MERCADOLIBRE INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures Based on the evaluation of our disclosure control and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as required by Rules 13a-15(b) or 15d-15(b) under the Exchange Act, as of the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to Management as appropriate to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Our Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our Management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework updated by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Management’s assessment included evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on its evaluation under the framework in Internal Control—Integrated Framework (2013), our Management concluded that our internal control over financial reporting was effective as of December 31, 2024 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. We reviewed the results of Management’s assessment with the Audit Committee of our board of directors. The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by Pistrelli, Henry Martin y Asociados S.A. (member of Ernst & Young Global Limited), an independent registered public accounting firm, as stated in their report which appears in Item 15(a) of this Annual Report on Form 10-K. 68 | MercadoLibre, Inc. Table of Contents Changes in Internal Control over Financial Reporting There were no changes in our internal controls over financial reporting as defined in Exchange Act Rule 13a-15(f) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent limitations on effectiveness of controls Our Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. ITEM 9B. OTHER INFORMATION Rule 10b5-1 Trading Plans During the three months ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item will be included in our Proxy Statement relating to our 2025 Annual Meeting of Shareholders, and is incorporated herein by reference. The Company has adopted an insider trading policy governing the purchase, sale, and/or other dispositions of its securities by its directors, officers, employees, temporary employees and independent consultants and contractors that the Company believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Company. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item will be included in our Proxy Statement relating to our 2025 Annual Meeting of Shareholders under the captions “Compensation Committee Interlocks and Insider Participation” and “Executive Compensation,” and, except as to information required pursuant to Item 402(v) of SEC Regulation S-K with respect to pay versus performance, is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS Except for the information regarding shares authorized for issuance under equity compensation plans (which is set forth below), the information required by this Item will be included in our Proxy Statement relating to our 2025 Annual Meeting of Shareholders, and is incorporated herein by reference. 69 | MercadoLibre, Inc. Table of Contents The following table presents information as of December 31, 2024 with respect to equity compensation plans under which shares of the Company’s common stock are authorized for issuance: Plan Category Equity Compensation Plan Information Number of securities to be issued upon exercise of outstanding options, Warrants and Rights Weighted-average exercise price of outstanding options, Warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (2) (a) (b) (c) Equity compensation plans approved by security holders (1) — — 989,289 Total — — 989,289 (1) Represents our Amended and Restated 2009 Equity Compensation Plan which was approved by our stockholders on June 10, 2019. (2) Pursuant to SEC guidance, this table does not reflect grants of restricted stock made pursuant to our Amended and Restated 2009 Equity Compensation Plan. As of December 31, 2024, there were 4,179 shares of unvested restricted stock outstanding under such plan. Description of our Amended and Restated 2009 Equity Compensation Plan (the “Amended and Restated 2009 Plan”) Our Amended and Restated 2009 Plan was adopted by our board of directors on April 24, 2019. The Amended and Restated 2009 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, to our employees and non-qualified stock options, restricted stock and other equity-based or equity-related awards to our employees, directors, officers and managers. Incentive stock options and non-qualified stock options are referred to as “stock options” and together with restricted stock and all other awards are referred to as “awards”. As of December 31, 2024, there were no outstanding stock options to purchase shares of common stock under the Amended and Restated 2009 Plan. No stock options were granted during the period from January 1, 2007 to December 31, 2024 and there were no stock-based compensation expenses related to stock options between 2019 and the year ended December 31, 2024. There is no stock option award outstanding under the Amended and Restated 2009 Plan. As of December 31, 2024, there were 989,289 shares of common stock available for additional awards under the Amended and Restated 2009 Plan . Number of shares of common stock available under the Amended and Restated 2009 Plan. The maximum number of shares of common stock reserved and available for delivery in connection with awards under the Amended and Restated 2009 Plan is 1,000,000 shares. Any awards previously granted under the Amended and Restated 2009 Plan that terminate without being exercised, expire, are forfeited or canceled shall be available pursuant to the Amended and Restated 2009 Plan. The shares of common stock issuable pursuant to any award granted under the Amended and Restated 2009 Plan shall be (i) authorized but unissued shares, (ii) shares of common stock held in the Corporation’s treasury, (iii) shares acquired by the Corporation on any stock exchange in which such shares are traded, or (iv) a combination of the foregoing. Administration of the Amended and Restated 2009 Plan. The Amended and Restated 2009 Plan is administered by our board of directors or a committee appointed by the board of directors (the body in charge of administering the Amended and Restated 2009 Plan is referred to as the “administrator”). If the common stock is registered under Section 12(b) or 12(g) of the Exchange Act, the board of directors shall consider in selecting the administrator and the membership of any committee acting as administrator the provisions of Rule 16b-3 under the Exchange Act regarding “non-employee directors.” The administrator determines the recipients of awards, the times at which awards are granted, the number of shares subject to each type of award, the time for vesting of each award and the duration of the exercise period for stock options. The administrator additionally has the power and authority to approve forms of award agreements and other related documents used under the Amended and Restated 2009 Plan. Price, exercise and termination of stock option awards. The exercise price for each share of common stock subject to a stock option is determined by the administrator, and in no event shall the exercise price be less than 100% of the fair market value of the shares of common stock on the date of the grant (or 110% in the case of employees who directly or indirectly own more than 10% of the total combined voting power of all classes of our stock). Stock options are exercisable on their vesting date, which is determined by the administrator and set forth in the award agreement governing any particular stock option. Vesting dates can be accelerated on the occurrence of a specified event, as provided in an award agreement, or can be accelerated at the discretion of the administrator. 70 | MercadoLibre, Inc. Table of Contents If a stock option expires or is terminated or canceled without having been exercised, it shall become null and void and of no further force and effect. The term of a stock option may not exceed beyond the tenth anniversary on which the stock option is granted (or the fifth anniversary in the case of incentive stock options granted to employees who directly or indirectly own 10% of the total combined voting power of all classes of our stock.) A stock option terminates 30 days after a participant ceases to be an officer, manager, employee or director as a result of a termination without cause, and after 10 days of termination in the case of a termination for cause. Cause includes the conviction of a crime involving fraud, theft, dishonesty or moral turpitude, the participant’s continuous disregard of or willful misconduct in carrying lawful instructions of superiors, continued use of alcohol or drugs that interfered with the performance of the participant’s duties, the conviction of participant for committing a felony or similar foreign crime, and any other cause for termination set forth in a participant’s employment agreement. A stock option terminates three months after the death or permanent disability of a participant, or, if the participant is a party to an employment agreement, the disability of such participant as defined in the employment agreement. Other reasons for termination may be set out in the award agreement. A stock option will not be considered an incentive stock option to the extent that the aggregate fair market value (on the date of the grant of the incentive stock option) of all stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year is greater than $100,000. No stock option shall be affected by a change of duties or position of a participant (including a transfer to our subsidiaries) as long as the participant continues to be our employee or an employee of our subsidiaries. Adjustments upon the occurrence of material transactions. In the event we undergo dissolution or liquidation, a reorganization, merger or consolidation in which we are not the surviving entity, or a sale of all or substantially all of our assets (each, a “Material Transaction”), holders of stock options will be given 10-day prior written notice and will decide within those 10 days whether to exercise their respective stock options. Any stock option that is not so exercised will terminate. However, such notice and exercise mechanism would not apply if provision is made in connection with a Material Transaction for assumption of outstanding stock options, or substitution of stock options for new stock options or equity securities, with any appropriate adjustments as to the number, kind and prices of shares subject to stock options. Transferability. Unless the prior written consent of the administrator is obtained, no stock option can be assigned or otherwise transferred by any participant except by will or by the laws of descent and distribution. Except in the case of an approved transfer, a stock option may be exercised during the lifetime of a participant only by the participant or his/her legal representative if the participant is legally disabled. Restricted stock. Restricted stock awards are awards of shares of common stock that vest according to the terms and conditions established by the administrator. The administrator may impose whatever restrictions on transferability, risk of forfeiture and other restrictions as it determines. A holder of restricted stock has the rights of a stockholder, including the right to vote the restricted stock. During the restricted period applicable to the restricted stock, it may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered. Except as otherwise determined by the administrator, restricted stock that is subject to restrictions is subject to forfeiture upon termination of a participant’s employment. Other awards. The administrator of the Amended and Restated 2009 Plan may grant additional equity-based or equity-related awards in such amounts and on such terms as it shall determine, subject to the terms and conditions set forth in the Amended and Restated 2009 Plan. Each such award shall be denominated in, or shall have a value determined by reference to, a number of shares that is specified at the time of the grant of the award. Amendment. Our board of directors may modify the Amended and Restated 2009 Plan at any time. The approval by a majority of our stockholders is necessary if required by law or necessary to comply with any applicable laws and regulations. No amendment will affect the terms of any award granted prior to the effectiveness of such amendment, except with the consent of the holder of the award. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this Item will be included in our Proxy Statement relating to our 2025 Annual Meeting of Shareholders presented under the captions “Certain Relationships and Related Transactions” and “Information on Our board of directors and Corporate Governance,” and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be included in our 2025 Proxy Statement to be filed with the SEC and is incorporated herein by reference. 71 | MercadoLibre, Inc. Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statements. The following financial statements are included in this report: Page Consolidated Financial Statements Reports of Independent Registered Public Accounting Firms 76 Consolidated balance sheets as of December 31, 202 4 and 202 3 79 Consolidated statements of income for the years ended December 31, 202 4 , 202 3 and 202 2 80 Consolidated statements of comprehensive income for the years ended December 31, 202 4 , 202 3 and 202 2 81 Consolidated statements of equity for the years ended December 31, 202 4 , 202 3 and 202 2 82 Consolidated statements of cash flows for the years ended December 31, 202 4 , 202 3 and 202 2 83 Notes to consolidated financial statements 85 (b) Exhibits. The exhibits required by Item 601 of Regulation S-K are set forth under “Exhibit index” and is incorporated herein by reference. ITEM 16. FORM 10-K SUMMARY None. 72 | MercadoLibre, Inc. Table of Contents EXHIBIT INDEX Exhibit Number Exhibit Description Filed (*) or Furnished (**) Herewith Incorporated by Reference Form Filing Date 3.01 Registrant’s Amended and Restated Certificate of Incorporation. S-1 May 11, 2007 3.02 Registrant’s Amended and Restated Bylaws. S-1 May 11, 2007 4.01 Form of Specimen Certificate for the Registrant’s Common Stock. 10-K February 27, 2009 4.02 Indenture, dated January 14, 2021, between MercadoLibre, Inc., MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., MercadoPago.com Representações Ltda., MercadoLibre Chile Ltda., MercadoLibre, S. de R.L. de C.V., DeRemate.com de México, S. de R.L. de C.V. and MercadoLibre Colombia Ltda. and The Bank of New York Mellon, as trustee. 8-K January 14, 2021 4.03 First Supplemental Indenture, dated January 14, 2021, between MercadoLibre, Inc., MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., MercadoPago.com Representações Ltda., MercadoLibre Chile Ltda., MercadoLibre, S. de R.L. de C.V., DeRemate.com de México, S. de R.L. de C.V. and MercadoLibre Colombia Ltda. and The Bank of New York Mellon, as trustee. 8-K January 14, 2021 4.04 Form of Global Note representing the Registrant’s 2.375% Sustainability Notes due 2026. 8-K January 14, 2021 4.05 Form of Global Note representing the Registrant’s 3.125% Notes due 2031. 8-K January 14, 2021 4.06 Description of Securities. 10-K February 23, 2022 4.07 Second Supplemental Indenture, dated October 27, 2021 among MP Agregador, S. de R.L. de C.V., MercadoLibre, Inc. and The Bank of New York Mellon, as Trustee. 10-K February 23, 2022 10.01 Form of Indemnity Agreement entered into by the Registrant with each of its directors and executive officers. 10-K February 14, 2020 10.02 Management Incentive Bonus Plan of the Registrant. S-1/A July 13, 2007 10.03 Amended and Restated 2019 Long-Term Retention Program. 10-Q May 6, 2021 10.04 Amended and Restated 2020 Long-Term Retention Program. 10-Q May 6, 2021 10.05 2021 Long-Term Retention Program. 8-K May 5, 2021 10.06 MercadoLibre, Inc. 2022 Long Term Retention Program. 8-K May 9, 2022 10.07 MercadoLibre, Inc. 2023 Long Term Retention Program. 8-K May 8, 2023 10.08 MercadoLibre, Inc. 2024 Long Term Retention Program. 8-K April 23, 2024 10.09 Amended and Restated 2009 Equity Compensation Plan. DEF 14A April 26, 2019 10.10 Form of Independent Director Restricted Stock Award Agreement. 10-Q November 4, 2022 10.11 Amended and Restated Revolving Credit Agreement, dated September 27, 2024, among MercadoLibre, Inc., as borrower, the lenders party thereto, Citibank, N.A., as administrative agent, and MercadoLibre S.R.L., Ebazar.com.br Ltda., Mercado Pago Instituição de Pagamento Ltda., DeRemate.com de Mexico S. de R.L. de C.V., MP Agregador, S. de R.L. de C.V., MercadoLibre Chile Ltda., and MercadoLibre Colombia Ltda. as initial guarantors. 8-K October 1, 2024 10.12 Restricted Stock Agreement, dated April 8, 2022, between MercadoLibre, Inc and Stelleo Pasos Tolda. 10-Q May 6, 2022 19 Insider Trading Policy. * 21.01 List of Subsidiaries. * 22.01 List of Subsidiary Guarantors for the Registrant’s 2.375% Sustainability Notes due 2026 and 3.125% Notes due 2031. 10-K February 24, 2023 23.01 Consent of Pistrelli, Henry Martin y Asociados S.A., Independent Registered Public Accounting Firm on Form S-8. * 31.01 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * 31.02 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * 32.01 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** 32.02 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** 97 Policy for the Recovery of Erroneously Awarded Compensation. 10-K February 23, 2024 73 | MercadoLibre, Inc. Table of Contents Exhibit Number Exhibit Description Filed (*) or Furnished (**) Herewith Incorporated by Reference Form Filing Date 101 The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. * 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL and contained in Exhibit 101. * 74 | MercadoLibre, Inc. Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MERCADOLIBRE, INC. By: /s/ Marcos Galperin Marcos Galperin President and Chief Executive Officer By: /s/ Martín de los Santos Martín de los Santos Executive Vice President and Chief Financial Officer Date: February 21, 2025 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Marcos Galperin President, Chief Executive Officer (Principal Executive Officer) and Director February 21, 2025 Marcos Galperin /s/ Martín de los Santos Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 21, 2025 Martín de los Santos /s/ Stelleo Tolda Director February 21, 2025 Stelleo Tolda /s/ Susan Segal Director February 21, 2025 Susan Segal /s/ Nicolás Aguzin Director February 21, 2025 Nicolás Aguzin /s/ Nicolás Galperin Director February 21, 2025 Nicolás Galperin /s/ Emiliano Calemzuk Director February 21, 2025 Emiliano Calemzuk /s/ Henrique Dubugras Director February 21, 2025 Henrique Dubugras /s/ Andrea Mayumi Petroni Merhy Director February 21, 2025 Andrea Mayumi Petroni Merhy /s/ Richard Sanders Director February 21, 2025 Richard Sanders 75 | MercadoLibre, Inc. Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of MercadoLibre, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of MercadoLibre, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 2025, expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for doubtful accounts on loans receivable Description of the matter As more fully described in Note 2 to the consolidated financial statements, the Company maintains an allowance for doubtful accounts on loans receivable, based on Management’s estimate of the current expected credit losses (CECL estimate). This allowance as of December 31, 2024 , amounts to 1,708 million U.S. dollars as disclosed in Note 7, which represents a probability-weighted amount, determined by evaluating a range of possible outcomes and reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. The Company’s CECL estimate is determined based on probability-weighed scenarios of default over the life of the loans receivable. Probability of default models are estimated using a complex statistical model, which estimates the future default rate. The Company estimates monthly default probabilities for each delinquency bucket, type of product and country. These probabilities of default are combined with a set of Loss Given Default parameters, which depend on days past due, type of product and country, and are estimated by measuring an average of historical recovery rates from defaulted credits. Auditing the CECL estimate was complex and required the application of significant judgment due to the inherent complexity of the models, assumptions and the interrelationship of the variables used in measuring the CECL estimate that could have a material effect on its measurement. Significant assumptions and judgments with respect to the CECL estimate include definition of default, portfolio segmentation that considers its credit quality and key inputs used for loss given default. 76 | MercadoLibre, Inc. Table of Contents How we addressed the matter in our audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls related to the CECL estimate. The controls we tested included, among others, controls over the development of the model, as well as controls over the key inputs and assumptions used to calculate the CECL estimate. We also tested the controls over the completeness and accuracy of the data used in the calculation. To test the CECL estimate, our audit procedures included, among others, involving our credit risk modelling specialists to assist us in assessing the methodology and significant assumptions used by management, including definition of default, portfolio segmentation and the key inputs identified above that were used for loss given default. We have also performed independent recalculations to test the mathematical accuracy of management’s model and assessed the adequacy of the CECL estimate financial statement disclosures. /s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A. Member of Ernst & Young Global Limited We have served as the Company’s auditor since 2021. City of Buenos Aires, Argentina February 21, 2025 77 | MercadoLibre, Inc. Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of MercadoLibre, Inc. Opinion on Internal Control Over Financial Reporting We have audited MercadoLibre, Inc.'s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, MercadoLibre, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes, and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A. Member of Ernst & Young Global Limited City of Buenos Aires, Argentina February 21, 2025 78 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Consolidated Balance Sheets As of December 31, 2024 and 2023 (In millions of U.S. dollars, except par value) December 31, 2024 2023 (1) Assets Current assets: Cash and cash equivalents $ 2,635 $ 2,556 Restricted cash and cash equivalents 2,064 1,292 Short-term investments 4,485 3,480 Accounts receivable, net 255 156 Credit card receivables and other means of payments, net 5,288 3,632 Loans receivable, net of allowances of $ 1,630 and $ 1,042 (Note 7) 4,716 2,629 Inventories 296 238 Other assets 403 277 Total current assets 20,142 14,260 Non-current assets: Long-term investments 1,203 162 Loans receivable, net of allowances of $ 48 and $ 42 (Note 7) 179 65 Property and equipment, net 1,380 1,250 Operating lease right-of-use assets 1,098 899 Goodwill 149 163 Intangible assets, net 12 11 Intangible assets at fair value 49 24 Deferred tax assets 802 710 Other assets 182 68 Total non-current assets 5,054 3,352 Total assets $ 25,196 $ 17,612 Liabilities Current liabilities: Accounts payable and accrued expenses $ 3,196 $ 2,117 Funds payable to customers 6,954 4,475 Amounts payable due to credit and debit card transactions 1,923 1,072 Salaries and social security payable 727 545 Taxes payable 525 477 Loans payable and other financial liabilities 2,828 2,292 Operating lease liabilities 241 166 Other liabilities 209 119 Total current liabilities 16,603 11,263 Non-current liabilities: Amounts payable due to credit and debit card transactions 41 20 Loans payable and other financial liabilities 2,887 2,203 Operating lease liabilities 894 672 Deferred tax liabilities 204 183 Other liabilities 216 200 Total non-current liabilities 4,242 3,278 Total liabilities $ 20,845 $ 14,541 Commitments and contingencies (Note 16) Equity Common stock, 0.001 par value, $ 110,000,000 shares authorized, $ 50,697,375 and $ 50,697,442 shares issued and outstanding $ — $ — Additional paid-in capital 1,770 1,770 Treasury stock ( 311 ) ( 310 ) Retained earnings 3,812 1,901 Accumulated other comprehensive loss ( 920 ) ( 290 ) Total equity 4,351 3,071 Total liabilities and equity $ 25,196 $ 17,612 (1) Recast for consistency due to the adoption of Staff Accounting Bulletin No. 122. Please refer to Note 2 – Summary of significant accounting policies - Recently Adopted Accounting Standards to our audited consolidated financial statements for further details. The accompanying notes are an integral part of these audited consolidated financial statements. 79 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Consolidated Statements of Income For the years ended December 31, 2024, 2023 and 2022 (In millions of U.S. dollars, except for share data) Year Ended December 31, 2024 2023 (1) 2022 (1) Net service revenues and financial income $ 18,638 $ 13,617 $ 9,685 Net product revenues 2,139 1,490 1,095 Net revenues and financial income 20,777 15,107 10,780 Cost of net revenues and financial expenses ( 11,200 ) ( 7,517 ) ( 5,582 ) Gross profit 9,577 7,590 5,198 Operating expenses: Product and technology development ( 1,934 ) ( 1,831 ) ( 1,099 ) Sales and marketing ( 2,191 ) ( 1,736 ) ( 1,296 ) Provision for doubtful accounts ( 1,858 ) ( 1,050 ) ( 1,073 ) General and administrative ( 963 ) ( 766 ) ( 661 ) Total operating expenses ( 6,946 ) ( 5,383 ) ( 4,129 ) Income from operations 2,631 2,207 1,069 Other income (expenses): Interest income and other financial gains 148 135 44 Interest expense and other financial losses ( 165 ) ( 174 ) ( 135 ) Foreign currency losses, net ( 182 ) ( 615 ) ( 198 ) Net income before income tax expense and equity in earnings of unconsolidated entity 2,432 1,553 780 Income tax expense ( 521 ) ( 569 ) ( 298 ) Equity in earnings of unconsolidated entity — 3 — Net income $ 1,911 $ 987 $ 482 (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. Year Ended December 31, 2024 2023 2022 Basic earning per share Basic net income available to shareholders per common share $ 37.69 $ 19.64 $ 9.57 Weighted average of outstanding common shares 50,697,428 50,262,302 50,345,353 Diluted earning per share Diluted net income available to shareholders per common share $ 37.69 $ 19.46 $ 9.53 Weighted average of outstanding common shares 50,697,428 51,006,860 51,335,621 The accompanying notes are an integral part of these audited consolidated financial statements. 