meli-20251231
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended December 31, 2025
OR
For the transition period from to
Commission file number 001-33647
______________________________________________________________________________________________________________
MercadoLibre, Inc.
(Exact name of registrant as specified in its charter)
______________________________________________________________________________________________________________
WTC Free Zone
Dr. Luis Bonavita 1294,Of. 1733, Tower II
Montevideo, Uruguay, 11300
(Address of principal executive offices) (Zip Code)
(+598) 2-927-2770
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value per share MELI Nasdaq Global Select Market
3.125% Notes due 2031 MELI31 The Nasdaq Stock Market LLC
4.900% Notes due 2033 MELI33 The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
______________________________________________________________________________________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer ☒ Accelerated Filer ☐
Non-Accelerated Filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the registrant’s Common Stock, $0.001 par value per share, at June 30, 2025, held by those persons deemed by the registrant to be non-affiliates (based upon the closing sale price of the Common Stock on the Nasdaq Global Select Market on June 30, 2025) was approximately $122,884,971,142. Shares of the registrant’s Common Stock held by each executive officer and director and by each entity or person that, to the registrant’s knowledge, owned 10% or more of the registrant’s outstanding common stock as of June 30, 2025 have been excluded from this number because these persons may be deemed affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of February 25, 2026, there were 50,697,182 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.
Documents Incorporated By Reference
Portions of the Company’s Definitive Proxy Statement relating to its 2026 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days of the Company’s fiscal year ended December 31, 2025, are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K as indicated herein.
Table of Contents
MERCADOLIBRE, INC.
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2025
Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 4
PART I
ITEM 1. BUSINESS 5
ITEM 1A. RISK FACTORS 17
ITEM 1B. UNRESOLVED STAFF COMMENTS 35
ITEM 1C. CYBERSECURITY 35
ITEM 2. PROPERTIES 37
ITEM 3. LEGAL PROCEEDINGS 37
ITEM 4. MINE SAFETY DISCLOSURES 37
PART II
ITEM 6. RESERVED 38
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 62
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 65
ITEM 9A. CONTROLS AND PROCEDURES 65
ITEM 9B. OTHER INFORMATION 66
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 66
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 66
ITEM 11. EXECUTIVE COMPENSATION 66
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 68
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 69
EXHIBIT INDEX 70
SIGNATURES 72
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Any statements made or implied in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and should be evaluated as such. The words “anticipate,” “believe,” “expect,” “intend,” “plan,” “estimate,” “target,” “project,” “should,” “may,” “could,” “will” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are contained throughout this report. Our forward-looking statements, and the risks and uncertainties related to them, include, but are not limited to, statements regarding MercadoLibre, Inc.'s expectations, objectives and progress against strategic priorities; initiatives and strategies related to our products and services, including our inability to successfully deliver new products and services; business and market outlook, opportunities, strategies and trends; impacts of foreign exchange; the potential impact of the uncertain macroeconomic and geopolitical environment on our financial results; customer preferences and demand and market expansion; our planned product and services releases and capabilities; industry growth rates; inflation; future stock repurchases; our expected tax rate and tax strategies; and the likelihood, impact and result of pending legal, administrative and tax proceedings or government investigations. Such forward-looking statements are subject to known and unknown risks, uncertainties and other important factors (in addition to those discussed elsewhere in this report) that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Some of the material risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described in “Item 1A—Risk Factors” in Part I of this report. You should read that information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report, as well as the factors discussed in the other reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”). We note such information for investors as permitted by the Private Securities Litigation Reform Act of 1995. There also may be other factors that we cannot anticipate or that are not described in this report, generally because they are unknown to us or we do not perceive them to be material that could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these forward-looking statements except as may be required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the SEC.
Many of these risks are beyond our ability to control or predict. New risk factors emerge from time to time and it is not possible for Management to predict all such risk factors, nor can it assess the impact of all such risk factors on our Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on our forward-looking statements. These statements are not guarantees of future performance.
