non-current loans payable and other financial liabilities and current and non-current operating lease liabilities, less cash and cash equivalents, short-term investments and long-term investments, excluding time deposits and foreign government debt securities restricted and held in guarantee, securitization transactions and equity securities held at cost.

We have included this non-GAAP financial measure because it is used by our Management to analyze our current leverage ratios and set targets to be met, which will also impact other components of the Company’s balance sheet, cash flows and income statement.

Accordingly, we believe this measure provides useful information to investors and other market participants in showing the evolution of the Company’s indebtedness and its capability of repayment as a means to, alongside other measures, monitor our leverage based on widely-used measures.

The following table presents a reconciliation of net debt for each of the periods indicated:

The following table presents a reconciliation of net debt for each of the years indicated:

(In millions)

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Net debt $ 2,040 $ 1,505

(1) Excludes foreign government debt securities restricted and held in guarantee.

(2) Excludes investments held in VIEs as a consequence of securitization transactions and equity securities held at cost.

(1) Excludes time deposits and foreign government debt securities restricted and held in guarantee.

(2) Excludes foreign government debt securities restricted, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost.

62 | MercadoLibre, Inc.

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Year Ended December 31,

As reported FX Neutral Measures As reported Percentage Change

As reported As recast (1)

Percentage Change FX Neutral Measures As recast (1)

Percentage Change

(In millions, except percentages)

Net revenues $ 14,473 $ 10,537 37.4 % $ 17,694 $ 10,537 67.9 %

Cost of net revenues (7,267) (5,374) 35.2 % (8,577) (5,374) 59.6 %

2024 2023 2024 2023

(In millions, except percentages) (In millions, except percentages)

Net revenues and financial income $ 20,777 $ 15,107 37.5 % $ 30,443 $ 15,107 101.5 %

Cost of net revenues and financial expenses (11,200) (7,517) 49.0 % (15,273) (7,517) 103.2 %

Gross profit 9,577 7,590 26.2 % 15,170 7,590 99.9 %

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Year Ended December 31,

As reported FX Neutral Measures As reported Percentage Change

As recast (1)

Percentage Change FX Neutral Measures As recast (1)

Percentage Change

(In millions, except percentages)

Net revenues $ 10,537 $ 7,069 49.1 % $ 11,291 $ 7,069 59.7 %

Cost of net revenues (5,374) (4,064) 32.2 % (5,694) (4,064) 40.1 %

2023 2022 2023 2022

(In millions, except percentages) (In millions, except percentages)

Net revenues and financial income $ 15,107 $ 10,780 40.1 % $ 18,675 $ 10,780 73.2 %

Cost of net revenues and financial expenses (7,517) (5,582) 34.7 % (8,859) (5,582) 58.7 %

Gross profit 7,590 5,198 46.0 % 9,816 5,198 88.8 %

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Income from operations $ 2,207 $ 1,069 106.5 % $ 3,116 $ 1,069 191.5 %

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results.

Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior year results - to our audited consolidated financial statements for further details.

See Note 2 – Summary of significant accounting policies – Foreign currency translation – Argentine currency status and macroeconomic outlook and Argentine exchange regulations of our audited consolidated financial statements for further detail on the currency status and the exchange regulations of our Argentine segment.

Adjusted free cash flow and Net increase (decrease) in available cash and investments

Adjusted free cash flow

Adjusted free cash flow represents cash from operating activities less the increase (decrease) in cash and cash equivalents and investments related to customer funds due to regulatory requirements and other restrictions and equity securities held at cost, investments in property and equipment and intangible assets, changes in loans receivable, net and net proceeds from/payments on loans payable and other financial liabilities related to our Fintech solutions, since we consider those liabilities as the working capital of the Fintech activities.

We consider adjusted free cash flow to be a measure of liquidity generation that provides useful information to management and investors since it shows how much cash the Company generates with its core activities that can be used for discretionary purposes and to repay its corporate and/or commerce debt.

A limitation of the utility of adjusted free cash flow as a measure of liquidity generation is that it is a partial representation of the total increase or

63 | MercadoLibre, Inc.

decrease in our available cash and investments balance for the period.

Therefore, we believe it is important to view the adjusted free cash flow measure only as a complement to our entire consolidated statements of cash flows.

Net increase (decrease) in available cash and investments

Net increase (decrease) in available cash and investments represents adjusted free cash flow less net proceeds from/payments on loans payable and other financial liabilities, related to our Commerce and corporate activities, payments of finance lease obligations, other investing and/or financing activities not considered above and the effect of exchange rates changes on available cash and investments.

We consider Net increase (decrease) in available cash and investments to be a measure of liquidity availability that provides useful information to management and investors after netting out all other debt and corporate payments and activities from the adjusted free cash flow.

The following table shows a reconciliation of Net cash provided by operating activities to Adjusted free cash flow and Net increase in available cash and investments:

Year Ended December 31,

2024 2023 2022

(In millions)

Net cash provided by operating activities ("CFO") $ 7,918 $ 5,140 $ 2,940

Adjustments to reconcile CFO to Adjusted free cash flow (1)

Increase in cash and cash equivalents and investments related to customer funds due to regulatory requirements and other restrictions and equity securities held at cost (2,947) (1,499) (1,186)

Investments in property and equipment and intangible assets (860) (509) (455)

Changes in loans receivable, net (4,688) (2,047) (1,701)

Proceeds from loans payable and other financial liabilities related to our Fintech solutions, net 1,706 248 919

Adjusted free cash flow 1,315 1,389 560

Proceeds from/Payments on loans payable and other financial liabilities, related to our Commerce and Corporate activities, net 254 (159) 145

Other investing and/or financing activities 8 (414) (192)

Effect of exchange rate changes on available cash and investments (595) (263) (54)

Net increase in available cash and investments $ 982 $ 553 $ 459

Available cash and investments (2) , at the beginning of the year

$ 3,828 $ 3,275 $ 2,816

Available cash and investments (2) , at the end of the year

$ 4,810 $ 3,828 $ 3,275

Net cash used in investing activities $ (8,287) $ (3,450) $ (3,871)

Net cash provided by (used in) financing activities $ 1,959 $ (267) $ 916

(1) Includes accrued interest and financial income net of interest received from available and restricted investments.

(2) Includes cash and cash equivalents, short-term investments (excluding time deposits and foreign government debt securities restricted and held in guarantee) and long-term investments (excluding foreign government debt securities restricted, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost).

64 | 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 7. Management’s Discussion and Analysis