80 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Consolidated Statements of Comprehensive Income For the years ended December 31, 2024, 2023 and 2022 (In millions of U.S. dollars) Year Ended December 31, 2024 2023 2022 Net income $ 1,911 $ 987 $ 482 Other comprehensive (loss) income, net of income tax: Currency translation adjustment ( 640 ) 178 61 Unrealized gains on investments 3 — — Tax expense on unrealized gains on investments ( 1 ) — — Unrealized gains (losses) on hedging activities 15 ( 13 ) ( 33 ) Tax (expense) benefit on unrealized gains (losses) on hedging activities ( 5 ) 2 9 Less: Reclassification adjustment for gains (losses) on hedging activities included in cost of net revenues and financial expenses, interest expense and other financial losses and foreign currency losses, net 3 ( 11 ) ( 20 ) Less: Reclassification adjustment for estimated tax (expense) benefit on unrealized gains (losses) ( 1 ) 4 6 Total other comprehensive (loss) income, net of income tax ( 630 ) 174 51 Total comprehensive income $ 1,281 $ 1,161 $ 533 The accompanying notes are an integral part of these audited consolidated financial statements. 81 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Consolidated Statements of Equity For the years ended December 31, 2024, 2023 and 2022 (In millions of U.S. dollars) Common stock Additional paid-in capital Treasury Stock (1) Retained Earnings Accumulated other comprehensive loss Total Equity Shares Amount Balance as of December 31, 2021 50 $ — $ 2,439 $ ( 790 ) $ 397 $ ( 515 ) $ 1,531 Changes in accounting standards — — ( 131 ) — 34 — ( 97 ) Balance as of December 31, 2021 Restated 50 $ — $ 2,308 $ ( 790 ) $ 431 $ ( 515 ) $ 1,434 Common Stock repurchased — — — ( 147 ) — — ( 147 ) Stock-based compensation — restricted shares issued — — 1 ( 1 ) — — — Shares granted — — — 7 — — 7 Net income — — — — 482 — 482 Other comprehensive Income — — — — — 51 51 Balance as of December 31, 2022 50 $ — $ 2,309 $ ( 931 ) $ 913 $ ( 464 ) $ 1,827 Changes in accounting standards — — — — 1 — 1 Balance as of December 31, 2022 Restated 50 $ — $ 2,309 $ ( 931 ) $ 914 $ ( 464 ) $ 1,828 Capped call settlement — — 412 ( 412 ) — — — Stock-based compensation — restricted shares issued — — 1 — — — 1 Conversion of 2028 Convertible Notes — — ( 952 ) 1,389 — — 437 Common Stock repurchased — — — ( 356 ) — — ( 356 ) Net income — — — — 987 — 987 Other comprehensive Income — — — — — 174 174 Balance as of December 31, 2023 50 $ — $ 1,770 $ ( 310 ) $ 1,901 $ ( 290 ) $ 3,071 Common Stock repurchased — — — ( 1 ) — — ( 1 ) Net income — — — — 1,911 — 1,911 Other comprehensive loss — — — — — ( 630 ) ( 630 ) Balance as of December 31, 2024 50 $ — $ 1,770 $ ( 311 ) $ 3,812 $ ( 920 ) $ 4,351 (1) As of December 31, 2024 the Company he ld 225,474 shares as treasury stock. The accompanying notes are an integral part of these audited consolidated financial statements. 82 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2024, 2023 and 2022 (In millions of U.S. dollars) Year Ended December 31, 2024 2023 2022 Cash flows from operations: Net income $ 1,911 $ 987 $ 482 Adjustments to reconcile net income to net cash provided by operating activities: Equity in earnings of unconsolidated entity — ( 3 ) — Unrealized foreign currency losses, net 286 487 411 Impairment of digital assets — — 12 Depreciation and amortization 617 524 403 Accrued interest and financial income ( 415 ) ( 311 ) ( 166 ) Non cash interest expense and amortization of debt issuance costs and other charges 114 113 122 Provision for doubtful accounts 1,858 1,050 1,073 Provision for contingencies 176 335 16 Results on derivative instruments ( 42 ) 39 66 Results on digital assets at fair value ( 25 ) ( 14 ) — Long term retention program (“LTRP”) accrued compensation 261 167 84 Deferred income taxes ( 243 ) ( 284 ) ( 97 ) Changes in assets and liabilities: Accounts receivable ( 157 ) ( 92 ) ( 71 ) Credit card receivables and other means of payments ( 2,530 ) ( 1,321 ) ( 1,084 ) Inventories ( 113 ) ( 69 ) 114 Other assets ( 308 ) ( 55 ) ( 87 ) Payables and accrued expenses 1,595 1,225 449 Funds payable to customers 3,605 1,502 1,044 Amounts payable due to credit and debit card transactions 1,213 693 128 Other liabilities ( 114 ) ( 88 ) ( 82 ) Interest received from investments 229 255 123 Net cash provided by operating activities 7,918 5,140 2,940 Cash flows from investing activities: Purchases of investments ( 16,710 ) ( 18,936 ) ( 12,694 ) Proceeds from sale and maturity of investments 13,962 18,100 11,023 Payments for acquired businesses, net of cash acquired ( 6 ) — — Receipts from settlements of derivative instruments 29 — 1 Payments from settlements of derivative instruments ( 14 ) ( 58 ) ( 45 ) Changes in loans receivable, net ( 4,688 ) ( 2,047 ) ( 1,701 ) Investments of property and equipment and intangibles assets ( 860 ) ( 509 ) ( 455 ) Net cash used in investing activities ( 8,287 ) ( 3,450 ) ( 3,871 ) Cash flows from financing activities: Proceeds from loans payable and other financial liabilities 19,472 24,963 17,017 Payments on loans payable and other financing liabilities ( 17,461 ) ( 24,841 ) ( 15,933 ) Payments of finance lease liabilities ( 51 ) ( 33 ) ( 20 ) Common Stock repurchased ( 1 ) ( 356 ) ( 148 ) Net cash provided by (used in) financing activities 1,959 ( 267 ) 916 Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents ( 739 ) ( 938 ) ( 270 ) Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents 851 485 ( 285 ) Cash, cash equivalents, restricted cash and cash equivalents, beginning of the year 3,848 3,363 3,648 Cash, cash equivalents, restricted cash and cash equivalents, end of the year $ 4,699 $ 3,848 $ 3,363 The accompanying notes are an integral part of these audited consolidated financial statements. 83 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2024, 2023 and 2022 (In millions of U.S. dollars) Year Ended December 31, 2024 2023 2022 Supplemental cash flow information: Cash paid for interest $ 456 $ 608 $ 247 Cash paid for income tax 1,052 651 437 Non-cash financing activities: Finance lease liabilities $ 52 $ 99 $ 18 Convertible Senior Notes Due 2028 — 437 — Non-cash transactions: Right-of-use assets obtained under operating leases $ 516 $ 314 $ 317 Property and equipment obtained under finance leases 52 99 18 Contingent considerations and escrows from acquired business 4 — — The accompanying notes are an integral part of these audited consolidated financial statements. 84 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 1. NATURE OF BUSINESS MercadoLibre, Inc. (“MercadoLibre”, and together with its consolidated entities, the “Company”) was incorporated in the state of Delaware, in the U.S., in October 1999. MercadoLibre is the largest online commerce and fintech ecosystem in Latin America. The Company’s ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online and processing payments online and offline, as well as offer a wide array of simple day-to-day financial services. The Company enables commerce through its marketplace platform, which allows users to buy and sell in most of Latin America. Through Mercado Pago, the fintech platform, MercadoLibre offers a comprehensive set of financial technology services to users of its e-commerce platform, and to users outside of its e-commerce platform; through Mercado Envios, MercadoLibre facilitates the shipping of goods from the Company and sellers to buyers; through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their products and services on the web; through Mercado Shops, MercadoLibre allows users to set-up, manage, and promote their own online web-stores under a subscription-based business model; through the lending solution, MercadoLibre extends loans to certain merchants and consumers; and through Mercado Fondo, MercadoLibre allows users to invest funds deposited in their Mercado Pago accounts. As of December 31, 2024, MercadoLibre, through its wholly-owned subsidiaries, operated online e-commerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre's fintech platform, Mercado Pago, is present in Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying audited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). Investments in entities where the Company holds joint control, but not control, over the investee are accounted for using the equity method of accounting. As of December 31, 2024, the Company had no investments where it has the ability to exercise joint control. These audited consolidated financial statements are stated in U.S. dollars, except for where otherwise indicated. Intercompany transactions and balances have been eliminated for consolidation purposes. Substantially all net revenues and financial income, cost of net revenues and financial expenses and operating expenses, are generated in the Company’s foreign operatio ns. Long-lived assets, intangible assets and goodwill and operating lease right-of-use assets located in the foreign jurisdictions totaled $ 2,632 million and $ 2,321 million as of December 31, 2024 and 2023, respectively. The presentation of certain prior year figures has been modified to conform to the current year presentation. Also, see below section "Change in the presentation of certain financial results and reclassification of prior years results" for information regarding the change in the presentation of the statements of income and section Recently Adopted Accounting Standards of this note for other changes. Variable Interest Entities (VIEs) A VIE is an entity (i) that has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, (ii) that has equity investors who lack the characteristics of a controlling financial interest or (iii) in which the voting rights of some equity investors are disproportionate to their obligation to absorb losses or their right to receive returns and substantially all of the entity’s activities are conducted on behalf of the equity investors with disproportionately few voting rights. The Company consolidates VIEs of which it is the primary beneficiary. The Company is considered to be the primary beneficiary of a VIE when it has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. See Note 21 – Securitization transactions of these audited consolidated financial statements for additional detail on the VIEs used for securitization purposes. Change in the presentation of certain financial results and reclassification of prior years results Change in the presentation of certain financial results Mercado Pago Fintech platform operations have significantly evolved during the last several years, not only because of the increase in the volume of transactions but also as a result of transitioning from being a non-regulated business to a regulated business, subject to the oversight of central banks and other regulators in the various countries in which the Company operates (refer to Note 3 – Fintech Regulations for further details). Many of the regulations to which the Company is subject require the Company, among other things, to maintain liquidity reserves to guarantee the funds on users’ account balances in their Mercado Pago digital accounts. Depending on the country, these reserves can be partially or totally invested. During the last several years, these new regulations, coupled with the increase in the volume of transactions, have led the Company to view interest income and other financial gains from investments of these liquidity reserves as part of the Company’s operations. 85 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Furthermore, the evolution of Mercado Pago’s activities themselves has resulted in the Company managing a significant volume of cash, cash equivalents and investments. This is due to an increase in users’ account balances in their Mercado Pago digital account managed by the Company, and an increase in the level of the Company’s indebtedness to finance those operations. As a result, these Mercado Pago’s funds, together with the financing activities, have generated a significant volume of interest income and other financial gains and interest expenses and other financial losses, respectively. The Company believes that these regulatory trends and related activities will continue and, therefore, with the goal of creating a better measure of the performance of the Company, the Company decided to reclassify and present certain financial results from “Other income (expenses)” to “Net services revenues and financial income” and “Cost of net revenues and financial expenses,” in the statement of income, starting January 1, 2024 and for all prior periods presented. The reclassified financial results are related to activities that are needed or mandatory for Mercado Pago’s operations, and consist of: ■ interest income derived from investments and cash and cash equivalents, generated as part of the treasury strategy of the fintech business and because of the different regulations that require liquidity reserves, net of sales taxes; ■ interest expense and other financing costs generated by the different sources of funding of the fintech activities; and ■ gains and losses of derivatives hedging risks related to Mercado Pago’s activities. Reclassification of prior years results According to the Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements, the Company should present in a consistent manner all periods presented within the accompanying audited consolidated financial statements. Therefore, prior years balances have been reclassified for consistency with the current presentation. This reclassification did not have an impact on previously reported net income, earnings per share, retained earnings or other components of equity or total equity. The following table, recast for the changes summarized above, presents statement of income line items affected by the revisions and reclassifications of previously reported financial statements, detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements: 86 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 As reported Reclassification Recast As reported Reclassification Recast (In millions) (In millions) Net service revenues and financial income $ 12,983 $ 634 $ 13,617 $ 9,442 $ 243 $ 9,685 Net product revenues 1,490 — 1,490 1,095 — 1,095 Net revenues and financial income 14,473 634 15,107 10,537 243 10,780 Cost of net revenues and financial expenses ( 7,267 ) ( 250 ) ( 7,517 ) ( 5,374 ) ( 208 ) ( 5,582 ) Gross profit 7,206 384 7,590 5,163 35 5,198 Operating expenses: Product and technology development ( 1,831 ) — ( 1,831 ) ( 1,099 ) — ( 1,099 ) Sales and marketing ( 1,736 ) — ( 1,736 ) ( 1,296 ) — ( 1,296 ) Provision for doubtful accounts ( 1,050 ) — ( 1,050 ) ( 1,073 ) — ( 1,073 ) General and administrative ( 766 ) — ( 766 ) ( 661 ) — ( 661 ) Total operating expenses ( 5,383 ) — ( 5,383 ) ( 4,129 ) — ( 4,129 ) Income from operations 1,823 384 2,207 1,034 35 1,069 Other income (expenses): Interest income and other financial gains 723 ( 588 ) 135 265 ( 221 ) 44 Interest expense and other financial losses ( 378 ) 204 ( 174 ) ( 321 ) 186 ( 135 ) Foreign currency losses, net ( 615 ) — ( 615 ) ( 198 ) — ( 198 ) Net income before income tax expense and equity in earnings of unconsolidated entity 1,553 — 1,553 780 — 780 Income tax expense ( 569 ) — ( 569 ) ( 298 ) — ( 298 ) Equity in earnings of unconsolidated entity 3 — 3 — — — Net income $ 987 $ — $ 987 $ 482 $ — $ 482 Furthermore, the following tables, recast for the changes summarized above, present net revenues per reporting segment (which have been disaggregated by similar products and services), detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements for the years ended December 31, 2023 and 2022: 87 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2023 As reported Brazil Mexico Argentina Other countries Total (In millions) Commerce services $ 3,655 $ 1,653 $ 1,036 $ 410 $ 6,754 Commerce products sales 857 326 225 39 1,447 Total commerce revenues 4,512 1,979 1,261 449 8,201 Fintech services 1,910 296 1,292 185 3,683 Credit revenues 1,155 699 684 8 2,546 Fintech products sales 18 11 3 11 43 Total fintech revenues 3,083 1,006 1,979 204 6,272 Total net revenues $ 7,595 $ 2,985 $ 3,240 $ 653 $ 14,473 Year Ended December 31, 2023 Reclassification Brazil Mexico Argentina Other countries Total (In millions) Financial services and income $ 226 $ 86 $ 310 $ 12 $ 634 Total fintech revenues 226 86 310 12 634 Net revenues and financial income $ 226 $ 86 $ 310 $ 12 $ 634 Year Ended December 31, 2023 Recast Brazil Mexico Argentina Other countries Total (In millions) Commerce services $ 3,655 $ 1,653 $ 1,036 $ 410 $ 6,754 Commerce products sales 857 326 225 39 1,447 Total commerce revenues 4,512 1,979 1,261 449 8,201 Financial services and income 2,136 382 1,602 197 4,317 Credit revenues 1,155 699 684 8 2,546 Fintech products sales 18 11 3 11 43 Total fintech revenues 3,309 1,092 2,289 216 6,906 Net revenues and financial income $ 7,821 $ 3,071 $ 3,550 $ 665 $ 15,107 Year Ended December 31, 2022 As reported Brazil Mexico Argentina Other countries Total (In millions) Commerce services $ 2,585 $ 1,036 $ 814 $ 329 $ 4,764 Commerce products sales 487 246 271 40 1,044 Total commerce revenues 3,072 1,282 1,085 369 5,808 Fintech services 1,464 152 904 125 2,645 Credit revenues 1,102 421 506 4 2,033 Fintech products sales 28 9 5 9 51 Total fintech revenues 2,594 582 1,415 138 4,729 Total net revenues $ 5,666 $ 1,864 $ 2,500 $ 507 $ 10,537 88 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2022 Reclassification Brazil Mexico Argentina Other countries Total (In millions) Financial services and income $ 132 $ 29 $ 75 $ 7 $ 243 Total fintech revenues 132 29 75 7 243 Net revenues and financial income $ 132 $ 29 $ 75 $ 7 $ 243 Year Ended December 31, 2022 Recast Brazil Mexico Argentina Other countries Total (In millions) Commerce services $ 2,585 $ 1,036 $ 814 $ 329 $ 4,764 Commerce products sales 487 246 271 40 1,044 Total commerce revenues 3,072 1,282 1,085 369 5,808 Financial services and income 1,596 181 979 132 2,888 Credit revenues 1,102 421 506 4 2,033 Fintech products sales 28 9 5 9 51 Total fintech revenues 2,726 611 1,490 145 4,972 Net revenues and financial income $ 5,798 $ 1,893 $ 2,575 $ 514 $ 10,780 Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, accounting and disclosures for allowance for doubtful accounts and chargeback provisions, inventories valuation reserves, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of cash and cash equivalents, short-term and long-term investments, impairment of long-lived assets, separation of lease and non lease components for aircraft leases, asset retirement obligation, compensation costs relating to the Company’s long term retention program, fair value of certain loans payable and other financial liabilities, fair value of loans receivable, fair value of derivative instruments, income taxes, contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements. Actual results could differ from those estimates. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less since holding the investment, consisting primarily of money market funds, time deposits and U.S. and foreign government debt securities, to be cash equivalents. The Company’s Management assesses balances for credit losses included in cash and cash equivalents and restricted cash and cash equivalents, except for those recorded at fair value with impact on the consolidated statements of income, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models. The Company did not recognize any material credit loss on the cash and cash equivalents and restricted cash and cash equivalents for the years ended December 31, 2024, 2023 and 2022. Time deposits are valued at amortized cost plus accrued interest. Money market funds, U.S. and foreign government debt securities (including Central Bank of Brazil and Central Bank of Uruguay mandatory guarantees) are valued at fair value. See Note 11 – Fair value measurement of assets and liabilities of these audited consolidated financial statements for further details. Investments Time deposits are valued at amortized cost plus accrued interest. Corporate debt securities classified as available-for-sale are recorded at fair value. Unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive loss, net of the related tax provisions or benefits. Investments in equity securities without a readily determinable fair value are held at cost less impairment. 89 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements U.S. and foreign government debt securities (including Central Bank of Brazil and Central Bank of Uruguay mandatory guarantees) are valued at fair value. See Note 11 – Fair value measurement of assets and liabilities of these audited consolidated financial statements for further details. Investments are classified as current or non-current depending on their maturity dates or when it is expected to be converted into cash, depending on the investment. The Company’s Management assesses balances for credit losses included in short and long-term investments, except for those recorded at fair value with impact on the consolidated statements of income, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models. The Company did not recognize any material credit loss on the short and long-term investments for the years ended December 31, 2024, 2023 and 2022. Fair value option applied to certain investments Under ASC 825, U.S. GAAP provides an option to elect fair value with impact on the statement of income as an alternative measurement for certain financial instruments and other items on the balance sheet. The Company has elected to measure certain financial assets at fair value with impact on the consolidated statements of income for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in the consolidated statements of income and consolidated statements of comprehensive income and to better reflect the financial model applied for selected instruments. The Company’s election of the fair value option applies to the: i) Foreign government debt securities, and ii) U.S. government debt securities. Credit card receivables and other means of payments, net Credit card receivables and other means of payments mainly relate to the Company’s payments solution and arise due to the time taken to clear transactions through external payment networks either during the time required to collect the installments (which may be one or more than one installment) or during the period of time until those credit card receivables are sold to financial institutions. Also, the Company has arrangements with some unaffiliated entities under which MercadoLibre users are able to fund their Mercado Pago accounts by depositing an equivalent amount with the unaffiliated entity. In some of these arrangements, MercadoLibre credits the Mercado Pago account before the unaffiliated entity transfers the funds to MercadoLibre to settle the transaction. The amounts pending settlement are recognized in the consolidated balance sheets as credit card receivables and other means of payments. Credit card receivables and other means of payments are presented net of the related allowance for chargebacks and doubtful accounts. The Company is exposed to losses due to credit card fraud and other payment misuse. Provisions for these items represent the Company’s estimate of actual losses based on its historical experience, as well as economic conditions. Loans receivable, net Loans receivable represent credits granted to certain merchants and consumers through the Company’s own lending solution. Merchant and consumers credits are repaid in a period ranging between 7 days and 60 months. Loans receivable are reported at amortized cost, which includes outstanding principal balances plus estimated collectible interest, net of allowance for doubtful accounts. Past due are those loans where customers have failed to make payments in accordance with the contractual terms of their loans. The Company places loans on non-accrual status at 90 days past due, except for credit card loans which are placed on non-accrual status 60 to 65 days past due. Interests related to loans on non-accrual status are recognized on cash-basis. Allowances for doubtful accounts on loans receivable, accounts receivable and credit card receivables and other means of payments The Company maintains allowances for doubtful accounts for Management’s estimate of current expected credit losses (“CECL”) that may result if customers do not make the required payments. Measurement of current expected credit losses The Company estimates its allowance for credit losses as the lifetime expected credit losses of the loans receivable, accounts receivable and credit card receivables and other means of payments. The Company makes use of available information as of each period in which this estimate is developed and uses estimation methods according to the information available and the level of precision needed as certain balances and transactions become more significant over time following the Company’s strategy in connection of the launch and maturing of certain services offerings to its customers. 