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PART I
ITEM 1. BUSINESS
MercadoLibre, Inc. (together with its subsidiaries “us,” “we,” “our,” "MercadoLibre," or the “Company”) is the leading online commerce and fintech ecosystem in Latin America. Our e-commerce platform is the leader in the region based on gross merchandise volume (“GMV”), and our fintech platform is the leader in monthly active users (“MAUs”) among fintech companies in Argentina, Chile and Mexico, and the second largest in Brazil. Mercado Libre's e-commerce platform is present in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela (deconsolidated since December 2017), Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in 8 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador). Our ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online, and the processing of payments online and offline, as well as offering a wide array of simple day-to-day financial services.
We offer our users an ecosystem of integrated e-commerce and digital financial services, which includes: the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and the Mercado Libre Classifieds service.
Our e-commerce platform provides buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people where penetration of e-commerce over total retail significantly lags benchmarks such as the United States of America (“U.S.”), the United Kingdom (“U.K.”) and China. We believe that we offer world-class technological and commercial solutions that address the distinctive cultural and geographic challenges of operating a digital commerce platform in Latin America.
The Mercado Libre Marketplace is a user-friendly online commerce platform that can be accessed through our mobile app or website. Third-party sellers (“3P”) account for most of the GMV transacted on the Marketplace. We complement this by selling directly to consumers on a first-party basis (“1P”) in selected categories where we can enhance price competitiveness and assortment; this accounts for less than 10% of GMV. The Marketplace has an extensive assortment of products, with a wide range of categories including consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods. We also have a selection of international products available, primarily from sellers in China and the U.S., through our cross-border trade (“CBT”) operations. Our users can also list vehicles, properties and services they are looking to sell via Mercado Libre Classifieds. These listings differ from our Marketplace listings because we charge placing fees only, not final value fees.
Mercado Envios is a logistics solution that is one of the value-added services that we offer to our sellers and buyers on our platform. The logistics services we offer are an integral and crucial part of our value proposition as they reduce friction between buyers and sellers, allow us to have greater control over the full user experience and enable faster deliveries at a more competitive cost than would otherwise be available with third-party carriers. Sellers that use Mercado Envios are eligible to access shipping subsidies that enable free or discounted shipping for consumers that buy sellers’ goods on our Marketplace. Our logistics network is built around fulfillment centers (which accounts for more than half of shipments) where sellers place their inventory in our warehouses, and cross-docking, where we collect items sold from sellers directly or via a network of thousands of partner stores (“MELI Places”) where sellers drop off sold items that need to be fed into our logistics network. MELI Places are also enabled for pick up of items purchased and processing of returns. Our transportation network includes dedicated aircraft, trucks and thousands of last-mile delivery vans, the vast majority of which are owned and operated by our third-party carriers.
Our advertising platform, Mercado Ads, is another value-added service that we offer to sellers on our platform and brands both on- and off-platform. The platform enables sellers and brands to access the millions of consumers who browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate. This enables advertisers to target highly granular audiences. The products we offer are Product Ads (sponsored listings), Brands Ads (product carrousels), Display Ads (banners) and Video Ads, the last two of which we are able to offer inventory off-platform as well as on our own Marketplace and fintech platform.
Mercado Shops is a service we offer to sellers to complement their business on our Marketplace. It is a digital storefront solution that allows sellers to set up, manage and promote their own digital stores, whilst using Mercado Libre's logistics, advertising and payments services. In January 2025, we announced the migration of Mercado Shops to “Mi Página,” which offers similar functionalities but is fully embedded within our Marketplace (without an external storefront). Mercado Shops was discontinued as of December 31, 2025.
Mercado Pago was initially designed to facilitate transactions on Mercado Libre’s Marketplace by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments. This brought trust to the merchant-consumer relationship. In the countries in which Mercado Pago operates, it processes and settles all transactions on our Marketplace.
Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre’s Marketplace. We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America.
As we deployed our digitally-based payments solutions, we also observed that individuals and micro, small and medium-sized enterprises (“MSMEs”) in the physical world were being underserved or overlooked by incumbent payment providers and financial institutions in Latin America, and that a very large number of retail transactions were still being settled in cash throughout the region. Consequently, we deepened our fintech offering by launching payments processing services for offline merchants through the sale of point-of-sale (“POS”) devices and quick response (“QR”) codes.
Mercado Pago also offers an array of day-to-day financial services for consumers and merchants through our digital account. The digital account initially offered transfers and simple payments, but today the services offered are much broader.