90 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements CECL estimate required a complex and high degree of Management’s judgment. Information provided a wider series of historical data and the lending business showed a growth in related balances and transactions which led Management to continue enhancing the models used to develop this estimate. CECL represents the present value of the uncollectible portion of the principal, interest, late fees, and other allowable charges. The allowance for doubtful accounts is recorded as a charge to provision for doubtful accounts. Loans receivable Loans receivable in this portfolio include the products that the Company offers to merchant, consumer, credit card and asset-backed users. For loans receivable that share similar risk characteristics such as product type, country, unpaid installments, days delinquent and other relevant factors, the Company estimates the lifetime expected credit loss allowance based on a collective assessment. The same methodology is applied for the measurement of CECL for its exposure to off-balance sheet unused agreed loan commitment on credit cards portfolio. The lifetime expected credit losses is determined by applying probability of default and loss given default models to monthly projected exposures, then discounting these cash flows to present value using the portfolio’s loans interest rate, estimated as a weighted average of the original effective interest rate of all the loans that conform the portfolio segment. The probability of default is an estimation of the likelihood that a loan receivable will default over a given time horizon. For most of the products, probability of default models (“PD”) are estimated using a survival methodology; these PD are constructed using individual default information through time, taking into account the expected future delinquency rate (forward-looking models) using three probability-weighted macroeconomic scenarios (base, optimistic and pessimistic) following the increased complexity and possible outcomes of the global, regional and domestic macroeconomic performance, so that the models include macroeconomic outlook or projections and recent performance. With this model, the Company estimates marginal monthly default probabilities for each delinquency bucket, type of product and country. Each marginal monthly probability of default represents a different possible scenario of default. However, for new products with limited historical information such as asset-backed loans, the Company is using 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. The Company estimates the exposure at default that the portfolio of loans would have in each possible moment of default, meaning for each possible scenario mentioned above. For credit cards loans the Company estimates an amortization scheme based on historical information. Also, for Brazilian credit cards loans the Company uses, as applicable, a one month credit conversion factor (“CCF”) estimated according to terms and conditions, considering the increase in the volume of credit cards portfolio. The loss given default (“LGD”) is the percentage of the exposure at default that is not recoverable. The LGD is estimated using work-out and Chainladder approaches. This percentage depends on days past due, type of product and country, and is estimated by measuring an average of historical recovery rates from defaulted credits. For asset-backed loans, since there is almost no information to apply either a work-out or Chainladder approach, the Company is using a Basel III-based LGD for credit risk management. The measurement of CECL is based on probability-weighted scenarios (probability of default for each month), in view of past events, current conditions and adjustments to reflect the reasonable and supportable forecast of future economic conditions. The Company writes off loans receivable when the customer balance becomes 360 days past due. Accounts receivable To measure the CECL, accounts receivable have been grouped based on shared credit risk characteristics and the number of days past due. The Company has therefore concluded historical loss rates are a reasonable approximation of the expected loss rates for those assets. Accounts receivable are recovered over a period of 0-180 days, therefore, forecasted changes to economic conditions are not expected to have a significant effect on the estimate of the allowance for doubtful accounts. The Company writes off accounts receivable when the customer balance becomes 180 days past due. Credit card receivables and other means of payments Management assesses balances for credit losses included in credit card receivables and other means of payments, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models. 91 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Transfer of financial assets The Company may sell credit card receivables and loans receivable to financial institutions, included within “ Credit card receivables and other means of payments, net ” and “ Loans receivable, net ”. These transactions may qualify to be accounted for as a true sale. Accounting guidance on transfer of financial assets establishes that the transferor has surrendered control over transferred assets if and only if all of the following conditions are met: (1) the transferred assets have been isolated from the transferor, (2) each transferee has the right to pledge or exchange the assets it received and (3) the transferor does not maintain effective control over the transferred assets. When all the conditions are met, the Company derecognizes the corresponding financial asset from its consolidated balance sheets. As of December 31, 2024 and 2023, Accounts payable and accrued expenses include $ 898 million and $ 159 million, respectively, related to the sale of credit card receivables from Mercado Libre S.R.L. (payment aggregator) of payments transactions processed by Mercado Pago Servicios de Procesamiento S.R.L. (payment acquirer) in Argentina. Concentration of credit risk Cash and cash equivalents, restricted cash and cash equivalents, short-term and long-term investments, credit card receivables and other means of payments, accounts receivable and loans receivable are potentially subject to credit risk. However, there are not significant concentrations of credit risk arising from these financial instruments. Cash and cash equivalents, restricted cash and cash equivalents and investments are placed with several financial institutions and financial instruments from different countries that are highly liquid and highly rated. Accounts receivable are derived from revenue earned from customers located internationally and are settled through customer credit cards, debit cards and Mercado Pago accounts, with the majority of accounts receivable collected upon processing of credit card transactions. Due to the relatively small dollar amount of individual accounts receivable and loans receivable, the Company generally does not require collateral on these balances. During the years ended December 31, 2024 and 2023, no single customer accounted for more than 5% of net revenues and financial income. As of December 31, 2024 and 2023, no single customer, except for credit card processing companies, accounted for more than 5% of accounts receivable and loans receivable. Credit card receivables and other means of payments, net line of the consolidated balance sheets shows the Company’s credit exposure to not more than 10 entities in each of the countries where the Company offers its payments solution. Inventories Inventories, consisting of products and mobile point of sale (“MPOS”) devices available for sale, are accounted for using the weighted average price method, and are valued at the lower of cost or net realizable value. The Company accounts for an allowance for recoverability of inventories based on Management’s analysis of the inventories, aging, consumption patterns, as well as the lower of cost or net realizable value. Third-party sellers whose products are stored at the Company’s fulfillment centers, maintain the ownership of their inventories hence these products are not included in Company’s inventories balances. Property and equipment, net Property and equipment are recorded at their acquisition cost and depreciated over their estimated useful lives using the straight-line method. Repair and maintenance costs are expensed as incurred. Costs related to the planning and post implementation phases of website development are recorded as an operating expense. Direct costs incurred in the development phase of website are capitalized and amortized using the straight-line method over an estimated useful life of three years . During 2024 and 2023, the Company capitalized $ 292 million and $ 240 million, respectively. Leases The Company determines if an arrangement is a lease at inception. Leases that grant the Company an option to purchase the underlying asset that the Company is reasonably certain to exercise and leases with a lease term for the major part of the remaining economic life of the underlying asset are classified as finance leases. Right-of-use (“ROU”) assets acquired under finance leases are recorded in “Property and equipment, net.” All other leases are classified as operating leases. Operating leases are included in operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, which is a non-monetary asset, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, which is a monetary liability. Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company uses incremental borrowing rates and internal rate of return for operating and finance leases, respectively, based on the information available at commencement date in determining the present value of lease payments. The lease ROU asset also includes any lease prepaid payments made. In addition, the Company elected to not separate lease components, except for aircraft for which the Company allocates payments to the lease and other services components based on estimated stand-alone prices. The Company also elected to keep leases with an initial term of 12 months or less off of the balance sheet. 92 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that the Company will exercise the option, the Company considers the option in determining the classification and measurement of the lease. The Company’s leases may include variable payments based on measures that include changes in price indices, market interest rates, or the level of sales at a physical store, which are expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Finance lease ROU assets are amortized on a straight-line basis over the lease term, or over the remaining useful life of the underlying asset if the Company is reasonably certain to exercise the purchase option, when applicable. The interest component of a finance lease is included in “Interest expense and other financial losses” within the consolidated statements of income, and recognized using the effective interest method over the lease term. The Company establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are amortized over the lease period into Cost of net revenues and financial expenses and operating expenses, and the recorded liabilities are accreted to the future value of the estimated retirement costs. Goodwill and intangible assets Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Intangible assets consist of customer lists, trademarks, licenses and others, non-solicitation, non-compete agreements and hubs network acquired in business combinations and valued at fair value at the acquisition date. Intangible assets with definite useful life are amortized over the period of estimated benefit to be generated by those assets and using the straight-line method; their estimated useful lives range from three to twelve years . Trademarks with indefinite useful life are not subject to amortization, but are subject to an annual impairment test, by comparing their carrying amount with their corresponding fair value. For any given intangible asset with indefinite useful life, if its fair value exceeds its carrying amount no impairment loss shall be recognized. Intangible assets at fair value The Company accounts for its digital assets as indefinite-lived intangible assets, in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets. The Company has ownership of and control over its digital assets and uses third-party custodial services to store its digital assets. The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at fair value with changes recognized in the consolidated statements of income, within the “General and administrative” line item. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement. Impairment of long-lived assets The Company reviews long-lived assets for impairments whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The impairment evaluation is performed at the lowest level of identifiable cash flows independent of other assets. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by the asset. If such asset is considered to be impaired on this basis, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of such asset. As of December 31, 2024 there were no events or changes in circumstances that indicate that the carrying value of an asset may not be recoverable. Impairment of goodwill and intangible assets with indefinite useful life Goodwill and intangible assets with indefinite useful life are reviewed at the end of the year for impairment or more frequently, if events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level (considering each segment of the Company as a reporting unit) by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of such reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is impaired. As of December 31, 2024, the Company performed its annual goodwill impairment analysis. The Company’s annual impairment analysis included a qualitative assessment to determine if it is necessary to perform the quantitative impairment test. After performing a qualitative impairment test, the Company concluded that it was more likely than not that the fair value of each reporting unit of the Company exceeds its carrying value. Accordingly, there was no indication of impairment and the quantitative impairment test was not performed. No impairment loss has been recognized in the years ended December 31, 2024, 2023 and 2022. Income taxes The Company is subject to U.S. and foreign income taxes. The Company accounts for income taxes following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities. 93 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. In accordance with ASC 740, Management periodically assesses the need to either establish or reverse a valuation allowance for deferred tax assets considering positive and negative objective evidence related to the realization of the deferred tax assets. In its assessment, Management considers, among other factors, the nature, frequency and magnitude of current and cumulative losses on an individual subsidiary basis, projections of future taxable income, the duration of statutory carryforward periods, as well as feasible tax planning strategies, which would be employed by the Company to prevent tax loss carryforwards from expiring unutilized. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to global intangible low-taxed income (“GILTI”) as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). The Company selected the period cost method. Accordingly, the Company was not required to record any impact in connection with the potential GILTI tax as of December 31, 2024 and 2023, respectively. Uncertainty in income taxes The Company recognizes, if any, uncertainty in income taxes by applying the accounting prescribed by U.S. GAAP, for which a more likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return should be considered. It also provides guidance on derecognition, classification of a liability for unrecognized tax benefits, accounting for interest and penalties, accounting in interim periods and expanded income tax disclosures. The Company classifies interest and penalties within income tax expense, in the consolidated statements of income. The Company is subject to taxation in the U.S. and various foreign jurisdictions. The material jurisdictions that are subject to examination by tax authorities primarily include Argentina (for tax year 2018 onwards), the U.S. (for tax year 2021 onwards), Brazil and Mexico (for tax year 2019 onwards). Tax incentives ICMS tax benefits eBazar.com.br Ltda., a Brazilian wholly-owned subsidiary of the Company, has ICMS (Imposto sobre Circulação de Mercadorias, Serviços de Transporte Interestadual, Intermunicipal e Comunicação) tax incentives granted by the State of Minas Gerais in the form of tax credits, through a special regime signed with the State by means of a term of agreement, which are aimed at implementing and expanding business in that State. The Company accounted for the tax benefit netting against cost of net revenues and financial expenses for $ 103 million, $ 69 million and $ 36 million for the years ended December 31, 2024, 2023 and 2022, respectively. Social Contribution on Gross Revenues Meli Developers Brasil Ltda., a Brazilian wholly-owned subsidiary of the Company which provides IT services, has been granted access to the Social Contribution on Gross Revenues (“CPRB” according to its Portuguese acronym) Regime. This regime was extended from December 31, 2023, to December 31, 2024. The CPRB Regime comprised the payment of social security contributions at a 4.5% rate over the gross revenues, as opposed to 20% over the compensation paid to employees. The Company accounted for the tax benefit netting against product and development technology expenses for $ 24 million, $ 24 million and $ 9 million for the years ended December 31, 2024, 2023 and 2022, respectively. Derivative financial instruments The Company’s operations are in various foreign currencies and consequently are exposed to foreign currency risk. Additionally, the funding of its operations through variable rate financial debt makes the Company exposed to interest rate fluctuation risks. As a consequence, the Company uses derivative instruments to reduce the volatility of earnings and cash flows which were designated as hedges. All outstanding derivatives are recognized in the Company’s consolidated balance sheets at fair value. The designated derivative’s gain or loss in a cash flow hedge is initially reported as a component of accumulated other comprehensive loss and is subsequently reclassified into the consolidated statements of income in the financial statement line item in which the variability of the hedged item is recorded in the period the forecasted transaction affects earnings. The designated derivative’s gain or loss in the net investment hedge is reported as a component of accumulated other comprehensive loss. The gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the same period that the interest expense affects earnings. Cash flows associated with the cash flow and net investment hedges are included in cash flows from investing activities on the consolidated statements of cash flows. Additionally, the Company uses swap contracts to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt issued by its non-US subsidiaries. The Company designated the swap contracts as fair value hedges. The derivative’s gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial debt due to the hedged risks. Since the terms of the interest rate swaps match the terms of the hedged debt, changes in the fair value of the interest rate swaps are offset by changes in the fair value of the hedged debt attributable to changes in interest rates. Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debt is recorded at the floating rate. Cash flows associated with the fair value hedges are included in cash flows from investing activities on the consolidated statements of cash flows. 94 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The Company also uses future contracts to hedge the interest rate exposure of its asset-backed loan portfolio originated in Brazil. In these cases, where the assets included in the portfolio share the same risk exposure, the Company designated the future contracts as fair value hedges under the portfolio layer method. The derivative’s gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial assets due to the hedged risks. Accordingly, the Company unlocks its portfolio's fixed rate to mitigate the effect of interest rate fluctuations. Cash flows associated with the fair value hedges are included in cash flows from investing activities on the consolidated statements of cash flows. Finally, the Company also hedges its economic exposure to foreign currency risk related to foreign currency denominated monetary assets and liabilities with foreign derivative currency contracts and interest rate fluctuation with swap contracts which were not designated as hedges. Accordingly, these outstanding non-designated derivatives are recognized in the Company’s consolidated balance sheets at fair value, and changes in fair value from these contracts are recorded in other income (expense), net in the consolidated statements of income. Funds payable to customers Funds payable to customers relate to the Company’s digital account and are originated by the amounts due to users held by the Company. Funds, net of any amount due to the Company by the user, are maintained in the user’s current account until withdrawal is requested by the user. See Note 3 – Fintech Regulations of these audited consolidated financial statements for additional information on regulations over Mercado Pago business. Amounts payable due to credit and debit card transactions Amounts payable due to credit and debit card transactions are originated by purchase transactions carried out by the Company’s customers with debit and credit cards issued by the Company. Provision for buyer protection program The buyer protection program (“BPP”) is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance for all transactions completed through the Company’s online payment solution Mercado Pago (except for certain excluded categories). The Company’s BPP provides protection to consumers by reimbursing them for the total value of a purchased item and the value of any shipping service paid if it does not arrive, arrives incomplete or damaged, does not match the seller’s description or if the buyer regrets the purchase. The Company is entitled to recover from the third-party carrier companies performing the shipping service certain amounts paid under the BPP. Furthermore, in some specific circumstances, the Company enters into insurance contracts with third-party insurance companies in order to cover contingencies that may arise from the BPP. Provisions for BPP represent the Company’s estimate of probable losses based on its historical experience. The charge for the provision for BPP is recognized in sales and marketing expense line of the consolidated statements of income. See Note 16 – Commitments and Contingencies of these audited consolidated financial statements for further details. Share-based payments The liability related to the variable portion of the long term retention programs is remeasured at fair value. See Note 17 – Long term retention program of these audited consolidated financial statements for more details. Meli Dólar liability Meli Dólar is a stablecoin issued by the Company that is pegged to the U.S. dollar. Members of the Company’s loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without any fees. The Company has elected to measure the liability related to the Meli Dólar program, which corresponds to the holding by third-parties of the Company’s stablecoin, at fair value. Treasury stock Equity instruments of the Company that are repurchased by the Company are recognized at cost and deducted from equity. If the repurchase of the Company’s stock is carried out at a price significantly in excess of the current market price, there is a presumption that the repurchase price includes amounts attributable to items other than the stock repurchased; therefore, the Company uses the quoted market price of the common stock for purposes of determining the fair value of the treasury stock. See Note 24 – Share repurchase program of these audited consolidated financial statements for further details. Comprehensive income Comprehensive income is comprised of two components, net income and other comprehensive (loss) income. This last component is defined as all other changes in the equity of the Company that result from transactions other than with shareholders. Other comprehensive (loss) income includes t he cumulative adjustment relating to the translation of the financial statements of the Company’s fo reign subsidiaries, unrealized gains and losses on investments classified as available-for-sale, on hedging activities and the corresponding tax effects. Total comprehensive income for the years ended December 31, 2024, 2023 and 2022 amounted to $ 1,281 million, $ 1,161 million and $ 533 million, respectively. 95 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Foreign currency translation All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Argentina, which has used the U.S. dollar as its functional currency since July 1, 2018. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from their local currencies into U.S. dollars by using year-end exchange rates while income and expense accounts are translated at the average monthly rates in effect during the year, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income. Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. Net foreign currency transaction results are included in the consolidated statements of income under the caption “Foreign currency losses, net”. Argentine currency status and macroeconomic outlook As of July 1, 2018, the Company transitioned its Argentine operations to highly inflationary status in accordance with U.S. GAAP, and changed the functional currency for Argentine subsidiaries from Argentine Pesos to U.S. dollars, which is the functional currency of their immediate parent company. Argentina’s annual inflation rate for the years ended December 31, 2024, 2023 and 2022 was 117.8%, 211.4% and 94.8%, respectively. The Company uses Argentina’s official exchange rate to account for transactions in the Argentine segment, which as of December 31, 2024, 2023 and 2022 was 1,032.00 , 808.45 and 177.16 , respectively, against the U.S. dollar. For the years ended December 31, 2024, 2023 and 2022, Argentina’s official exchange rate against the U.S. dollar increased 27.7%, 356.3% and 72.5%, respectively. The following table sets forth the assets, liabilities and net assets of the Company’s Argentine subsidiaries and consolidated VIEs, before intercompany eliminations, as of December 31, 2024 and December 31, 2023: December 31, 2024 2023 (In millions) Assets $ 5,562 $ 3,298 Liabilities 4,181 1,878 Net assets $ 1,381 $ 1,420 The following table provides information relating to net revenues and financial income and direct contribution (see Note 10 – Segments of these audited consolidated financial statements for definition of direct contribution) for the years ended December 31, 2024, 2023 and 2022 of the Company’s Argentine subsidiaries and consolidated VIEs: Year Ended December 31, 2024 2023 2022 (In millions) Net revenues and financial income $ 3,818 $ 3,550 $ 2,575 Direct contribution 1,675 1,680 1,063 Argentine exchange regulations Since the second half of 2019, the Argentine government instituted exchange controls restricting the ability of companies and individuals to exchange Argentine Pesos for foreign currencies and their ability to remit foreign currency out of Argentina. An entity’s authorization request to the Central Bank of Argentina (“CBA”) to access the official exchange market to make foreign currency payments may be denied depending on the circumstances. As a result of these exchange controls, markets in Argentina developed trading mechanisms, in which an entity or individual buys U.S. dollar denominated securities in Argentina (i.e. shares, sovereign debt) using Argentine Pesos, and subsequently sells the securities for U.S. dollars, in Argentina, to access U.S. dollars locally, or outside Argentina, by transferring the securities abroad, prior to being sold (the latter commonly known as “Blue Chip Swap Rate”). Recently, the Blue Chip Swap Rate has diverged significantly from Argentina’s official exchange rate (commonly known as the exchange spread), being the Blue Chip Swap Rate has been higher than Argentina’s official exchange rate. As of December 31, 2024 and 2023, the spread of the Blue Chip Swap was 14.7 % and 20.4 %, respectively (see Note 24 – Share repurchase program of these audited consolidated financial statements). 96 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements As part of the exchange controls, since 2019, the Argentine government imposes a tax on the acquisition of foreign currency through the official exchange market in certain circumstances. On July 24, 2023, through the Executive Power Decree No. 377/2023, the Argentine government extended the application of this tax to the following cases: (i) certain services acquired from abroad or services rendered by foreign residents in Argentina (i.e. technical, legal, accounting, management, advertising, engineering, audiovisual services, among others), which will be subject to a 25% tax rate, (ii) freight and other transportation services for import and export of goods, which will be subject to a 7.5% tax rate; and (iii) imported goods, which will be subject to a 7.5% tax rate, with certain exemptions (such as fuels and products of the basic food basket). Later, the Decree No. 29/2023, modified the tax rate for the cases mentioned above under ii) and iii) from 7.5% to 17.5%. On September 2, 2024, the Decree No. 777/2024 reestablished the tax rate for cases ii) and iii) mentioned above from 17.5% to 7.5%. Finally, on December 18, 2024, the General Resolution 5,617/2024 confirmed that the maturity of this tax would not be prolonged and, therefore, it ceased to be valid as of December 23, 2024. Revenue recognition Revenues are recognized when control of the promised services or goods is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for them. Contracts with customers may include promises to transfer multiple services including discounts on current or future services. Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. Revenues are recognized when each performance obligation is satisfied by transferring the promised good or service to the customer according to the following criteria described for each type of service: Commerce transactions ■ Revenues from intermediation services derived from final value fees and flat fees paid by sellers. Revenues related to final value fees and flat fees are recognized at the time that the transaction is successfully concluded (which occurs when the marketplace transaction is confirmed right after processing the payment). ■ Revenues from shipping services are generated when a buyer elects to receive an item through the Company’s shipping service and the service is rendered to the customer. When the Company acts as an agent, revenues derived from the shipping services are recognized at the time the transaction is successfully concluded for third-party sales, and presented net of the transportation costs charged by third-party carriers. When the Company acts as principal, revenues derived from the shipping services are recognized upon delivery of the good to the customer, and presented on a gross basis. As part of the Company’s business strategy, shipping costs may be fully or partially subsidized at the Company’s option. In addition, the Company generates storage fees, which are charged to sellers for utilizing the Company’s fulfillment facilities, and are recognized over time. ■ Revenues from inventories sales are generated when control of the good is transferred to the Company’s customers, which occurs upon delivery to the customer. ■ Revenues from advertising services provided to sellers, vendors, brands and others, through different products (Product Ads, Brand Ads, Display Ads and Video Ads) and display formats, are recognized based on the number of clicks and impressions, respectively. ■ Classified advertising services are recorded as revenue ratably during the listing period. Those fees are charged at the time the listing is uploaded onto the Company’s platform and are not subject to successful sale of the items listed. Fintech transactions ■ Revenues from commissions the Company charges for transactions off-platform derived from the use of the Company’s payments solution or Mercado Pago, credit and debit cards, revenues from commissions the Company charges for its asset management product, and revenues derived from insurtech transactions, are recognized once the transaction is considered completed, when the payment is processed by the Company, net of rebates granted. The Company also earns revenues as a result of offering installments to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets to financial institutions. When the Company finances the transactions directly, the financing component is separated from the revenue amount and is recognized over the financing period using the interest method. When the Company sells the corresponding financial assets to financial institutions, the result of such sale is accounted for as financing revenues net of financing costs at the time of transfer of the financial assets. The aggregate gain included in “Financial services and income” revenues arising from financing transactions and sales of financial assets, net of the costs recognized on sale of credit card receivables, is $ 1,767 million, $ 1,440 million and $ 1,054 million, for the years ended December 31, 2024, 2023 and 2022, respectively. ■ Revenues from sale of mobile point of sale products are recognized when control of the good is transferred, which occurs upon delivery to the customer. ■ Revenues from interest earned on loans granted to merchants and consumers, and credit card transactions are recognized over the period of the loan and are based on effective interest rates. The Company places loans on non-accrual status at 90 days past due, except for credit card loans which are placed on non-accrual status 60 to 65 days past due. 97 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements ■ Interest earned on cash and investments as part of Mercado Pago activities, net of interest gains pass through our Brazilian users in connection with our asset management product, are recognized over the period of the investment and are based on effective interest rates or changes in its fair value, depending on the valuation technique of the investment (please refer to sections "Cash and cash equivalents" and "Investments" for further details). When more than one service is included in one single arrangement with the same customer, the Company recognizes revenue according to multiple element arrangements accounting, distinguishing between each of the services provided and allocating revenues based on their respective estimated selling prices. Revenues recognized under ASC 606 “Revenue from contracts with customers” amounted to $ 15,137 million, $ 10,487 million and $ 7,450 million for the years ended December 31, 2024, 2023 and 2022, respectively. Revenues not recognized under ASC 606 amounted to $ 5,640 million, $ 4,620 million and $ 3,330 million for the years ended December 31, 2024, 2023 and 2022, respectively. Contract balances Timing of revenue recognition may differ from the timing of invoicing to customers. Receivables represent amounts invoiced and revenue recognized prior to invoicing when the Company has satisfied the performance obligation and has the unconditional right to payment. Accounts receivable and credit card receivables and other means of payments are presented net of allowance for doubtful accounts and chargebacks of $ 42 million and $ 42 million as of December 31, 2024 and 2023, respectively. See Note 7 – Loans receivable, net of these audited consolidated financial statements for information related to the allowance for doubtful accounts with respect to the Company’s loans receivable. Contract liabilities from contracts with customers consists of fees received related to unsatisfied performance obligations at the end of the year in accordance with ASC 606. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following months. Contract liabilities from contracts with customers as of December 31, 2023 was $ 51 million, of which substantially all was recognized as revenue during the year ended December 31, 2024. As of December 31, 2024, total contract liabilities from contracts with customers recognized within current other liabilities was $ 77 million, mainly due to fees related to classified advertising services billed, subscriptions and loyalty programs, shipping services and inventory sales that are expected to be recognized as revenue in the coming months. Sales tax The Company’s subsidiaries in Brazil, Argentina and Colombia are subject to certain sales taxes which are classified as cost of net revenues and financial expenses and totaled $ 1,367 million, $ 1,165 million and $ 812 million for the years ended December 31, 2024, 2023 and 2022, respectively. Brazilian Tax Reform In December 2023 the Brazilian National Congress approved a tax reform that will change the consumption taxation (goods and services), replacing ICMS (State tax) and ISS (Municipal tax) by IBS (Goods and Services Tax) and PIS/COFINS (Federal taxes) by CBS (Goods and Services Federal Tax). Overall, IBS and CBS will have a single flat rate, around 28% according to current studies, full non-cumulative system (taxpayer full entitlement to recover taxes paid in the previous transactions), and a 7-year transition, starting in 2026. Also, this change will simplify Brazilian tax legislation, which is expected to reduce tax litigation between taxpayers and the government. In this regard, in January 2025, the first part of the regulation for the tax reform on consumption was approved. The text contains rules for the implementation of the CBS and IBS. For the CBS, the transition will be faster, starting in 2026 and ending in 2027. In contrast, the transition for the IBS will occur starting in 2029, with an end date in 2033. Advertising costs The Company expenses the costs of advertisements in the period during which the advertising space or airtime is used as sales and marketing expense. Internet advertising expenses are recognized based on the terms of the individual agreements, which is generally over the greater of the ratio of the number of clicks delivered over the total number of contracted clicks, on a pay-per-click basis, or on a straight-line basis over the term of the contract. Advertising costs for the years ended December 31, 2024, 2023 and 2022 amounted to $ 1,053 million, $ 787 million and $ 593 million, respectively. 98 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Recently Adopted Accounting Standards On November 27, 2023, the FASB issued the Accounting Standard Update (“ASU”) 2023-07 “Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures”. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance should be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted this guidance in the fourth quarter of 2024. Please refer to Note 10 – Segments of these audited consolidated financial statements for additional information. On January 23, 2025, the SEC issued the Staff Accounting Bulletin (“SAB”) No. 122 to rescind the interpretive guidance in SAB No. 121 regarding the accounting for obligations to safeguard crypto-assets that an entity holds for platform users. SAB No. 122 is effective upon publication in the Federal Register and applies to entities on a fully retrospective basis in annual periods beginning after 15 December 2024. The changes can be applied in any earlier interim or annual period included in filings after the effective date. The Company adopted this guidance in the fourth quarter of 2024, removing both the “Customer crypto-assets safeguarding assets” and the “Customer crypto-assets safeguarding liabilities” line items from the consolidated balance sheets, with retrospective application (the amount of the related asset and liability as of December 31, 2023 arose to $ 34 million). This adoption did not have an impact on previously reported net income, earnings per share, retained earnings or other components of equity or total equity. Accounting Pronouncements Not Yet Adopted On December 14, 2023, the FASB issued the ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this update provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information, requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The other amendments in this update improve the effectiveness and comparability of disclosures by adding disclosures of pretax income (or loss) and income tax expense (or benefit) and removing disclosures that no longer are considered cost beneficial or relevant. The amendments are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The guidance should be applied on a prospective basis while retrospective application is permitted. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements. On November 4, 2024, the FASB issued the ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The amendments in this update improve financial reporting by requiring disclosure of additional information about certain costs and expenses in the notes to financial statements at interim and annual reporting, such as the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption; a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027 (as clarified by ASU 2025-01). Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements. NOTE 3. FINTECH REGULATIONS New regulations issued by the Central Banks and other regulators of the countries where the Company operates its Fintech business are described below. Brazil In March 2022, the Central Bank of Brazil announced new rules for payment institutions based on their size and complexity and raised standards for required capital. The new framework, which was effective starting in July 2023 with full implementation by January 2025, will extend the application of the rule regarding proportionality of regulatory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by payment institutions. The new rules require a gradual increase, between 2023 and 2025, in the regulatory capital requirements applicable to the Company’s regulated Brazilian subsidiaries based on the following schedule: from July 2023 onwards, 6.75%, from January 2024 onwards, 8.75% and from January 2025 onwards, 10.50%. On January 2, 2024, article 28 of Law 14,690 came into force, which caps the total amount that may be charged to a credit card holder in the form of interest and financial charges at the value of the original debt. The BACEN also adopted rules in Resolution CMN N° 5,112 that provide guidance and define criteria for calculating the original value of the debt in card revolving and invoice financing operations. To comply with the new regulation, we reduced the duration of the credit card invoice financing plans beginning in January 2024. On June 28, 2024, Law No. 14,905 was enacted, modifying Decree No. 22,626, known as the "Lei da Usura". The law came into force on August 28, 2024, resulting in operations undertaken with institutions authorized by the BACEN, such as Mercado Pago Instituição de Pagamento Ltda., no longer being subject to the previously imposed interest rate cap. 99 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Argentina On May 18, 2023 and May 30, 2023, the CBA enacted new regulations establishing that (i) QR codes must be interoperable with credit card payments, effective as from May 1, 2024; and (ii) digital wallets that allow credit card payments by reading QR codes must be interoperable, effective as from July 29, 2024. These regulations also expanded the payment services providers (“PSP”) registry and established that certain entities that accept, acquire, aggregate or sub-acquire payments must be registered. Under these regulations, MercadoLibre S.R.L. was registered as a Payment Aggregator in the "Registry of Payment Service Providers" of the CBA on June 24, 2024 and as a Payment Accepter in the "Registry of Payment Service Providers" of the CBA on April 10, 2024. Mercado Pago Servicios de Procesamiento S.R.L. was registered as an Acquirer in the "Registry of Payment Service Providers" of the CBA on February 23, 2024. On September 14, 2023, the CBA established that starting on December 1, 2023, DEBIN (debit immediate), the main and simple funding source of Mercado Pago users’ accounts, will be suspended and replaced with a pull transfer method that requires the consent of the client outside of Mercado Pago’s environment before the first use. After several extensions of the application of the rule, on April 30, 2024, the CBA approved a new method of pull transfer that no longer requires the consent of the client outside of Mercado Pago’s environment. On June 6, 2024, the CBA established that PSPOCP are no longer required to distribute the returns generated by their clients' funds. However, financial institutions are still required to set up a reserve of 100% of the customer funds deposited by Mercado Pago and may invest up to 45% of those funds in Argentine bonds. On June 4, 2024, Mercado Pago Inversiones S.R.L. was established. After its registration in the General Inspection of Justice on August 9, 2024, on September 2, 2024, this subsidiary requested a Comprehensive Settlement and Clearing Agent license to the Argentinian National Securities Commission, which was authorized on February 5, 2025. In addition, the subsidiary initiated the registration as a Comprehensive Investment Fund Placement and Distribution Agent (“ACDI”), which is still pending approval. On June 4, 2024, Mercado Pago Asset Management S.A. was established. After its registration in the General Inspection of Justice on August 5, 2024, on September 2, 2024, this subsidiary requested a Product Administration Agent of Collective Investment - Common Investment Funds license and requested the creation of a Money Market Mutual Fund ("Mercado Fondo Ahorro") to the Argentinian National Securities Commission. Both authorizations were granted on February 5, 2025. In addition, this subsidiary requested the replacement of Industrial Asset management S.A. as Management Agent of “Mercado Fondo”, which is still pending approval. As of the date of this filing, Mercado Pago Inversiones S.R.L. and Mercado Pago Asset Management S.A. have not yet begun their operations. Chile On October 12, 2022, the Chilean Congress approved the Fintech and Open-Banking Law Project, which was published on January 4, 2023, and came into effect on February 3, 2023. This law established a regulatory framework for certain technological financial services that did not have their own legal framework. These services are: (i) Alternative Transaction Systems, (ii) Crowdfunding Financing Platforms, (iii) Financial Instrument Intermediation, (iv) Order Routing, (v) Credit Advisory, and (vi) Investment Advisory. Pursuant to this law, in January 2025, Mercado Pago Crypto S.A. submitted the license application to the Chilean Commission for the Financial Market (“CMF”) within the legal deadline for its ruling, which is still pending approval. On April 8, 2024, the Chilean Congress published the Cybersecurity Law. Although Mercado Pago Chilean entities already comply with the law’s main obligations as a result of being regulated entities, pursuant to this new law, such entities will be subject to a new regulator and must comply with certain reporting requirements for cybersecurity incidents. We expect that the Mercado Pago Chilean entities will be required to comply with these new reporting requirements sometime during 2025 or 2026. On May 30, 2024, the Chilean Congress passed Law 21,673, amending Law 20,009, which, effective as of June 1, 2024, establishes a limited liability regime for users of prepaid cards in case of loss, theft, or fraud. Pursuant to Law 21,673, there may be instances in which an issuer may suspend a refund in the event of fraud or serious fault on behalf of the user claiming such refund on account of allegedly fraudulent charges. Mercado Pago Emisora S.A. completed the implementation of these measures for its compliance. Colombia In June 2023, MercadoPago S.A. Compañía de Financiamiento obtained a license issued by Colombian Financial Superintendence to operate as a financial institution in Colombia, enabling it to offer credits, digital accounts, investments and prepaid cards. As a financial company it is subject to minimum capital, reporting, consumer protection and risk management requirements. On April 22, 2024, MercadoPago S.A. Compañía de Financiamiento started operations initially offering only the “Ordinary Deposit” product. In accordance with regulations, customers' funds are now subject to regulatory liquidity, reserve, and solvency requirements to ensure their protection. Uruguay On April 12, 2024, MercadoPago Uruguay S.R.L. initiated a process with the Central Bank of Uruguay (“BCU”) to be authorized to act as a payment acquirer with transfers, as an activity related to electronic money issuances, in compliance with new regulations that came into effect on March 1, 2024. On July 3, 2024, MercadoPago Uruguay S.R.L. received authorization from the BCU to offer payment with transfers acquiring services. 100 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements On April 17, 2024, MercadoPago Uruguay S.R.L. was approved as a participant in the automated clearing house managed by Urutec S.A. This approval allows MercadoPago Uruguay S.R.L. to participate in the fast payment system and offer a new payment method to its users: interoperable QR transfer payments. In September 2024, the BCU announced that they approved the release of the interoperable QR transfer payment feature of the payment system. Peru On November 10, 2022, the Central Reserve Bank of Peru (“BCRP”) enacted regulations related to the card payment processing system that applies to issuers, acquirers and payment facilitators. On January 27, 2023, MercadoPago Perú S.R.L. was registered by the BCRP as a payment facilitator entity, allowing it to (a) affiliate merchants to the card payment system, (b) offer POS, and (c) transmit or process card payment orders and /or participate in the process of settlement to the merchants affiliated. On February 20, 2024, the Register of Entities with Payments by Card agreement form was completed, in accordance with BCRP requirements. NOTE 4. NET INCOME PER SHARE Basic earnings per share for the Company’s common stock is computed by dividing, net income for the period by the weighted average number of common shares outstanding during the year. In August, 2018, the Company issued an aggregate principal amount of $ 880 million of 2.00 % Convertible Senior Notes due 2028 (“2028 Notes”) which were fully converted or redeemed in November 2023. The conversion of these notes was included in the calculation for diluted earnings per share utilizing the “if converted” method for the year ending December 31, 2023 and 2022. The denominator for diluted net income per share for the years ended on December 31, 2023 and 2022 did not include any effect from the capped call transactions entered into by the Company with certain financial institutions with respect to shares of the Company’s common stock (“2028 Notes Capped Call Transactions”), which were settled on September 1, 2023, because it would be antidilutive. Net income per share of common stock is as follows for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Basic Diluted Basic Diluted Basic Diluted Net income per common share (1) $ 37.69 $ 37.69 $ 19.64 $ 19.46 $ 9.57 $ 9.53 Numerator (in millions): Net income $ 1,911 $ 1,911 $ 987 $ 987 $ 482 $ 482 Effect of dilutive 2028 Notes — — — 6 — 7 Net income available to common stock $ 1,911 $ 1,911 $ 987 $ 993 $ 482 $ 489 Denominator: Weighted average of common stock outstanding for earnings per share 50,697,428 50,697,428 50,262,302 50,262,302 50,345,353 50,345,353 Adjustment for assumed conversions — — — 744,558 — 990,268 Adjusted weighted average of common stock outstanding for earnings per share 50,697,428 50,697,428 50,262,302 51,006,860 50,345,353 51,335,621 (1) Figures have been calculated using non-rounded amounts. 