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In our main markets, we currently offer the following solutions:
■Digital payment solutions for utilities, mobile phone top up, peer-to-peer payments and more through our digital account;
■Pre-paid cards and debit cards for users to spend and withdraw their account balances from their Mercado Pago digital account;
■Credit cards and merchant and consumer credits, both on and off the Mercado Libre Marketplace;
■Insurance products such as extended warranties, personal accident cover, theft and damage policies, among others;
■Savings and investment products to invest balances stored on Mercado Pago digital accounts; and
■A cryptocurrency buy, hold and sell feature of our digital account in Brazil, Mexico and Chile, for users to buy, hold and sell selected global cryptocurrencies and stablecoins, and Meli Dólar.
Our lending solution is available in Argentina, Brazil, Mexico and Chile. We offer loans mostly to merchants and consumers that already form part of our user base, many of whom have historically been underserved or overlooked by financial institutions and therefore suffer from a lack of access to credit. Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution. Our distribution capabilities and in-depth understanding of our customers’ behavior and merchants’ sales on the Mercado Libre Marketplace combined with machine learning (“ML”) (pillar of artificial intelligence (“AI”)) algorithms have allowed us to develop our own proprietary credit risk models with unique data that differentiate our scoring from traditional financial institutions. These models enable us to understand and better predict the behavior of our user and originate loans while maintaining acceptable levels of uncollectible debts.
We offer credit lines to merchants that sell on our Marketplace and merchants that use our online, POS and QR payments processing services. Because our online merchants’ business flows through Mercado Pago, we are able to collect principal and interest payments from their existing sales on Mercado Libre’s Marketplace, meaningfully reducing the risk of uncollectability on the loans we originate to our merchants.
Consumers can access credit lines once we score and approve them through our proprietary models. Loans can be used for a purchase on the Mercado Libre Marketplace, or on third party sites that use our payments processing technology. Since 2019, we also extend personal loans to recurring consumer credit borrowers, allowing them to buy products and services outside of our platform via the Mercado Pago digital account. In 2021, we launched the Mercado Pago credit card in Brazil, and this was followed by Mexico in 2023 and Argentina in 2025. It is free, internationally accepted, digitally managed and can be used on- and off-platform. Additionally, in Brazil we offer asset-backed loans to ease the acquisition of cars through financing granted to our users.
Our asset management product, which is available in Argentina, Brazil, Mexico and Chile, is a critical pillar of our financial services offering that enables us to compete with large banks. This product offers remuneration on balances held in the Mercado Pago digital account that is greater than traditional checking and savings accounts. This enables our users to earn a return with funds remaining available for withdrawal or to make payments without their funds being tied up in a time deposit. This product is another way in which we have innovated to promote financial inclusion in a region where there are many underbanked or unbanked consumers. In 2022, we launched savings products in Brazil that enable users to purchase certificates of deposit, which have a higher return than our basic asset management product. In partnership with a third party, we also launched three investment fund options in Brazil, which enable our users to diversify their investment portfolio in an accessible way and with options for quick withdrawal.
As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago account in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively. This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and offers the blockchain infrastructure platform. This feature is available for all users through their Mercado Pago account. In 2024 and 2025 we launched “Meli Dólar,” a stablecoin that is pegged to the US dollar, in Brazil, Mexico and Chile. Members of our loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without any fees.
In 2025, we launched the latest iteration of the Meli+ loyalty program in Argentina, Chile and Colombia, following its launch in Brazil and Mexico in 2024. The latest iteration introduces a tiered structure designed to provide users with a choice of benefits, which differ depending on the country. The Meli+ Essential tier includes ecosystem-wide benefits such as enhanced shipping options, cashback and additional installments on Marketplace purchases. The Meli+ Total tier includes all such benefits and also provides free access to Disney+, as well as discounts on other streaming platforms, such as HBO Max and Paramount+. In Brazil, we introduced a new subscription tier, Meli+ Mega, which consolidates multiple entertainment services into a unique single-subscription bundle, offering access to streaming platforms such as Netflix, Disney+, HBO Max and Apple TV+.