101 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 5. CASH, CASH EQUIVALENTS, RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS The composition of cash, cash equivalents, restricted cash and cash equivalents, short-term and long-term investments is as follows: December 31, 2024 2023 (In millions) Cash in bank accounts $ 1,725 $ 1,458 Money market 572 639 Time deposits 334 367 U.S. government debt securities — 60 Foreign government debt securities 4 32 Total cash and cash equivalents 2,635 2,556 Securitization transactions (1) 492 355 Foreign government debt securities (Central Bank of Brazil mandatory guarantee) 469 114 Cash in bank account (Argentine Central Bank regulation) 471 309 Cash in bank account (Mexican National Banking and Securities Commission regulation) 149 91 Time deposits (Mexican National Banking and Securities Commission regulation) 297 314 Cash in bank account (Chilean Commission for the Financial Market regulation) 130 42 Time deposits (Chilean Commission for the Financial Market regulation) 39 54 Money market (Secured lines of credit guarantee) 14 7 Cash in bank account (Central Bank of Uruguay mandatory guarantee) — 1 Time deposits (Central Bank of Uruguay mandatory guarantee) 3 1 Money market (Central Bank of Uruguay mandatory guarantee) — 2 Foreign government debt securities (Central Bank of Uruguay mandatory guarantee) — 2 Total restricted cash and cash equivalents 2,064 1,292 Total cash, cash equivalents, restricted cash and cash equivalents (2) $ 4,699 $ 3,848 U.S. government debt securities $ 619 $ 1,009 Foreign government debt securities (3) 3,619 2,451 Time deposits (4) 160 15 Corporate debt securities (5) 87 5 Total short-term investments $ 4,485 $ 3,480 U.S. government debt securities $ 468 $ — Foreign government debt securities (5) (6) 483 56 Securitization transactions (1) 12 23 Corporate debt securities 175 25 Equity securities held at cost 65 58 Total long-term investments $ 1,203 $ 162 (1) Cash, cash equivalents and investments from securitization transactions are restricted to the payment of amounts due to third-party investors. (2) Cash, cash equivalents, restricted cash and cash equivalents as reported in the consolidated statements of cash flows. (3) As of December 31, 2024 and 2023, includes $ 3,370 million and $ 2,283 million considered restricted due to Central Bank of Brazil mandatory guarantee. Also, as of December 31, 2024 and 2023, includes $ 5 million and $ 6 million, respectively, that guarantees a line of credit and is considered restricted. As of December 31, 2024, includes $ 17 million considered restricted due to the Central Bank of Uruguay’s mandatory guarantee. (4) As of December 31, 2024, includes $ 42 million of collateral as part of credit card scheme arrangement rules in Brazil, and is considered restricted. As of December 31, 2024 and 2023, the time deposits in excess of $ 100 thousand, are in majority foreign deposits. (5) As of December 31, 2024, $ 337 million foreign government debt securities and $ 1 million corporate debt securities are held by a consolidated VIE. (6) As of December 31, 2024, includes $ 2 million considered restricted due to Brazilian stock market mandatory guarantee to operate with futures contracts. 102 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 6. BALANCE SHEET COMPONENTS Accounts receivable, net December 31, 2024 2023 (In millions) Accounts receivable $ 270 $ 177 Allowance for doubtful accounts ( 15 ) ( 21 ) Accounts receivable, net $ 255 $ 156 The following table summarizes the allowance for doubtful accounts activity during the years ended December 31, 2024, 2023 and 2022: Year ended December 31, 2024 2023 2022 (In millions) Balance at beginning of year $ 21 $ 14 $ 8 Net charged to Net income 27 22 9 Charges utilized/ Currency translation adjustments/ Write-offs and other adjustments ( 33 ) ( 15 ) ( 3 ) Balance at end of year $ 15 $ 21 $ 14 Credit card receivables and other means of payments, net December 31, 2024 2023 (In millions) Credit card receivables and other means of payments $ 5,315 $ 3,653 Allowance for chargebacks ( 27 ) ( 17 ) Allowance for doubtful accounts — ( 4 ) Credit card receivables and other means of payments, net $ 5,288 $ 3,632 103 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following tables summarize the allowance for chargebacks and the allowance for doubtful accounts activity during the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Allowance for chargebacks (In millions) Balance at beginning of year $ 17 $ 11 $ 14 Net charged to Net income 25 35 13 Charges utilized/ Currency translation adjustments/ Write-offs and other adjustments ( 15 ) ( 29 ) ( 16 ) Balance at end of year $ 27 $ 17 $ 11 Year Ended December 31, 2024 2023 2022 Allowance for doubtful accounts (In millions) Balance at beginning of year $ 4 $ — $ 17 Net (credited) charged to Net income ( 2 ) 4 ( 2 ) Charges utilized/ Currency translation adjustments/ Write-offs and other adjustments ( 2 ) — ( 15 ) Balance at end of year $ — $ 4 $ — Other assets December 31, 2024 2023 (In millions) VAT credits $ 67 $ 25 Income tax credits 75 26 Sales tax credits 8 54 Advance to ATM providers 12 14 Advance to suppliers 40 46 Derivative instruments 38 1 Incentives to be collected 66 35 Prepaid expenses 46 27 Other 51 49 Current other assets $ 403 $ 277 December 31, 2024 2023 (In millions) Judicial deposits $ 10 $ 8 Sales tax credits 107 2 Derivative instruments 20 22 Other 45 36 Non current other assets $ 182 $ 68 104 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Property and equipment, net Estimated useful life (years) December 31, 2024 2023 (In millions) Equipment 3 - 5 $ 282 $ 248 Land and building 50 (1) 74 83 Furniture and fixtures 3 - 10 992 835 Software 3 755 694 Vehicles 4 166 151 Work in progress 144 62 Subtotal 2,413 2,073 Accumulated depreciation ( 1,033 ) ( 823 ) Property and equipment, net 1,380 1,250 (1) Estimated useful life attributable to “building”. Depreciation Year Ended December 31, 2024 2023 2022 (In millions) Cost of net revenues $ 173 $ 149 $ 101 Product and technology development 271 232 182 Sales and marketing 5 7 5 General and administrative 17 16 21 Depreciation $ 466 $ 404 $ 309 Other liabilities December 31, 2024 2023 (In millions) Contract liabilities from contracts with customers $ 77 $ 51 Contingent considerations and escrows from acquisitions 3 1 Customer advances 29 15 Derivative instruments 17 21 Meli Dólar liability 31 — Other 52 31 Current other liabilities $ 209 $ 119 105 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements December 31, 2024 2023 (In millions) Provisions and contingencies $ 135 $ 124 Contingent considerations and escrows from acquisitions 8 8 Incentives collected in advance 9 9 Derivative instruments 14 10 Other 50 49 Non current other liabilities $ 216 $ 200 Supplier finance programs The Company and certain financial institutions participate in a supplier finance program (“SFP”) that enables certain of the Company’s suppliers, at their own election, to request the payment of their invoices to the financial institutions earlier than the terms stated in the Company’s payment policies. Suppliers’ voluntary inclusion of invoices in the SFP does not change the Company’s payment terms, the amounts paid or liquidity. The supplier invoices that have been confirmed as valid under the program require payment in full according to the terms established in the Company’s payment policies (a range of 60 and 90 days from the invoicing date). There are no assets pledged as security or other forms of guarantees provided for the committed payment to the financial institution. The Company has no economic interest in a supplier’s decision to participate in the SFP and has no financial impact in connection with the SFP. As of December 31, 2024 and 2023, the obligations outstanding that the Company has confirmed as valid to the financial institutions amounted to $ 425 million and $ 381 million, respectively, and are included in the consolidated balance sheets within accounts payable and accrued expenses line. The rollforward of the Company’s outstanding obligations confirmed as valid under its supplier finance program for the year ended December 31, 2024 is as follows: December 31, 2024 (In millions) Confirmed obligations outstanding at the beginning of the year $ 381 Invoices confirmed during the year 2,368 Confirmed invoices paid during the year ( 2,297 ) Currency translation ( 27 ) Confirmed obligations outstanding at the end of the year $ 425 NOTE 7. LOANS RECEIVABLE, NET December 31, 2024 2023 (In millions) Loans receivable $ 6,346 $ 3,671 Allowance for doubtful accounts ( 1,630 ) ( 1,042 ) Current loans receivable, net $ 4,716 $ 2,629 December 31, 2024 2023 (In millions) Loans receivable $ 227 $ 107 Allowance for doubtful accounts ( 48 ) ( 42 ) Non current loans receivable, net $ 179 $ 65 106 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The Company classifies loans receivable as “Merchant”, “Consumer”, “Credit cards” and “Asset-backed”. As of December 31, 2024 and 2023, Loans receivable, net were as follows: December 31, 2024 Loans receivable Allowance for doubtful accounts Loans receivable, net (In millions) Merchant $ 1,205 $ ( 417 ) $ 788 Consumer 2,591 ( 696 ) 1,895 Credit cards 2,639 ( 557 ) 2,082 Asset-backed 138 ( 8 ) 130 Total $ 6,573 $ ( 1,678 ) $ 4,895 December 31, 2023 Loans receivable Allowance for doubtful accounts Loans receivable, net (In millions) Merchant $ 761 $ ( 256 ) $ 505 Consumer 1,789 ( 591 ) 1,198 Credit cards 1,209 ( 236 ) 973 Asset-backed 19 ( 1 ) 18 Total $ 3,778 $ ( 1,084 ) $ 2,694 The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $ 1,708 million and $ 1,102 million as of December 31, 2024 and 2023, respectively, which includes $ 30 million and $ 18 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the consolidated balance sheets as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the Company is exposed to off-balance sheet unused agreed loan commitment on credit cards portfolio which expose the Company to credit risks for $ 2,872 million and $ 934 million, respectively. For the years ended December 31, 2024, 2023 and 2022 the Company recognized in Provision for doubtful accounts $ 18 million, $ 8 million and $ 8 million as expected credit losses, respectively. From time to time, the Company sells loans receivable related to its lending solution. In this regard, during 2024, the Company signed a contract with a third party to sell an amount up to $ 100 million dollar of its loans receivable, as part of its funding strategy. These loans were originated by its Mexican subsidiary and provided to its local users. This transaction is accounted for as a true sale and the Company has a continuing involvement related to a servicing fee charged to the purchaser for collection services and regarding a beneficial interest retained by the Company over the transferred assets. Both involvement events do not preclude the fact that this operation qualifies as a true sale as the purchaser has full control over the transferred assets. As of December 31, 2024, the Company sold $ 44 million of loans receivable and recorded a gain of $ 1 million related to the aforementioned contract. 107 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following tables summarize the allowance for doubtful accounts activity during the years ended December 31, 2024, 2023 and 2022: December 31, 2024 Merchant Consumer Credit cards Asset-backed Total (In millions) Balance at beginning of year $ 256 $ 591 $ 236 $ 1 $ 1,084 Net charged to Net Income 452 759 595 9 1,815 Currency translation adjustments ( 82 ) ( 155 ) ( 98 ) ( 1 ) ( 336 ) Write-offs ( 209 ) ( 499 ) ( 176 ) ( 1 ) ( 885 ) Balance at end of year $ 417 $ 696 $ 557 $ 8 $ 1,678 December 31, 2023 Merchant Consumer Credit cards Asset-backed Total (In millions) Balance at beginning of year $ 265 $ 614 $ 225 $ — $ 1,104 Net charged to Net Income 233 571 211 1 1,016 Currency translation adjustments 9 6 18 — 33 Write-offs ( 251 ) ( 600 ) ( 218 ) — ( 1,069 ) Balance at end of year $ 256 $ 591 $ 236 $ 1 $ 1,084 December 31, 2022 Merchant Consumer Credit cards Total (In millions) Balance at beginning of year $ 155 $ 232 $ 48 $ 435 Net charged to Net Income 248 600 210 1,058 Currency translation adjustments — ( 9 ) ( 1 ) ( 10 ) Write-offs ( 138 ) ( 209 ) ( 32 ) ( 379 ) Balance at end of year $ 265 $ 614 $ 225 $ 1,104 The Company closely monitors credit quality for all loans receivable on a recurring basis to assess and manage its exposure to credit risk. To assess merchants and consumers seeking a loan under the lending solution, the Company uses, among other indicators, risk models internally developed, as a credit quality indicator to help predict the merchant’s and consumer’s ability to repay the principal balance and interest related to the credit. The risk model uses multiple variables as predictors of the merchant’s and consumer’s ability to repay the credit, including external and internal indicators. Internal indicators consider user behavior related to credit/payment history, and with lower weight in the risk models, the Company uses number of transactions in the Company’s ecosystem and merchant’s annual sales volume, among other indicators. In addition, the Company considers external bureau information to enhance the model and the decision making process. 108 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The amortized cost of the loans receivable classified by the Company’s credit quality internal indicator was as follows: December 31, 2024 2023 (In millions) 1-14 days past due $ 125 $ 99 15-30 days past due 146 92 31-60 days past due 175 114 61-90 days past due 167 103 91-120 days past due 178 111 121-150 days past due 155 97 151-180 days past due 138 82 181-210 days past due 129 76 211-240 days past due 118 74 241-270 days past due 121 69 271-300 days past due 109 59 301-330 days past due 112 74 331-360 days past due 90 66 Total past due 1,763 1,116 To become due 4,810 2,662 Total $ 6,573 $ 3,778 As of December 31, 2024 and 2023, renegotiations represented 1.4 % and 2.8 % of the loans receivable portfolio, respectively. As described in Note 2 – Summary of significant accounting policies, the Company places loans on non-accrual status at 90 days past due, except for credit card loans which are placed on non-accrual status 60 to 65 days past due. Interests related to loans on non-accrual status are recognized on cash-basis. There are no loans receivable on non-accrual status for which there is no related allowance for doubtful accounts. 109 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 8. GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets The composition of goodwill and intangible assets is as follows: December 31, 2024 December 31, 2023 (In millions) Goodwill $ 149 $ 163 Intangible assets with indefinite lives Trademarks 4 4 Amortizable intangible assets Licenses and others 18 14 Non-compete agreements 3 4 Customer lists 14 12 Trademarks 7 12 Hubs network 3 4 Others 3 3 Total intangible assets 52 53 Accumulated amortization ( 40 ) ( 42 ) Total intangible assets, net $ 12 $ 11 Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 are as follows: Year Ended December 31, 2024 Brazil Mexico Argentina Chile Colombia Other countries Total (In millions) Balance, beginning of the year $ 64 $ 44 $ 10 $ 37 $ 6 $ 2 $ 163 Business acquisition 6 2 4 — — — 12 Currency translation adjustments ( 14 ) ( 7 ) — ( 4 ) ( 1 ) — ( 26 ) Balance, end of the period $ 56 $ 39 $ 14 $ 33 $ 5 $ 2 $ 149 Year Ended December 31, 2023 Brazil Mexico Argentina Chile Colombia Other countries Total (In millions) Balance, beginning of the year $ 60 $ 39 $ 10 $ 37 $ 5 $ 2 $ 153 Effect of exchange rates changes 4 5 — — 1 — 10 Balance, end of the year $ 64 $ 44 $ 10 $ 37 $ 6 $ 2 $ 163 Intangible assets with definite useful life Intangible assets with definite useful life are comprised of customer lists, non-compete and non-solicitation agreements, hubs network, acquired software licenses and other acquired intangible assets including developed technologies and trademarks. Aggregate amortization expense for intangible assets totale d $ 5 million, $ 6 million and $ 9 million for the years ended December 31, 2024, 2023 and 2022, respectively. 110 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following table summarizes the remaining amortization of intangible assets with definite useful life as of December 31, 2024: For year to be ended December 31, 2025 $ 4 For year to be ended December 31, 2026 2 For year to be ended December 31, 2027 1 Thereafter 1 $ 8 NOTE 9. INTANGIBLE ASSETS AT FAIR VALUE The following table presents the digital assets name, cost basis, fair value, and number of units for each significant digital asset holding as of December 31, 2024 and 2023: Digital asset name December 31, 2024 Cost basis (1) Fair value Number of units held (In millions, except for number of units held) Bitcoin $ 6 $ 39 $ 412.7 Ether $ 3 $ 10 $ 3,049.8 Digital asset name December 31, 2023 Cost basis (1) Fair value Number of units held (In millions, except for number of units held) Bitcoin $ 6 $ 17 $ 412.7 Ether $ 3 $ 7 $ 3,041.6 (1) Cost basis of the digital assets is net of $ 21 million of impairment losses recognized prior to the adoption of ASU 2023-08. The following table summarizes the digital assets rollforward activity during the years ended December 31, 2024 and 2023: December 31, 2024 December 31, 2023 (in millions) Balance at beginning of year $ 24 $ 9 Adoption of ASU 2023-08 — 1 Gains included in net income 25 14 Balance at end of year $ 49 $ 24 The method used by the Company for determining the cost basis of its digital assets was the weighted average price method. NOTE 10. SEGMENTS The Company manages the business country-by-country to understand and focus on the specific needs and opportunities in those markets. The Company’s chief executive officer is responsible for allocating resources and assessing performance and is therefore its chief operating decision maker (“CODM”). The Company’s segments include Brazil, Argentina, Mexico and other countries (which includes Chile, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.). The CODM makes decisions considering all business lines within a country as whole and taking into account the synergies between the different lines in each of the countries’ integrated digital ecosystems. The CODM evaluates the performance of the Company’s operating segments based on their Direct Contribution. 111 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Direct contribution consists of net revenues and financial income from external customers less segment costs, which include expenses, such as shipping operation costs (including warehousing costs), carrier and other operating costs, provision for doubtful accounts, cost of goods sold, collection fees, funding cost, salaries and wages, marketing expenses and hosting expenses. All corporate related costs have been excluded from the segment’s direct contribution. The following tables summarize the financial performance of the Company’s reporting segments: Year Ended December 31, 2024 Brazil Mexico Argentina Other Countries Total (In millions) 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 Operating expenses and indirect costs of net revenues and financial expenses ( 2,301 ) Income from operations 2,631 Other income (expenses): Interest income and other financial gains 148 Interest expense and other financial losses ( 165 ) Foreign currency losses, net ( 182 ) Net income before income tax expense $ 2,432 112 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2023 (1) Brazil Mexico Argentina Other Countries Total (In millions) 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 Operating expenses and indirect costs of net revenues and financial expenses ( 2,084 ) Income from operations 2,207 Other income (expenses): Interest income and other financial gains 135 Interest expense and other financial losses ( 174 ) Foreign currency losses, net ( 615 ) Net income before income tax expense and equity in earnings of unconsolidated entity $ 1,553 (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. Year Ended December 31, 2022 (1) Brazil Mexico Argentina Other Countries Total (In millions) 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 Operating expenses and indirect costs of net revenues and financial expenses ( 1,238 ) Income from operations 1,069 Other income (expenses): Interest income and other financial gains 44 Interest expense and other financial losses ( 135 ) Foreign currency losses, net ( 198 ) Net income before income tax expense $ 780 (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. 113 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following tables summarize net revenues and financial income per reporting segment, which have been disaggregated by similar products and services for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 Brazil Mexico Argentina Other Countries (7) Total (In millions) Commerce services (1) $ 5,695 $ 2,608 $ 1,207 $ 566 $ 10,076 Commerce products sales (2) 1,343 464 200 76 2,083 Total commerce revenues 7,038 3,072 1,407 642 12,159 Financial services and income (3) 2,416 566 1,748 232 4,962 Credit revenues (4) 1,922 1,009 659 10 3,600 Fintech products sales (5) 30 17 4 5 56 Total fintech revenues 4,368 1,592 2,411 247 8,618 Total net revenues and financial income $ 11,406 $ 4,664 $ 3,818 $ 889 $ 20,777 Year Ended December 31, 2023 (6) Brazil Mexico Argentina Other Countries (7) Total (In millions) Commerce services (1) $ 3,655 $ 1,653 $ 1,036 $ 410 $ 6,754 Commerce products sales (2) 857 326 225 39 1,447 Total commerce revenues 4,512 1,979 1,261 449 8,201 Financial services and income (3) 2,136 382 1,602 197 4,317 Credit revenues (4) 1,155 699 684 8 2,546 Fintech products sales (5) 18 11 3 11 43 Total fintech revenues 3,309 1,092 2,289 216 6,906 Total net revenues and financial income $ 7,821 $ 3,071 $ 3,550 $ 665 $ 15,107 114 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2022 (6) Brazil Mexico Argentina Other Countries (7) Total (In millions) Commerce services (1) $ 2,585 $ 1,036 $ 814 $ 329 $ 4,764 Commerce products sales (2) 487 246 271 40 1,044 Total commerce revenues 3,072 1,282 1,085 369 5,808 Financial services and income (3) 1,596 181 979 132 2,888 Credit revenues (4) 1,102 421 506 4 2,033 Fintech products sales (5) 28 9 5 9 51 Total fintech revenues 2,726 611 1,490 145 4,972 Total net revenues and financial income $ 5,798 $ 1,893 $ 2,575 $ 514 $ 10,780 (1) Includes final value fees and flat fees paid by sellers derived from intermediation services and related shipping and storage fees, classified fees derived from classified advertising services and ad sales. (2) Includes revenues from inventory sales and related shipping fees. (3) Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution and asset management product, revenues as a result of offering installments for the payment to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets, interest earned on cash and investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains pass through our Brazilian users in connection with our asset management product, Mercado Pago debit card commissions and insurtech fees. (4) Includes interest earned on loans and advances granted to merchants and consumers, and interest and commissions earned on Mercado Pago credit card transactions. (5) Includes sales of mobile point of sales devices. (6) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results to our audited consolidated financial statements for further details. (7) Revenues from external customers in the U.S. amounted to $ 35 million for the year ended December 31, 2024. There were no revenues from external customers in the U.S. for the years ended December 31, 2023 and 2022. The following tables summarize the allocation of the property and equipment based on geography: December 31, 2024 Brazil Mexico Argentina U.S. Other countries Total (In millions) Property and equipment $ 1,078 $ 713 $ 434 $ 10 $ 178 $ 2,413 Accumulated depreciation ( 497 ) ( 239 ) ( 199 ) ( 6 ) ( 92 ) ( 1,033 ) Total property and equipment, net $ 581 $ 474 $ 235 $ 4 $ 86 $ 1,380 December 31, 2023 Brazil Mexico Argentina U.S. Other countries Total (In millions) Property and equipment $ 970 $ 554 $ 370 $ 7 $ 172 $ 2,073 Accumulated depreciation ( 367 ) ( 209 ) ( 162 ) ( 5 ) ( 80 ) ( 823 ) Total property and equipment, net $ 603 $ 345 $ 208 $ 2 $ 92 $ 1,250 115 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following tables summarize the allocation of the operating lease right-of-use assets based on geography: December 31, 2024 Brazil Mexico Argentina U.S. Other countries Total (In millions) Right of use asset $ 618 $ 616 $ 76 $ 4 $ 115 $ 1,429 Accumulated amortization ( 139 ) ( 116 ) ( 36 ) ( 1 ) ( 39 ) ( 331 ) Total right of use asset, net $ 479 $ 500 $ 40 $ 3 $ 76 $ 1,098 December 31, 2023 Brazil Mexico Argentina U.S. Other countries Total (In millions) Right of use asset $ 509 $ 480 $ 80 $ — $ 104 $ 1,173 Accumulated amortization ( 113 ) ( 100 ) ( 29 ) — ( 32 ) ( 274 ) Total right of use asset, net $ 396 $ 380 $ 51 $ — $ 72 $ 899 The following tables summarize the allocation of the goodwill and intangible assets based on geography: December 31, 2024 Brazil Mexico Argentina U.S. Other countries Total (In millions) Intangible assets at fair value $ — $ — $ — $ 49 $ — $ 49 Goodwill and intangible assets 64 43 23 — 71 201 Accumulated amortization ( 6 ) ( 4 ) ( 7 ) — ( 23 ) ( 40 ) Total goodwill and intangible assets, net $ 58 $ 39 $ 16 $ 49 $ 48 $ 210 December 31, 2023 Brazil Mexico Argentina U.S. Other countries Total (In millions) Intangible assets at fair value $ — $ — $ — $ 24 $ — $ 24 Goodwill and intangible assets 73 53 17 — 73 216 Accumulated amortization ( 5 ) ( 9 ) ( 5 ) — ( 23 ) ( 42 ) Total goodwill and intangible assets, net $ 68 $ 44 $ 12 $ 24 $ 50 $ 198 116 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 11. FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES Assets and liabilities measured and recorded at fair value on a recurring basis The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and 2023: Balances as of December 31, 2024 Quoted Prices in active markets for identical Assets (Level 1) Significant other observable inputs (Level 2) Unobservable inputs (Level 3) Balances as of December 31, 2023 Quoted Prices in active markets for identical Assets (Level 1) Significant other observable inputs (Level 2) (In millions) Cash and cash equivalents: Money market $ 572 $ 572 $ — $ — $ 639 $ 639 $ — U.S. government debt securities (1) — — — — 60 60 — Foreign government debt securities (1) 4 4 — — 32 32 — Restricted cash and cash equivalents: Money market (2) 297 297 — — 278 278 — Foreign government debt securities (1) 469 469 — — 116 116 — Investments: U.S. government debt securities (1) 1,087 1,087 — — 1,009 1,009 — Foreign government debt securities (1) (3) 4,114 4,114 — — 2,530 2,530 — Corporate debt securities 262 262 — — 30 30 — Other assets: Derivative instruments 58 — 58 — 23 — 23 Intangible assets at fair value 49 49 — — 24 24 — Total assets $ 6,912 $ 6,854 $ 58 $ — $ 4,741 $ 4,718 $ 23 Salaries and social security payable: Long-term retention program $ 163 $ — $ 163 $ — $ 104 $ — $ 104 Other Liabilities: Contingent considerations 4 — — 4 — — — Derivative Instruments 31 — 31 — 31 — 31 Meli Dólar liability (1) 31 — 31 — — — — Total liabilities $ 229 $ — $ 225 $ 4 $ 135 $ — $ 135 (1) Measured at fair value with impact on the consolidated statements of income for the application of the fair value option. (See Note 2 – Summary of significant accounting policies – Fair value option applied to certain investments and Meli Dólar liability.) (2) As of December 31, 2024 and 2023 includes $ 283 million and $ 269 million, respectively, of money market funds from securitization transactions. (See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments.) (3) As of December 31, 2024 and 2023 includes $ 12 million and $ 23 million, respectively, of investments from securitization transactions. (See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments.) 117 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The Company’s assets and liabilities measured and recorded at fair value on a recurring basis were valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets); ii) Level 2 inputs: obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date; and iii) Level 3 inputs: valuations based on unobservable inputs reflecting Company’s assumptions. The unobservable inputs of the fair value of contingent considerations classified as Level 3 refer to the amounts to be paid according to the respective agreements of each acquisition, the likelihood of achievement of the performance targets arising from each one (expected to be 100%), and the Company’s historical experience with similar arrangements. Reasonable variation on those unobservable inputs would not significantly change the fair value of those instruments. As of December 31, 2024 and 2023, the Company had not changed the methodology nor the assumptions used to estimate the fair value of the financial instruments. There were no transfers to and from Levels 1, 2 and 3 during the years ended December 31, 2024 and 2023. The Company’s election of the fair value option applies to: i) foreign government debt securities, ii) U.S. government debt securities and iii) Meli Dólar liability. The Company recognized fair value changes of foreign and U.S. government debt securities, which include the related interest income of those instruments, in net service revenues and financial income if it is related to Mercado Pago’s operations (please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior years results) or in interest income and other financial gains if not. Such fair value changes and interest income amount to gains of $ 329 million and $ 230 million in net service revenues and financial income, and $ 57 million and $ 38 million in interest income and other financial gains for the years ended December 31, 2024 and 2023, respectively. The Meli Dólar liability has not presented changes in its fair value for the year ended December 31, 2024. No Meli Dólar liability existed during the year ended December 31, 2023. As of December 31, 2024 and 2023, the cost of the Company’s investment in corporate debt securities classified as available for sale amounted to $ 259 million and $ 30 million, respectively, and the estimated fair value amounted to $ 262 million and $ 30 million, respectively. The cost of these securities is determined under a specific identification basis. As of December 31, 2024 and 2023, the gross unrealized gains accumulated in the consolidated statements of comprehensive income amounted to $ 3 million and less than $ 1 million, respectively. For the year ended December 31, 2024, the proceeds from sales of corporate debt securities amounted to $ 26 million. There were no sales of corporate debt securities during the year ended December 31, 2023. The following table summarizes the net carrying amount of the investments classified as available for sale (Corporate debt securities), classified by its contractual maturities: December 31, 2024 2023 (In millions) One year or less $ 87 $ 5 One year to two years 45 12 Two years to three years 21 4 Three years to four years 63 3 Four years to five years 46 6 Total available for sale investments $ 262 $ 30 The following table summarizes the net carrying amount of the debt securities not classified as available for sale (U.S. and foreign government debt securities), classified by its contractual maturities or Management expectation to convert the investments into cash: December 31, 2024 2023 (In millions) One year or less $ 4,711 $ 3,668 One year to two years 475 4 Two years to three years 152 — Three years to four years 231 35 Four years to five years 104 37 More than five years 1 3 Total debt securities not classified as available for sale $ 5,674 $ 3,747 118 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Financial assets and liabilities not measured and recorded at fair value The following table summarizes the estimated fair value level of the financial assets and liabilities of the Company not measured at fair value as of December 31, 2024 and 2023: Balances as of December 31, 2024 Estimated fair value as of December 31, 2024 Balances as of December 31, 2023 Estimated fair value as of December 31, 2023 (In millions) Cash and cash equivalents $ 2,059 $ 2,059 $ 1,825 $ 1,825 Restricted cash and cash equivalents (1) 1,298 1,298 898 898 Investments 160 160 15 15 Accounts receivables, net 255 255 156 156 Credit card receivables and other means of payment, net 5,288 5,288 3,632 3,632 Loans receivable, net 4,895 4,840 2,694 2,676 Other assets 114 114 131 131 Total Assets $ 14,069 $ 14,014 $ 9,351 $ 9,333 Accounts payable and accrued expenses $ 3,196 $ 3,196 $ 2,117 $ 2,117 Funds payable to customers 6,954 6,954 4,475 4,475 Amounts payable due to credit and debit card transactions 1,964 1,964 1,092 1,092 Salaries and social security payable 564 564 441 441 Loans payable and other financial liabilities 5,593 5,499 4,495 4,441 Other liabilities 356 356 285 285 Total Liabilities $ 18,627 $ 18,533 $ 12,905 $ 12,851 (1) As of December 31, 2024 and 2023 includes $ 38 million and $ 12 million of cash in banks, and $ 171 million and $ 74 million of time deposits from securitization transactions, respectively. (See Note 5 – Cash, cash equivalents, restricted cash and cash equivalents and investments.) As of December 31, 2024 and 2023, the carrying value of the Company’s financial assets with determinable fair value (except for loans receivable) not measured at fair value approximated their fair value mainly because of their short-term maturity. If these financial assets were measured at fair value in the financial statements, cash and restricted cash would be classified as Level 1 (where cost and fair value are aligned) and the remaining financial assets would be classified as Level 2. The estimated fair value of the loans receivable would be classified as Level 3 based on the Company’s assumptions. As of December 31, 2024 and 2023, the carrying value of the Company’s financial liabilities (except for 2026 Sustainability Notes and 2031 Notes) not measured at fair value approximated their fair value mainly because of their short-term maturity or because the effective interest rates are not materially different from market interest rates. If these financial liabilities were measured at fair value in the financial statements, these would be classified as Level 2. As of December 31, 2024 and 2023, the estimated fair value o f the 2026 Notes would be $ 351 million and $ 375 million, respectively, and the estimated fair value of the 2031 Notes would be $ 475 million and $ 599 million, respectively, which is based on Level 2 inputs. NOTE 12. COMMON STOCK Authorized, issued and outstanding shares As of December 31, 2024 and 2023, as stated in the Company’s Fourth Amended and Restated Certificate of Incorporation, the Company has authorized 110,000,000 shares of Common Stock, par value $ 0.001 per share (“Common Stock”). As of December 31, 2024 and 2023, there were 50,697,375 and 50,697,442 shares of common stock issued and outstanding with a par value of $ 0.001 per share. Voting rights Each outstanding share of common stock, is entitled to one vote on all matters submitted to a vote of holders of common stock, except for stockholders that beneficially own more than 20 % of the shares of the outstanding common stock, in which case the board of directors (the “Board”) may declare that any shares of stock above such 20 % do not have voting rights. The holders of common stock do not have cumulative voting rights in the election of directors. 119 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 13. REDEEMABLE CONVERTIBLE PREFERRED STOCK Pursuant to the Fourth Amended and Restated Certificate of Incorporation, the Company is authorized to issue 40,000,000 shares of preferred stock, par value $ 0.001 per share. As of December 31, 2024, and 2023 the Company has no preferred stock subscribed or issued. NOTE 14. EQUITY COMPENSATION PLAN On June 10, 2019, at the Annual Shareholders’ Meeting, the Company’s shareholders approved the adoption of the Amended and Restated 2009 Equity Compensation Plan (the “Amended and Restated 2009 Plan”), which contains terms substantially similar to the terms of the “2009 Equity Compensation Plan” (the “2009 Plan”) that expired in 2019. As of December 31, 2024, there are 989,289 shares of common stock available for granting under the Amended and Restated 2009 Plan. Equity compensation awards granted under the Amended and Restated 2009 Plan are at the discretion of the Company’s board of directors and may be in the form of either incentive or non-qualified stock options. As of December 31, 2024, there were 4,179 shares of restricted stock outstanding under such plan. NOTE 15. INCOME TAXES The components of income tax for the years ended December 31, 2024, 2023 and 2022 are as follows: Year Ended December 31, 2024 2023 2022 (In millions) Income Tax: Current: U.S. $ 64 $ 41 $ 12 Non-U.S. 700 812 383 764 853 395 Deferred: U.S. 17 36 55 Non-U.S. ( 260 ) ( 320 ) ( 152 ) ( 243 ) ( 284 ) ( 97 ) Income tax expense $ 521 $ 569 $ 298 The components of net income before tax expense and equity in earnings of unconsolidated entity for the years ended December 31, 2024, 2023 and 2022 are as follows: Year Ended December 31, 2024 2023 2022 (In millions) U.S. $ 94 $ ( 362 ) $ ( 207 ) Non-U.S. 2,338 1,915 987 $ 2,432 $ 1,553 $ 780 120 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following is a reconciliation of the difference between the actual charge for income tax and the expected income tax expense computed by applying the statutory income tax rate for the years ended December 31, 2024, 2023 and 2022 to net income before income tax: Year Ended December 31, 2024 2023 2022 (In millions) Net income before income tax expense and equity in earnings of unconsolidated entity $ 2,432 $ 1,553 $ 780 Income tax rate 21 % 21 % 21 % Expected income tax expense $ 511 $ 326 $ 164 Permanent differences: Transfer pricing adjustments 5 11 3 Non-deductible tax — 7 1 Non-deductible expenses 27 107 54 Tax on retained earnings 147 105 55 Foreign Tax effects ( 206 ) ( 137 ) ( 43 ) Non-taxable income ( 134 ) ( 167 ) ( 62 ) Effect of rates different than statutory 34 117 37 Currency translation 56 335 48 Change in valuation allowance 220 4 92 Tax Inflation Adjustments ( 130 ) ( 136 ) ( 35 ) True up ( 9 ) ( 3 ) ( 16 ) Income tax expense $ 521 $ 569 $ 298 Income taxes are determined by each subsidiary on a standalone basis according to income tax law of each jurisdiction. The Company’s consolidated effective tax rate for year ended December 31, 2024 as compared to 2023, decreased from 36.6 % to 21.4 % largely as a result of i) no foreign exchange losses recognition during the year related to the acquisition of Company's 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. 121 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse. The following table summarizes the composition of deferred tax assets and liabilities for the years ended December 31, 2024 and 2023: December 31, 2024 2023 (In millions) Deferred tax assets Allowance for doubtful accounts $ 371 $ 234 Unrealized net losses 4 3 Property and equipment, net 79 58 Accounts payable and accrued expenses 22 8 Payroll and social security payable 48 42 Provisions 309 275 U.S. foreign tax credit 528 304 Tax loss carryforwards 64 177 Inventories 18 14 Total deferred tax assets 1,443 1,115 Valuation allowance ( 584 ) ( 374 ) Total deferred tax assets, net 859 741 Deferred tax liabilities Property and equipment, net ( 33 ) ( 21 ) Unrealized net gains ( 7 ) ( 4 ) Goodwill ( 3 ) ( 4 ) Accounts payable and accrued expenses — ( 2 ) Payroll and social security payable ( 1 ) — Outside Basis Dividends ( 200 ) ( 182 ) Others ( 17 ) ( 1 ) Total deferred tax liabilities $ ( 261 ) $ ( 214 ) $ 598 $ 527 Valuation allowance on deferred tax assets The following table summarizes the tax valuation allowance activity during the years ended December 31, 2024, 2023 and 2022: Year Ended December, 31 2024 2023 2022 Tax valuation allowance (In millions) Balance at beginning of year $ 374 $ 360 $ 262 Charged to Net income 220 4 92 Charges Utilized/Currency translation adjustments and other adjustments ( 10 ) 10 6 Balance at end of year $ 584 $ 374 $ 360 122 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements As of December 31, 2024, consolidated deferred tax asset on tax loss carryforwards for income tax purposes wer e $ 64 million . If not utilized, tax loss carryforwards will begin to expire as follows: 2027 $ 1 2029 4 2030 3 2031 25 2032 7 Thereafter 2 Without due dates 22 Total $ 64 Ba sed on Management’s assessment of available objective evidence, the Company maintained a valuation allowance on deferred tax assets of $ 584 million and $ 374 million as of December 31, 2024 and 2023, respectively. This valuation allowance includes $ 528 million and $ 304 million to fully reserve the outstanding U.S. foreign tax credits as of December 31, 2024 and 2023, respectively. The valuation allowance increased as of December 31, 2024 compared to 2023, mainly related to the impairment of $ 224 million on U.S. foreign tax credit, offset by the utilization of loss carryforwards impaired through the valuation allowance on its Mexican operation by $ 26 million. Knowledge-based economy promotional regime in Argentina In August 2021, the Under Secretariat of Knowledge Economy issued the Disposition 316/2021 approving MercadoLibre S.R.L.’s application for eligibility under the knowledge-based economy promotional regime, established by the Law No. 27,506 and complemented by Argentina’s Executive Power Decree No. 1034/2020, Argentina’s Ministry of Productive Development’s Resolution No. 4/2021 and the Under Secretariat of Knowledge Economy’s Disposition No. 11/2021. Based on the promotional regime, companies that meet specified criteria shall be entitled to: i) a reduction of the income tax burden over the promoted activities for each fiscal year, ii) stability of the benefits established by the knowledge-based economy promotional regime, and iii) a tax credit bond on the Company’s contribution to the social security regime of every employee whose job is related to the promoted activities. On September 13, 2024, Argentina´s Secretariat of Entrepreneurs and Small and Medium Enterprises and Knowledge-Based Economy issued Resolution 267/2024, reducing the aggregate cap on base salaries used to calculate the tax credit bond to which companies that qualify for the regime are entitled from 40 million Argentine pesos to 5 million Argentine pesos; the tax credit bond represents 70 % of the Company´s social security contributions for those employees whose jobs are related to the promoted activities, with a salary cap which has been reduced to the indicated limit. MercadoLibre S.R.L uses the tax credit bond to offset federal taxes. As a result, the Company recorded an income tax benefit of $ 33 million, $ 42 million and $ 27 million, during the years ended December 31, 2024, 2023 and 2022, respectively. The aggregate per share effect of the income tax benefit amounted to $ 0.65 , $ 0.84 and $ 0.54 for the years ended December 31, 2024, 2023 and 2022, respectively. Furthermore, the Company recorded a social security benefit of $ 24 million, $ 67 million and $ 54 million for the years ended December 31, 2024, 2023 and 2022, respectively. NOTE 16. COMMITMENTS AND CONTINGENCIES Litigation and Other Legal Matters The Company is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it considers it to be probable that future costs will be incurred and such costs can be reasonably estimated. Proceeding-related liabilities are based on developments to date and historical information related to actions filed against the Company. As of December 31, 2024, the Company had accounted for estimated liabilities involving proceeding-related contingencies and other estimated contingencies of $ 135 million (net of judicial deposits) within non current other liabilities to cover legal actions against the Company for which its Management has assessed the likelihood of a final adverse outcome as probable. Expected legal costs related to litigations are accrued when the legal service is actually provided. In addition, as of December 31, 2024, the Company and its subsidiaries are subject to certain legal actions considered by the Company's Management and its legal counsels to be reasonably possible of resulting in a loss for an aggregate amount up to $ 257 million . No loss amounts have been accrued for such reasonably possible legal actions, the most significant of which are described below. 123 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following table summarizes the contingencies activity during the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Contingencies (In millions) Balance at beginning of year $ 124 $ 53 $ 13 Charged to Net income 176 335 16 Judicial deposits ( 92 ) ( 273 ) — Charges Utilized / Currency translation adjustments / Write-offs ( 73 ) 9 24 Balance at end of year $ 135 $ 124 $ 53 Tax Claims Withholding Tax in the Brazil-Argentina Double Taxation Treaty On November 6, 2014, the Brazilian subsidiaries, Mercadolivre.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Pago Instituição de Pagamento Ltda. (formerly known as “Mercado Pago.com Representações Ltda.”) and the Argentine subsidiary, MercadoLibre S.R.L., filed a writ of mandamus and requested a preliminary injunction with the Federal Court of Osasco against the federal tax authority to avoid the withholding income tax (“IRRF”) over payments remitted by the Brazilian subsidiaries to MercadoLibre S.R.L. for the provision of IT support and assistance services by the latter, and requested reimbursement of the amounts improperly withheld over the course of the preceding five (5) years, by applying the convention signed between Brazil and Argentina to prevent double taxation (the “Brazil-Argentina Treaty”). The preliminary injunction was granted on the grounds that such withholding income tax violated the convention signed between Brazil and Argentina that prevents double taxation. In August 2015, the injunction was revoked by the first instance judge in an award favorable to the federal tax authority. The Company appealed the decision and deposited into court the disputed amounts. In June 2020, the Company’s appeal was dismissed. The Company submitted a new remedy before the same court in July 2020, which was dismissed on February 17, 2021. On March 18, 2021, the Company filed two appeals with the superior courts. However, the Vice President of the local Federal Court dismissed the remittance of the appeals to the Superior Courts and retained the cases in the local court. Against this decision, the Company filed new appeals, one interlocutory appeal in the Federal Court and other interlocutory appeal in the Superior Courts. On November 29, 2023, the interlocutory appeal was dismissed in the Federal Court, whereas on April 3, 2024, the Superior Court of Justice decided to analyze whether the matter under consideration is capable of becoming a binding precedent. In April 2024, the Company submitted a petition claiming that the case is fully capable of being judged as a binding precedent and the civil association Câmara Brasileira da Economia Digital submitted a petition as amicus curiae with the same arguments. On October 14, 2024, the Superior Court of Justice decided the matter under consideration will be judged as a binding precedent. Besides, in cases involving other taxpayers which also applied the convention signed between Brazil and Argentina to prevent double taxation ( “ Convention ” ) as amended by the 2017 protocol, the Superior Court of Justice decided the IRRF is due in the State of the source (i.e. Brazil), given that the Convention grants such rights regardless whether the services provided between the parties contain transfer of technology or not. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is probable based on the technical merits of the Company’s tax position and the existence of adverse decisions issued by the Superior Court of Justice previously mentioned. For that reason, the Company has recorded a provision for the disputed amounts, which was $ 338 million as of December 31, 2024, and which was recorded in non-current other liabilities in the consolidated balance sheets, net of the corresponding judicial deposits for $ 307 million (which includes $ 60 million of interest income). Considering that the Brazil-Argentina Treaty to prevent double taxation was amended in 2017, the Company started a new tax claim for the period from January 2019 onwards, and the court granted a preliminary injunction recognizing the right of collecting the withholding tax at a 10 % rate. As a result of this preliminary injunction, further judicial deposits of withholding tax will be based on a rate of 10 %. According to the current stage of both cases, the Company maintains the provision considering a 15 % rate. Interstate rate of ICMS-DIFAL on interstate sales Interstate rate of ICMS-DIFAL on interstate sales without Complementary Law During 2020 and 2021, the Brazilian subsidiaries, eBazar.com.br Ltda. and Mercado Pago Instituição de Pagamento Ltda., filed 15 writs of mandamus with the State Courts of Justice where these companies have sales branches in order to prevent Brazilian states from collecting the ICMS on interstate sales at a differential rate (“ICMS-DIFAL”) without the existence of a complementary law. Four of these cases were filed in 2020 (for the branches of Barueri and Louveira) and the other 11 were filed in 2021, after eBazar.com.br Ltda. opened a new branch in Extrema. On February 24, 2021, the Brazilian Supreme Court ruled on the controversy in a binding precedent, which declared the unconstitutionality of ICMS-DIFAL without the proper complementary law. In the same case, however, the Supreme Court ruled on the modulation of the effects of its decision (with retroactive effect). 124 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements From those 11 cases filed by the Company after the Supreme Court’s decision (after February 24, 2021), 7 became final and unappealable in favor of the corresponding States (cases related to the branch of Extrema: São Paulo, Rio Grande do Sul, Paraná, Distrito Federal, Bahia, Rio de Janeiro and Santa Catarina), and therefore their corresponding liabilities were settled with the corresponding judicial deposits. Another one of the 11 cases became final and unappealable in favor of Ebazar.com.br Ltda. Finally, the remaining 3 of those 11 cases are still pending and may not stand because of the modulation of effects with respect to that decision. In addition, a case related to the State do Goiás received judgment in favor of the Company, as a result of which, in June 2024, the State filed an appeal that was rejected by the Court. The case has not become final and unappealable. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing is probable. For that reason, the Company has recorded a $ 2 million provision for the disputed amounts related to these 3 cases, which are presented net of the corresponding judicial deposits of $ 2 million. With respect to the 4 cases filed by the Company prior to the Supreme Court’s decision (before February 24, 2021), 2 of them became final and unappealable in favor of the Company. Of the remaining 2 cases, in June 2024, one of the cases. related to the State of Rio de Janeiro, received judgment partially in favor of the Company. Therefore, the Company presented a motion of clarification which is now pending judgment. In September 2024, the other one of the cases, related to the State of Paraná, had been received in the Superior Tribunal of Justice to the judgment of a Special Appeal filed by the State, which is now pending. The Company has not recorded any liability for the controversial amounts. The Company deposited into court the disputed amounts. As of December 31, 2024, the total amount of the deposits related to the ongoing cases was $ 3 million. Interstate rate of ICMS-DIFAL on interstate sales under Law No. 190/22 In January 2022, (therefore, already in the course of fiscal year 2022 and already in full application of the understanding of the Supreme Court for unconstitutionality), supplementary Law No. 190/22 was published, outlining the general rules for the requirement of DIFAL and expressly mentioning the need to comply with the principle of anticipation or prospective application of taxes (pursuant to which no tax may be levied before the expiry of ninety days from the enactment of the law or in the same fiscal year of enactment). Notwithstanding this provision, which expressly points to the need to comply with the anticipation, Brazil’s Federation States have not complied with this guarantee. Therefore, eBazar.com.br Ltda. and Mercado Pago Instituição de Pagamento Ltda., filed writs of mandamus to the 27 Federation States, aimed at preventing the Brazilian tax authorities demand payments of the DIFAL. In this regard, the Brazilian Supreme Court (“STF”) has issued a decision regarding the constitutionality of the supplementary Law on November 29, 2023. In the judgment, the majority of STF judges considered the supplementary Law No. 190/22 to be constitutional, therefore, the ICMS-DIFAL is due from April 5, 2022, due to the corresponding time lapse of ninety days between the law enacting and the beginning of the charge. The decision has not yet become final and unappealable and a motion to clarify was presented on May 13, 2024. However, such motion to clarify is unlikely to change the merit of the decision. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is remote for the period between January 1, 2022 to April 4, 2022, and probable for the period between April 5, 2022 to December 31, 2022 based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any liability for the controversial amounts related to the period through April 4, 2022, and has recorded liabilities for the disputed amounts related to the period from April 5, 2022 to December 31, 2022, by $ 27 million, which are presented net of the corresponding judicial deposits of $ 24 million. Interstate rate of ICMS-DIFAL over fixed assets From April to September 2022, the Brazilian subsidiary Mercado Envios Serviços de Logística Ltda., now incorporated by eBazar.com.br Ltda., also filed writs of mandamus to 3 Federation States (São Paulo, Santa Catarina and Bahia), for the purpose of preventing the Brazilian tax authorities from demanding payment of the DIFAL over their respective fixed assets not explicitly addressed by the supplementary Law No. 190/22. Regarding this topic, the STF has not expressly pointed to the principle of anticipation. Therefore, there are two controversies regarding DIFAL over fixed assets: (i) if DIFAL is applicable under the previous supplementary Law No. 87/96, and (ii) if supplementary Law No. 87/96 is deemed not applicable, if the new supplementary Law No. 190/22 needs to comply with the principle of anticipation. In this last controversy, the same decision above mentioned applies to the Brazilian subsidiary Mercado Envios Serviços de Logística Ltda., and its writs of mandamus. Therefore, Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is reasonably possible for the period between January 1, 2022 to April 4, 2022, and probable for the period between April 5, 2022 to December 31, 2022 based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any liability for the controversial amounts related to the period until April 4, 2022, and has recorded liabilities for the disputed amounts related to the period from April 5, 2022 to December 31, 2022 for $ 3 million which are presented net of the corresponding judicial deposits of $ 2 million. Exclusion of ICMS tax benefits from federal taxes base The Company has ICMS tax incentives granted by the State of Minas Gerais, through a special regime signed with the state by means of a term of agreement, which are aimed at implementing and expanding business in that state. See Note 2 – Summary of significant accounting policies of these audited consolidated financial statements for additional detail on the ICMS tax incentives. 125 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements On November 9, 2021 the Company filed a writ of mandamus which claimed the exclusion of the amounts relating to the ICMS tax benefits granted by the State of Minas Gerais through the special regime from the tax base of the Corporate Income Tax (“IRPJ”) and of the Social Contribution on Net Profits (“CSLL”). On January 31, 2022, a decision was rendered granting the injunction requested in order to exclude the amounts of tax benefits granted by the State of Minas Gerais in the tax base of IRPJ and CSLL. On August 14, 2023, a judgment was handed down in favor of the Company and the Public Prosecutor's Office filed an appeal. On April 17, 2024, the Federal Regional Court ruled in favor of the Company. Therefore, the Federal Government presented a motion of clarification, which was rejected in August 2024. In response, the Federal Government filed a special appeal, but it was rejected on October 10, 2024. Against this last decision, on October 29, 2024, the Tax Authority filed an Interlocutory Appeal. On December 6, 2024, the case was remitted to the Superior Court of Justice. On February 5, 2025, the STJ rejected the Interlocutory Appeal filed by the Tax Authority. The case has not yet become final and unappealable. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is not more likely than not based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any expense or liability for the disputed amounts. The Company recorded a corresponding income tax benefit arising from the ICMS tax incentives for the period from September 2021 up to December 2023, which was $ 33 million as of December 31, 2024. In December 2023 Law 14,789 was enacted, with effect from January 2024, modifying the previous regulation so that the inclusion of the presumed tax credits in the calculation basis of IRPJ/CSLL would become mandatory. On October 18, 2024, the subsidiary eBazar.com.br Ltda. filed two new writs of mandamus, seeking the recognition of the right not to submit to the illegal and unconstitutional requirement of the IRPJ and the CSLL on the presumed tax credits from transactions related to the ICMS in the fiscal year of 2024 forward. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case under the new laws is not more likely than not based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any expense or liability for the disputed am ounts. T he Company recorded a corresponding income tax benefit arising from the ICMS tax incentives from January 2024 onwards, which was $ 31 million as of December 31, 2024. On April 25, 2023, the Company filed a writ of mandamus seeking an injunction and claiming the exclusion of the amounts relating to the ICMS tax benefits granted by the State of Minas Gerais in the tax base of the Social Contributions (PIS and COFINS). On May 26, 2023, a decision was rendered granting the injunction requested. On April 25, 2024, a ruling favorable to the Company was issued. On June 7, 2024, the Federal Government filed an appeal. The Company responded to the appeal and the case was referred to the Court for judgment on the request for an appeal. On October 29, 2024, a decision was issued for the proceedings to be suspended until a final decision on the Topic 843/STF. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is reasonably possible but not probable based on the technical merits of the Company’s tax position. For that reason, the Company has not recorded any expense or liability for the disputed am ounts. The Company recorded PIS and COFINS tax benefits arising from the ICMS tax incentives, which amount to $ 17 million as of December 31, 2024. Services Tax exclusion in the tax base of the Federal Contributions (PIS/COFINS) On August 29, 2017, the Brazilian subsidiaries, eBazar.com.br Ltda., Ibazar.com Atividades de Internet Ltda., Mercado Pago Instituição de Pagamento Ltda., and Mercado Envios Serviços de Logística Ltda., filed a writ of mandamus and requested a preliminary injunction before the Federal Justice in Osasco against the Federal Government to exclude the Municipal Service Tax in the tax base of the Federal Contributions (PIS/COFINS). The federal judge granted the preliminary injunction and ruled in favor of the companies on January 15, 2019. On April 8, 2019, the Federal Government presented an appeal that was rejected by the Federal Court. Following the Federal Court's decision, the Federal Government filed two appeals with the superior courts. Since February 12, 2021, the mandamus remained suspended by a decision settled by the Brazilian Supreme Court. The Brazilian Supreme Court started over the judgment on August 28, 2024. However, after a draw in the trial, the judges decided again to suspend the case. Management, based on the opinion of external legal counsel and the current composition of the Brazilian Supreme Court (who has shown dubious jurisprudence in similar cases), is of the opinion that the risk of losing the case is probable. For that reason, the Company has recognized a provision for the disputed amounts of $ 48 million . Administrative tax claims Federal taxes - Tax payments for the 2016 fiscal year On October 30, 2020 and November 9, 2020, Mercado Pago Instituição de Pagamento Ltda. and eBazar.com.br Ltda., respectively, received tax assessments claiming income tax payments for the 2016 fiscal year, with respective penalties and fines. In these assessments, the tax authorities do not recognize certain expenses incurred by the Brazilian subsidiaries, such as technology services imported from MercadoLibre S.R.L., Meli Uruguay S.R.L., and MercadoLibre, Inc., as deductible for income tax purposes. The tax authorities concluded that the Brazilian entities failed to submit sufficient evidence during the tax assessment that these services were necessary and effectively hired and paid by the Brazilian subsidiaries. The tax assessments that Mercado Pago Instituição de Pagamento Ltda . and eBazar.com.br Ltda. received amounted to a total of $ 17 million and $ 11 million, respectively, considering the exchange rate as of December 31, 2024. The subsidiaries filed their defenses on December 1, 2020 and December 8, 2020, respectively, arguing that the agreements and other documentation were submitted as evidence during the tax assessment. The defenses were also complemented by specific descriptions for each project that was impacted by such services to justify the necessity of all the expenses in dispute. On May 25, 2021, Mercado Pago Instituição de Pagamento Ltda. received an unfavorable decision from the administrative court in the first instance, and on June 28, 2021, eBazar.com.br also received an unfavorable decision from the administrative court in the first instance. The Companies filed appeals in respect of both cases with the administrative court in the second instance. On October 9, 2024, the administrative court of second instance issued a decision in order to return the case of eBazar.com.br Ltda. back to the first instance in an evidentiary proceeding. Therefore, eBazar.com.br provided a complementary report with more specific evidence. Regarding Mercado Pago Instituição de Pagamento Ltda., the appeal is still pending. Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is not more likely than not. For that reason, the Company has not recorded any expense or liability for the disputed amounts. 126 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Federal taxes - Revenue accounts 2017 fiscal year On December 30, 2022 , eBazar.com.br Ltda. and one of the Company’s Senior Legal Directors received three tax assessments claiming corporate income taxes (IRPJ and CSLL) in the amount of $ 64 million , withholding income tax (IRRF) in the amount of $ 10 million , and PIS and COFINS in the amount of $ 10 million , all of them in relation to the taxable year of 2017, including punitive fine of 150 % over the tax charged and interest on late payments based on the SELIC rate, and according to the exchange rate as of December 31, 2024. The Senior Legal Director was assessed as jointly liable with eBazar.com.br, due to his role as statutory officer, under provisions of the National T ax Code that enable joint tax liability for acts potentially in violation of the law or the by-laws. With respect to IRPJ, CSLL, PIS and COFINS, the tax authorities concluded that the Brazilian company failed to report taxable income as the company has made book entries in the profit and loss accounts, reverting previous revenues or other revenue accounts, as well as for using foreign languages such as English and Spanish in its book-keeping. The tax authorities also claimed that the company failed in the issuance of invoices, disregarding that the company indeed has a Special Tax Regime granted by the Municipality of Osasco that allows the issuance of a single invoice per period. On July 24, 2024 the administrative body of first instance issued a decision in the tax assessment case claiming corporate income taxes (IRPJ and CSLL). The decision issued is partially favorable to the Company as it rejected the punitive fine of 150 % over the tax charged and reduced it to 100 %, but maintained the tax assessment and also the joint tax liability of the Senior Legal Director. On August 28, 2024, after the administrative court of first instance issued an unfavorable decision and maintained the tax assessment, the Company filed an administrative appeal in the administrative court (“CARF”). The case has not yet become final and unappealable. Regarding the IRRF, the amount claimed by the tax authorities is already deposited in court under the writ of mandamus that discusses the company’s right not to pay IRRF on payments made to its affiliate in Argentina, due to the provisions of the Brazil and Argentina double tax treaty (for further details see contingency “Withholding Tax in the Brazil-Argentina Double Taxation Treaty”). Those deposits were incorrectly ignored by tax authorities. The Company presented the objection on January 30, 2023. Taking into account the documents attached to the Company's objection, in the case of PIS and COFINS, the administrative authorities decided in December 2023 to carry out a verification diligence to analyze the documents, which may influence the outcome of the case. The Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the cases is not more likely than not in the cases of IRPJ and CSLL and reasonably possible, but not probable in the cases of PIS and COFINS, based on the technical merits. In the case of IRRF, the Management’s opinion, based on the opinion of external legal counsel, is that the risk of losing the case is remote. For that reason, the Company has not recorded any expense or liability for the disputed amounts. Buyer protection program The maximum potential exposure under this program is estimated to be the volume of payments on the Marketplace, for which claims may be made under the terms and conditions of the Company’s BPP. Based on historical losses to date, the Company does not believe that the maximum potential exposure is representative of the actual potential exposure. The Company records a liability with respect to losses under this program when they are probable and the amount can be reasonably estimated. See Note 2 – Summary of significant accounting policies – Provision for buyer protection program of these audited consolidated financial statements for further detail. As of December 31, 2024 and 2023, Management’s estimate of the maximum potential exposure related to the Company’s buyer protection program is $ 5,769 million and $ 5,072 million, respectively, for which the Company recorded a provision of $ 14 million and $ 8 million, respectively. Commitments The Company 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 April 8, 2022, the Company signed a 10-year agreement with Gol Linhas Aereas S.A. under which the Company committed to contract a minimum amount of air logistics services for a total cost of $ 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, the Company signed 3-year agreements with certain shipping companies in Brazil, under which the Company committed to contract a minimum amount of logistics services for a total cost of $ 49 million. As of December 31, 2024, the remaining purchase commitment is $ 39 million. On January 10, 2024, the Company signed a 5-year agreement for the naming rights of the Complexo Pacaembu (municipal stadium of the city of São Paulo), for a total amount of $ 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. As of December 31, 2024, the Company has 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. The Company has 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. 127 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 17. LONG TERM RETENTION PROGRAM On April 18, 2024, the board of directors, upon the recommendation of the Compensation Committee, adopted the 2024 Long-Term Retention Program (“2024 LTRP”). In addition to the annual salary and bonus of each employee, certain employees (“Eligible Employees”) are eligible to participate in the 2024 LTRP, which provides for the grant to an Eligible Employee of a cash-settled fixed (a “2024 LTRP Fixed Award”) and cash-settled variable award (a “2024 LTRP Variable Award”, and together with any 2024 LTRP Fixed Award, the “2024 LTRP Awards”). In order to receive payment in respect of the 2024 LTRP Awards, each Eligible Employee must remain employed as of each applicable payment date. The 2024 LTRP award is payable as follows: ■ the eligible employee will receive 16.66 % of half of his or her target 2024 LTRP bonus once a year for a period of six years , with the first payment occurring no later th an April 30, 2025 ( the “2024 Annual Fixed Payment”); and ■ on each date the Company pays the Annual Fixed payment to the eligible employee, he or she will also receive a payment (the “2024 LTRP Variable Payment”) equal to the product of (i) 16.66 % of half of the target 2024 LTRP Award and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the 2023 Stock Price (as defined below). For purposes of the 2024 LTRP, the “2023 Stock Price” shall equal $ 1,426.11 (the average closing price of the Company’s common stock on the NASDAQ Global Select Market during the final 60 trading days of 2023) and the “Applicable Year Stock Price” shall equal the average closing price of the Company’s common stock on the NASDAQ Global Select Market during the final 60 trading days of the year preceding the applicable payment date for so long as the Company’s common stock is listed on the NASDAQ. The rest of the LTRPs outstanding as of December 31, 2024, 2023 and 2022 follow a similar calculation method as explained above for the 2024 LTRP, e xcept that the 2017 and 2018 LTRPs h ave performance conditions established by the board of directors that must be achieved at the first year-end of each program. Similar to the 2024 LTRP, the rest of the outstanding LTRPs additionally have eligibility conditions to be achieved at each year-end and require the employee remain employed by the Company as of each payment date. During the year ended December 31, 2024, the Company paid $ 160 million ($ 61 million in cash-settled fixed and $ 99 million in cash-settled variable award) of LTRP plus social security obligations applicable in each local jurisdiction. The following table summarizes th e 2017, 2018, 2019, 2020, 2021, 2022, 2023 and 2024 LTRP Variable Award contractual obligation for the years ended December 31, 2024, 2023 and 2022: December 31, 2024 December 31, 2023 December 31, 2022 Aggregate Intrinsic value Weighted-average remaining contractual life (years) Aggregate Intrinsic value Weighted-average remaining contractual life (years) Aggregate Intrinsic value Weighted-average remaining contractual life (years) (In millions) Outstanding LTRP 2017 — — — — 7 0.08 Outstanding LTRP 2018 — — 4 0.08 5 0.58 Outstanding LTRP 2019 23 0.08 37 0.61 35 1.08 Outstanding LTRP 2020 42 0.55 55 1.12 45 1.58 Outstanding LTRP 2021 41 1.04 51 1.62 39 2.08 Outstanding LTRP 2022 97 1.53 115 2.12 86 2.58 Outstanding LTRP 2023 234 2.03 270 2.62 — — Outstanding LTRP 2024 210 2.53 — — — — 128 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The following table summarizes the LTRP accrued compensation expense for the years ended December 31, 2024, 2023 and 2022: December 31, 2024 2023 2022 (In millions) LTRP 2017 $ — $ — $ ( 2 ) LTRP 2018 — 3 ( 1 ) LTRP 2019 26 18 16 LTRP 2020 28 21 19 LTRP 2021 26 23 21 LTRP 2022 45 42 31 LTRP 2023 75 60 — LTRP 2024 61 — — $ 261 $ 167 $ 84 129 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 18. LOANS PAYABLE AND OTHER FINANCIAL LIABILITIES The following tables summarize the Company’s loans payable and other financial liabilities as of December 31, 2024 and 2023: December 31, 2024 2023 (In millions) Loans from banks $ 946 $ 485 Bank overdrafts 26 33 Secured lines of credit 110 39 Financial Bills 7 — Deposit Certificates 1,068 976 Commercial Notes 5 7 Finance lease liabilities 41 35 Collateralized debt 610 693 2026 Sustainability Notes 4 4 2031 Notes 8 9 Other lines of credit 3 11 Current loans payable and other financial liabilities $ 2,828 $ 2,292 Loans from banks $ 217 $ 72 Secured lines of credit 6 17 Financial Bills 271 8 Deposit Certificates 2 — Commercial Notes 170 211 Finance lease liabilities 81 96 Collateralized debt 1,232 782 2026 Sustainability Notes 362 389 2031 Notes 546 626 Other lines of credit — 2 Non-Current loans payable and other financial liabilities $ 2,887 $ 2,203 130 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Type of instrument Currency Interest Weighted Average Interest Rate Maturity December 31, 2024 2023 (In millions) Loans from banks Chilean Subsidiaries Chilean Pesos Fixed 6.80 % January - December 2025 $ 134 $ 104 Brazilian Subsidiary Brazilian Reais Variable CDI + 0.81 March 2025 44 — Brazilian Subsidiary (1) US Dollar Fixed 5.55 % October - November 2025 211 216 Brazilian Subsidiary (1) Euros Fixed 4.16 % September 2025 - November 2026 190 — Brazilian Subsidiary Brazilian Reais Variable TJLP + 0.8 % January 2025 - May 2031 20 9 Mexican Subsidiaries Mexican Pesos Variable TIIE + 1.59 % - 3.50 % January 2025 - September 2029 512 178 Uruguayan Subsidiary Uruguayan Pesos Fixed 8.88 % January - June 2025 52 50 Bank overdrafts Uruguayan Subsidiary Uruguayan Pesos Fixed 9.64 % January 2025 15 13 Chilean Subsidiary Chilean Pesos Variable TIB + 2.00 % January 2025 11 20 Secured lines of credit Argentine Subsidiaries Argentine Pesos Fixed 37.62 % January - February 2025 102 29 Mexican Subsidiary Mexican Pesos Fixed 10.63 % January 2025 - July 2027 14 27 Financial Bills Brazilian Subsidiary Brazilian Reais Variable CDI + 0.45 % - 1.40 % March 2025 - September 2027 278 8 Deposit Certificates Brazilian Subsidiary Brazilian Reais Variable CDI + 0.29 % - 0.7 % January - November 2025 331 — Brazilian Subsidiary Brazilian Reais Variable 98 % to 150 % of CDI January 2025 - December 2026 480 703 Brazilian Subsidiary Brazilian Reais Fixed 10.69 % - 13.98 % January - June 2025 36 77 Brazilian Subsidiary Brazilian Reais Variable 101.5 % to 107.5 % of CDI January - February 2025 223 196 Commercial Notes Brazilian Subsidiary Brazilian Reais Variable DI + 0.88 % January 2025 - August 2027 60 78 Brazilian Subsidiary Brazilian Reais Variable IPCA + 6.41 % January 2025 - August 2029 115 140 Finance lease liabilities 122 131 Collateralized debt 1,842 1,475 2026 Sustainability Notes US Dollar Fixed 2.375 % January 2025 - January 2026 366 393 2031 Notes US Dollar Fixed 3.125 % January 2025 - January 2031 554 635 Other lines of credit 3 13 $ 5,715 $ 4,495 (1) The carrying amount includes the effect of the derivative instruments that qualified for fair value hedge accounting. See Note 23 – Derivative instruments of these audited consolidated financial statements for further detail. 131 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements See Note 21 – Securitization transactions and Note 22 – Leases of these audited consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease liabilities, respectively. 2.375 % Sustainability Senior Notes Due 2026 and 3.125 % Senior Notes Due 2031 On January 14, 2021, the Company closed a public offering of $ 400 million aggregate principal amount of 2.375 % Sustainability Notes due 2026 (the “2026 Sustainability Notes”) and $ 700 million aggregate principal amount of 3.125 % Notes due 2031 (the “2031 Notes”, and together with the 2026 Sustainability Notes, the “Notes”). The Company pays interest on the Notes on January 14 and July 14 of each year, beginning on July 14, 2021. The 2026 Sustainability Notes will mature on January 14, 2026, and the 2031 Notes will mature on January 14, 2031. In connection with the Notes, the Company capitalized $ 11 million of debt issuance costs, which are amortized during the term of the Notes. The Company may, at its option, redeem the 2026 Sustainability Notes, in whole or in part, at any time prior to December 14, 2025 (the date that is one month prior to the maturity of the 2026 Sustainability Notes) and the 2031 Notes, in whole or in part, at any time prior to October 14, 2030 (the date that is three months prior to the maturity of the 2031 Notes), in each case by paying 100 % of the principal amount of such Notes so redeemed plus the applicable “make-whole” amount and accrued and unpaid interest and additional amounts, if any. The Company may, at its option, redeem the 2026 Sustainability Notes, in whole or in part, on December 14, 2025 or at any time thereafter and the 2031 Notes on October 14, 2030 or at any time thereafter, in each case at the redemption price of 100 % of the principal amount of such Notes so redeemed plus accrued and unpaid interest and additional amounts, if any. If the Company experiences certain change of control triggering events, it may be required to offer to purchase the notes at 101 % of their principal amount plus any accrued and unpaid interest thereon through the purchase date. During 2023, the Company repurchased $ 9 million and $ 70 million principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively plus $ 1 million of interest accrued on the 2026 Sustainability Notes and 2031 Notes. The total amount paid during 2023 for those repurchases amounted to $ 66 million. During 2024, the Company repurchased $ 27 million and $ 81 million in principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively. The total amount paid during 2024 for those repurchases amounted to $ 98 million. For the years ended December 31, 2024 and 2023, the Company recognized $ 11 million and $ 14 million as a gain in Interest income and other financial gains in the consolidated statement of income. The Company allocated an amount equal to the net proceeds from the issuance of the 2026 Sustainability Notes to finance or refinance Eligible Projects. “Eligible Projects” are investments and expenditures made by the Company beginning with the issuance date of the 2026 Sustainability Notes or in the 24 months prior to the issuance of the 2026 Sustainability Notes, that: (i) contribute to environmental objectives such as: clean transportation, land conservation and preservation, energy efficiency, renewable energy, green buildings and pollution prevention and control, (ii) aim to address or mitigate a specific social issue or seek to achieve positive social outcomes especially, but not exclusively, for one or more target populations or (iii) combine (i) and (ii). Certain of the Company’s subsidiaries (the “Subsidiary Guarantors”) fully and unconditionally guarantee the payment of principal, premium, if any, interest, and all other amounts in respect of each of the Notes (the “Subsidiary Guarantees”). The initial Subsidiary Guarantors were MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., Mercado Pago Instituição de Pagamento Ltda. (formerly known as “MercadoPago.com Representações Ltda.”), MercadoLibre Chile Ltda., MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico (formerly known as “MercadoLibre, S. de R.L. de C.V.”), DeRemate.com de México, S. de R.L. de C.V. and MercadoLibre Colombia Ltda. On October 27, 2021, MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico became an excluded subsidiary pursuant to the terms of the Notes and it was released from its Subsidiary Guaranty. On October 27, 2021, MP Agregador, S. de R.L. de C.V. became a Subsidiary Guarantor under the Notes. On July 1 and October 1, 2022, Ibazar.com Atividades de Internet Ltda. and Mercado Envios Servicos de Logistica Ltda. were merged into eBazar.com.br Ltda, respectively. The Notes rank equally in right of payment with all of the Company’s other existing and future senior unsecured debt obligations. Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law. 2.00 % Convertible Senior Notes Due 2028 On August 24, 2018, the Company issued $ 800 million of 2.00 % Convertible Senior Notes due 2028 and issued an additional $ 80 million of notes on August 31, 2018 pursuant to the partial exercise of the initial purchasers’ option to purchase such additional notes, for an aggregate principal amount of $ 880 million of 2.00 % 2028 Notes. The 2028 Notes would have matured on August 15, 2028 unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The 2028 Notes were convertible, under specific conditions, based on an initial conversion rate of 2.2553 shares of common stock per $1,000 principal amount of the 2028 Notes (equivalent to an initial conversion price of $ 443.40 per share of common stock), subject to adjustment as described in the indenture governing the 2028 Notes. Holders were able to convert their 2028 Notes at their option at any time prior to February 15, 2028. In January 2021, the Company repurchased $ 440 million principal amount of the outstanding of the 2028 Notes. On September 19, 2023, the Company announced its intention to redeem all its 2028 Notes on November 14, 2023. Holders of the 2028 Notes could elect to convert their notes at any time before November 13, 2023. Each $1,000 principal amount of 2028 Notes was convertible into 2.2952 shares of MercadoLibre common stock. As of November 13, 2023, holders of the 2028 Notes converted $ 439 million principal amount of 2028 Notes into 1,007,597 shares of the Company’s common stock which MercadoLibre held as treasury stock. As of December 31, 2023, no principal amount of 2028 Notes remained outstanding. 132 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The Company entered into 2028 Notes Capped Call Transactions. The 2028 Notes Capped Call Transactions were expected generally to reduce the potential dilution upon conversion of the 2028 Notes in the event that the market price of the Company’s common stock was greater than the strike price and lower than the cap price of the 2028 Notes Capped Call Transactions. The settlement averaging period with respect to the 2028 Notes Capped Call Transactions began on June 28, 2023 and ended on August 30, 2023, and the 2028 Notes Capped Call Transactions settlement date was September 1, 2023. As a result the Company received 289,675 shares of common stock. Amended and Restated Revolving Credit Agreement On September 27, 2024, the Company entered into a $ 400 million amended and restated revolving credit agreement (the “Amended and Restated Credit Agreement”) with the lenders party thereto and the Company’s subsidiaries MercadoLibre S.R.L., Ebazar.com.br Ltda., Mercado Pago Instituição de Pagamento Ltda., DeRemate.com de Mexico S. de R.L. de C.V., MP Agregador, S. de R.L. de C.V., MercadoLibre Chile Ltda., and MercadoLibre Colombia Ltda. as initial guarantors (collectively, the “Initial Guarantors”). The Company’s obligations under the Amended and Restated Credit Agreement are guaranteed by the Initial Guarantors. 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 the Company’s debt rating, as further provided under the Amended and Restated Credit Agreement. Any loans drawn from the Amended and Restated Credit Agreement must be repaid on or prior to September 27, 2028, which will be automatically extended to September 27, 2029 upon satisfaction, on or prior to August 28, 2027, of the Maturity Extension Conditions (as defined in the Amended and Restated Credit Agreement), as further provided in the Amended and Restated Credit Agreement. The Company is also obligated to pay a commitment fee on the unused amounts of the facility at a rate per annum equal to 25 % of the then Applicable Margin, depending on the Company’s debt rating, as further provided under the Amended and Restated Credit Agreement. As of December 31, 2024, no amounts have been borrowed under the facility. NOTE 19. RELATED PARTY TRANSACTIONS Indemnification agreements The Company has entered into indemnification agreements with each of the directors and executive officers of its local subsidiaries. These agreements require the Company to indemnify such individuals, to the fullest extent permitted by the laws of the jurisdiction where these subsidiaries operate, for certain liabilities to which they may become subject by reason of the fact that such individuals are or were directors or executive officers of the local subsidiaries of the Company. Advisory Agreement and Shares granted On April 8, 2022, the Company entered into an Advisory Services Agreement with Mr. Stelleo Tolda (former MercadoLibre’s Executive officer) whereby he provided to the Company with certain consulting and advisory services as an independent contractor for a three-year period for a fee of $ 10,000 per month. This advisory services agreement was terminated in its entirety effective September 13, 2024 due to Mr. Tolda’s appointment as a Class I director of the Company, with a term of service of September 12, 2024 through until the Company’s 2025 Annual Meeting of Stockholders and until his successor is duly elected and qualified or until his earlier death, resignation or removal. The Company also entered into a restricted stock award agreement with Mr. Tolda on April 8, 2022, whereby the Company awarded Mr. Tolda a grant of 5,051 shares of restricted stock under the Amended and Restated 2009 Equity Compensation Plan. One-fifth of the restricted stock award vests on each of the five anniversaries of the grant date, subject to Mr. Tolda’s continued compliance with the restrictive covenants set forth in the agreement. As of December 31, 2024, Mr. Tolda continues to comply with the aforementioned restrictive covenants. NOTE 20. CASH DIVIDEND DISTRIBUTION After reviewing the Company’s capital allocation process the board of directors has concluded that it has multiple investment opportunities that can generate greater return to shareholders through investing capital into the business over a dividend policy. Consequently, the board of directors suspended the payment of dividend to shareholders as from the first quarter of 2018. 133 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 21. SECURITIZATION TRANSACTIONS The process of securitization consists of the issuance of securities collateralized by a pool of assets through a special purpose entity (“SPEs”), often under a VIE. The Company securitizes financial assets associated with its credit card receivables and loans receivable portfolio. The Company’s securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote SPEs. The Company generally retains economic interests in the collateralized securitization transactions, which are retained in the form of subordinated interests. For accounting purposes, the Company is generally precluded from recording the transfers of assets in securitization transactions as sales and is required to consolidate the SPE. The Company securitizes certain credit card receivables related to users’ purchases through Chilean SPEs. Under the SPE contracts, the Company has determined that it has no obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it does not retain any equity certificate of participation or subordinated interest in the SPEs. As the Company does not control the vehicles, its assets, liabilities and related results are not consolidated in the Company’s financial statements. Additionally, the Company securitizes certain credit card receivables related to users’ purchases through Brazilian SPEs. Under the SPE contracts, the Company has determined that it has the obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it retains subordinated interest in the SPEs. As the Company controls the vehicles, the assets, liabilities and related results are consolidated in its financial statements. The Company securitizes certain loans receivable through Brazilian, Argentine, Mexican and Chilean SPEs, formed to securitize loans receivable provided by the Company to its users or purchased from financial institutions that grant loans to the Company’s users through Mercado Pago. According to the SPE contracts, the Company has determined that it has both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant because it retains the equity certificates of participation and would therefore also be consolidated. When the Company controls the vehicle, it accounts for the securitization transactions as if they were secured financing and therefore the assets, liabilities and related results are consolidated in its financial statements. The following table summarizes the Company’s collateralized debt under securitization transactions, as of December 31, 2024: SPEs Collateralized debt (In millions) Interest rate Currency Maturity Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados $ 178 CDI + 2.50 % Brazilian Reais March 2027 Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado 16 CDI + 3.50 % Brazilian Reais August 2025 Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados 193 CDI + 2.35 % Brazilian Reais January 2030 Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados 65 CDI + 5.25 % Brazilian Reais July 2028 Seller Fundo De Investimento Em Direitos Creditórios 164 CDI + 1.60 % Brazilian Reais March 2026 Seller Fundo De Investimento Em Direitos Creditórios 82 CDI + 1.80 % Brazilian Reais May 2026 Seller Fundo De Investimento Em Direitos Creditórios 33 CDI + 1.40 % Brazilian Reais September 2026 Seller Fundo De Investimento Em Direitos Creditórios 16 CDI + 1.60 % Brazilian Reais November 2026 Seller II Fundo De Investimento Em Direitos Creditórios Segmento Meios De Pagamento De Rsponsabilidade Limitada 162 CDI + 0.85 % Brazilian Reais July 2027 Mercado Crédito Consumo XXXII 10 Badlar rates plus 200 basis points with a min 25 % and a max 80 % Argentine Pesos January 2025 Mercado Crédito Consumo XXXIII 23 Badlar rates plus 200 basis points with a min 5 % and a max 60 % Argentine Pesos March 2025 - April 2025 (1) Mercado Crédito Consumo XXXIV 20 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos April 2025 - July 2025 (1) Mercado Crédito Consumo XXXV 22 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos June 2025 - August 2025 (1) 134 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements SPEs Collateralized debt (In millions) Interest rate Currency Maturity Mercado Crédito XXI 1 Badlar rates plus 200 basis points with a min 45 % and a max 125 % Argentine Pesos January 2025 - March 2025 (1) Mercado Crédito XXII 4 Badlar rates plus 200 basis points with a min 15 % and a max 70 % Argentine Pesos March 2025 - April 2025 (1) Mercado Crédito XXIII 14 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos May 2025 - June 2025 (1) Mercado Crédito XXIV 13 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos June 2025 - August 2025 (1) Mercado Crédito XXV 29 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos July 2025 - August 2025 (1) Mercado Crédito XXVI 34 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos August 2025 - October 2025 (1) Mercado Crédito XXVII 31 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos August 2025 - October 2025 (1) Mercado Crédito XXVIII 30 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos September - November 2025 (1) Mercado Crédito XXIX 32 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos September - November 2025 (1) Mercado Crédito XXX 38 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos October - December 2025 (1) Mercado Crédito XXXI 43 Badlar rates plus 200 basis points with a min 15 % and a max 60 % Argentine Pesos October - December 2025 (1) Fideicomiso de administración y fuente de pago CIB/3756 202 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.35 % Mexican Pesos August 2026 Fideicomiso de administración y fuente de pago CIB/3369 29 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 7.0 % Mexican Pesos July 2027 Fideicomiso de administración y fuente de pago CIB/3369 219 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.8 % Mexican Pesos July 2027 Fideicomiso Irrevocable de Administración y Fuente de Pago número CIB/4372 129 The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.5 % Mexican Pesos August 2027 Frontal Trust Mercado Pago Créditos Fondo de Inversión 5 TAB 30 + 2.1 % Chilean Pesos November 2027 Frontal Trust Mercado Pago Créditos Fondo de Inversión 1 TAB 30 + 3.9 % Chilean Pesos November 2027 Frontal Trust Mercado Pago Créditos Fondo de Inversión 4 TAB 30 + 4.25 % Chilean Pesos November 2027 $ 1,842 (1) Minimum and maximum maturity depending on the applica ble interest rate within the range. This secured debt is issued by the SPEs and includes collateralized securities used to fund the Company’s Fintech business. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have recourse to the Company. Additionally, the cash flows generated by the SPEs are restricted to the payment of amounts due to third-party investors, but the Company retains the right to residual cash flows. 135 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The assets and liabilities of the SPEs through which the Company securitizes financial assets are included in the Company’s audited consolidated financial statements as of December 31, 2024 and 2023, as follows: December 31, 2024 2023 Assets (In millions) Current assets: Restricted cash and cash equivalents $ 492 $ 355 Credit card receivables and other means of payments, net — 105 Loans receivable, net of allowances 1,410 1,198 Other Assets 1 — Total current assets 1,903 1,658 Non-current assets: Long-term investments 12 23 Loans receivable, net of allowances 102 27 Total non-current assets 114 50 Total assets $ 2,017 $ 1,708 Liabilities Current liabilities: Accounts payable and accrued expenses $ 1 $ — Loans payable and other financial liabilities 610 693 Other liabilities 1 1 Total current liabilities 612 694 Non-current liabilities: Loans payable and other financial liabilities 1,232 782 Total non-current liabilities 1,232 782 Total liabilities $ 1,844 $ 1,476 136 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 22. LEASES The Company leases certain fulfillment, cross-docking and service centers, office space, aircraft, aircraft hangars, machines and vehicles in the various countries in which it operates. The lease agreements do not contain any residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to leases was as follows: December 31, 2024 2023 Operating Leases (In millions) Operating lease right-of-use assets $ 1,098 $ 899 Operating lease liabilities $ 1,135 $ 838 Finance Leases Property and equipment, at cost $ 208 $ 183 Accumulated depreciation ( 85 ) ( 50 ) Property and equipment, net $ 123 $ 133 Loans payable and other financial liabilities $ 122 $ 131 The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases as of December 31, 2024: December 31, 2024 2023 Weighted average remaining lease term Operating leases 8 Years 8 Years Finance leases 3 Years 3 Years Weighted average discount rate (1) Operating leases 10 % 9 % Finance leases 10 % 14 % (1) Includes discount rates of leases in local currency and U.S dollar. The components of lease expense were as follows: Year Ended December 31, 2024 2023 2022 (In millions) Operating lease cost $ 228 $ 173 $ 128 Finance lease cost: Depreciation of property and equipment 35 22 18 Interest on lease liabilities 15 13 8 Total finance lease cost $ 50 $ 35 $ 26 Variable lease cost (1) $ 25 $ 35 $ 17 (1) Variable lease payments are expensed as incurred and include charges such as flight hours above minimum, fuel, among others. 137 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Supplemental cash flow information related to leases was as follows: Year Ended December 31, 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: (In millions) Operating cash flows from operating leases $ 189 $ 168 $ 117 Financing cash flows from finance leases 51 33 20 The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by the Company’s incremental borrowing rates and internal rates of return to calculate the lease liabilities for the operating and finance leases, respectively: Year ending Operating Leases Finance Leases (In millions) One year or less $ 258 $ 49 One year to two years 236 42 Two years to three years 213 34 Three years to four years 197 15 Four years to five years 167 1 Thereafter 527 — Total lease payments 1,598 141 Less imputed interest ( 463 ) ( 19 ) Total $ 1,135 $ 122 NOTE 23. DERIVATIVE INSTRUMENTS Cash flow hedges As of December 31, 2024, the Company used foreign currency exchange contracts to hedge the foreign currency effects related to the forecasted purchase of MPOS devices in U.S. dollars owed by a Brazilian subsidiary whose functional currency is the Brazilian Real. The Company designated the foreign currency exchange contracts as cash flow hedges, the derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the “Cost of net revenues and financial expenses” line item, in the same period the forecasted transaction affects earnings. As of December 31, 2024, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into the consolidated statements of income within the next 12 months. In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its financial debt held by one of its Brazilian subsidiaries. The Company designated the swap contracts as cash flow hedges. The derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the Cost of net revenues and financial expenses line item within the next 12 months. As of December 31, 2024, there are no outstanding derivatives hedging the interest rate fluctuation of the financial debt designated as cash flow hedges. Fair value hedges The Company has entered into swap contracts to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt held by its Brazilian subsidiaries. The Company designated the swap contracts as fair value hedges. The derivatives’ gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial debt due to the hedged risks. Since the terms of the interest rate swaps match the terms of the hedged debts, changes in the fair value of the interest rate swaps are offset by changes in the fair value of the hedged debts attributable to changes in interest rates. Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debts is recorded at the floating rate. The Company also uses future contracts to hedge the interest rate exposure of its asset-backed loan portfolio originated in Brazil. In these cases, where the assets included in the portfolio share the same risk exposure, the Company designated the future contracts as fair value hedges under the portfolio layer method. The derivatives’ gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial assets due to the hedged risks. Accordingly, the Company will unlock its portfolio's fixed-rate to mitigate the effect of interest rate fluctuations. 138 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Net investment hedge The Company used cross currency swap contracts, to reduce the foreign currency exchange risk related to its investment in its Brazilian foreign subsidiaries and the interest rate risk. This derivative was designated as a net investment hedge and, accordingly, gains and losses are reported as a component of accumulated other comprehensive loss. The derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the Interest expense and other financial losses and “Foreign currency losses, net” line items, in the same period that the interest expense affects earnings. As of December 31, 2024, there are no outstanding derivatives hedging the interest rate fluctuation of the financial debt designated as cash flow hedges. Derivative instruments not designated as hedging instruments The Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S. dollars of certain of its Brazilian subsidiaries, whose functional currencies are the Brazilian Real. These transactions were not designated as hedges for accounting purposes. As of December 31, 2024, there are no outstanding derivatives hedging the foreign currency fluctuation not designated as hedging instruments. In addition, the Company entered into full cross currency swap contracts to hedge the interest rate fluctuation and foreign currency fluctuations of its financial debt nominated in U.S. dollars held by its Brazilian subsidiaries. These transactions were not designated as hedges for accounting purposes. As of December 31, 2024, there are no outstanding derivatives hedging the interest rate and foreign currency fluctuation not designated as hedging instruments. Finally, as of December 31, 2024, the Company entered into swap contracts to hedge the interest rate fluctuation of certain portion of its financial debt in its Brazilian subsidiaries and VIEs. These transactions were not designated as hedges for accounting purposes. The following table presents the notional amounts of the Company’s outstanding derivative instruments: Notional Amount as of December 31, 2024 2023 (In millions) Designated as hedging instrument Foreign exchange contracts $ 85 $ 91 Cross currency swap contracts 400 244 Future contracts 86 — Not designated as hedging instrument Foreign exchange contracts — 16 Interest rate swap contracts 103 245 139 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements Derivative instruments contracts The fair values of the Company’s outstanding derivative instruments as of December 31, 2024 and 2023 were as follows: Derivative Instruments Balance sheet location December 31, 2024 2023 (In millions) Foreign exchange contracts designated as cash flow hedges Other current assets $ 6 $ — Interest rate swap contracts not designated as hedging instruments Other current assets 9 — Cross currency swap contracts designated as fair value hedge Other current assets 23 1 Interest rate swap contracts not designated as hedging instruments Other non-current assets 20 22 Cross currency swap contracts designated as net investment hedge Other current liabilities — 6 Cross currency swap contracts designated as fair value hedge Other current liabilities 2 4 Interest rate swap contracts not designated as hedging instruments Other current liabilities 15 7 Foreign exchange contracts not designated as hedging instruments Other current liabilities — 1 Foreign exchange contracts designated as cash flow hedges Other current liabilities — 3 Interest rate swap contracts not designated as hedging instruments Other non-current liabilities 14 10 The effects of derivative contracts designated as hedging instruments on the consolidated statements of comprehensive income as of December 31, 2024 and 2023 were as follows: December 31, 2023 Amount of gain recognized in other comprehensive loss Amount of (gain) loss reclassified from accumulated other comprehensive loss December 31, 2024 (In millions) Foreign exchange contracts designated as cash flow hedges $ ( 4 ) $ 13 $ ( 4 ) $ 5 Cross currency swap contracts designated as net investment hedge ( 3 ) 2 1 — $ ( 7 ) $ 15 $ ( 3 ) $ 5 December 31, 2022 Amount of gain (loss) recognized in other comprehensive loss Amount of (gain) loss reclassified from accumulated other comprehensive loss December 31, 2023 (In millions) Foreign exchange contracts designated as cash flow hedges $ ( 2 ) $ ( 12 ) $ 10 $ ( 4 ) Interest swap contracts designated as cash flow hedges ( 2 ) 8 ( 6 ) — Cross currency swap contracts designated as net investment hedge ( 1 ) ( 9 ) 7 ( 3 ) $ ( 5 ) $ ( 13 ) $ 11 $ ( 7 ) The effect of the Company’s fair value hedge relationships over its fixed-rate financial debt on the consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 was a gain of $ 51 million, a loss of $ 19 million and a loss of less than $ 1 million, respectively, and affected Cost of net revenues and financial expenses and Foreign currency losses, net. The carrying amount of the hedged items for fair value hedges over its fixed-rate financial debt included in the “Loans payable and other financial liabilities” lines item of the consolidated balance sheets as of December 31, 2024 and 2023 are $ 401 million and $ 216 million, respectively. 140 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements The effect of the Company’s fair value hedge relationships over its fixed-rate financial debt on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of December 31, 2024 and 2023 are $ 2 million and $ 1 million, respectively. The effects of derivative contracts not designated as hedging instruments on the consolidated statements of income during the years ended December 31, 2024, 2023 and 2022 were as follows: Year Ended December 31, 2024 2023 2022 (In millions) Foreign exchange contracts not designated as hedging instruments recognized in Foreign currency losses, net $ — $ ( 11 ) $ ( 10 ) Currency swap contracts not designated as hedging instruments recognized in Foreign currency losses, net — — ( 29 ) Interest rate contracts not designated as hedging instruments recognized in Interest expense and other financial losses ( 12 ) 2 ( 7 ) $ ( 12 ) $ ( 9 ) $ ( 46 ) 141 | MercadoLibre, Inc. Table of Contents MercadoLibre, Inc. Notes to Consolidated Financial Statements NOTE 24. SHARE REPURCHASE PROGRAM On February 21, 2023, the Board authorized the Company to repurchase shares of the Company’s common stock, for an aggregate consideration of up to $ 900 million. The Company acquired shares of its own common stock in the Argentine market and pays for them in Argentine Pesos at a price that reflects the additional cost of accessing U.S. dollars through securities denominated in U.S. dollars, because of restrictions imposed by the Argentine government for buying U.S. dollars at the official exchange rate in Argentina (See Note 2 – Summary of significant accounting policies – Argentine currency status and macroeconomic outlook of these audited consolidated financial statements). As a result, the Company recognized foreign currency losses o f $ 386 million and $ 141 million for the years ended December 31, 2023 and 2022, respectively. The share repurchase program expired on March 31, 2024. During the year ended December 31, 2024, the Company did not acquire any shares under the aforementioned share repurchase program. 142 | MercadoLibre, Inc.