We continue to scale Mercado Play, an advertising-based video on demand (“AVOD”) streaming service first launched in 2023 and available to all users in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay. In 2025, Mercado Play previously available only through our apps, was made available on connected TVs for the first time. Mercado Play serves as a tool to drive user engagement on Mercado Libre and is a new platform to serve video advertising, complementing the portfolio of ads formats available through Mercado Ads. The content we offer through Mercado Play is sourced from third-party studios, with whom we have revenue sharing agreements.
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We have two distinctive revenue streams in our business:
■Commerce revenue
Our Commerce business is comprised of two primary revenue streams: Services and Product Sales. Our Services revenue stream is mainly generated from Marketplace fees that include final value fees, which include the use of the payment solution, and flat fees for certain transactions below a certain merchandise value, related shipping fees, net of third-party carrier costs when we act as an agent, and storage fees, classifieds fees, advertising sales fees, membership subscription fees and fees from other ancillary businesses. Our Product Sales revenue stream entails selling merchandise on a first-party basis from our own inventory and related shipping fees.
■Fintech revenue
Our Fintech business is comprised of three primary revenue streams: (a) Financial services and income, which includes revenues from commissions we charge for transactions off-platform derived from use of the payment solution and asset management product, offering installments, either when we finance transactions directly or when we sell 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, as well as Mercado Pago debit card commissions, and insurtech fees; (b) Credit Revenues, which includes revenues from interest earned on loans and advances granted to merchants and consumers, and interest and commissions earned on Mercado Pago credit card transactions; and (c) Fintech Product Sales, which includes revenues from sales of mobile point of sales devices.
Our strategy
Our main focus is to serve people in Latin America by enabling wider access to e-commerce, digital payments and financial services. By providing compelling technology-based solutions that democratize commerce and money, we contribute to the development of a large and growing digital economy in the region.
We serve our buyers by giving them access to a broad and affordable variety of products and services, a selection we believe to be larger than otherwise available to them via other online and offline sources serving our Latin American markets. We believe we serve our sellers by giving them access to a larger and more geographically diverse user base at a lower overall cost and investment than offline venues serving our Latin American markets. Additionally, we provide payment settlement services and shipping solutions to facilitate such transactions, and advertising solutions to promote them.
We also serve our users by making financial services more accessible through different credit and other financial products and by fostering entrepreneurship and social mobility, with the goal of creating significant value for our stakeholders.
More broadly, we strive to make inefficient markets more efficient through technology and in that process generate value for all our stakeholders.
To achieve these objectives, we intend to pursue the following strategies:
■Expand into additional transactional service offerings. Our strategic focus is to enable online transactions of multiple types of goods and services throughout Latin America. Consequently, we strive to launch online transactional offerings in new product and service categories where we believe business opportunities exist. These new transactional offerings include, but are not limited to: (a) offering additional product categories in our Marketplace, (b) bringing new brands to our Marketplace, (c) complementing our 3P selection with 1P goods in selected categories where we can enhance price competitiveness and assortment and (d) expanding our presence in vehicle, real estate and services classifieds.
■Continue to improve the shopping experience for our users. We intend to continually enhance our e-commerce ecosystem in order to better serve individuals, brands, retailers and other businesses that want to buy or sell goods and services online in a convenient, simple and safe way. Value-added services that we intend to continue to scale include, but are not limited to: (a) maximizing utilization of Mercado Envios, particularly our fulfillment services, (b) expanding our advertising offerings, both on- and off-platform, (c) maximizing the use of Mercado Pago as a means of payment in our Marketplace, and (d) scaling our loyalty program, MELI+. We are committed to continue investing in the development of new tools and technologies that facilitate web and mobile commerce on our platform. In line with our constant focus on innovation, a critical component of user experience is the vertical solutions that we offer across key categories. We will continue to focus on improving the functionality of our websites and apps to deliver a more efficient and safe shopping experience and providing our users with the help of a dedicated customer support department. We will continue to focus on increasing purchase frequency and transaction volumes from our existing users, as well as attracting new buyers to our platform. We believe that a significant portion of our growth will be derived from the development of these tools and technologies in the future.
■Become the principal financial services partner to our users. We intend to continue scaling Mercado Pago’s day-to-day financial services offerings for individuals and merchants through our digital account. Our strategic focus is to bring more users to Mercado Pago by leveraging our ecosystem, promoting financial inclusion and developing deep relationships with these users. We intend to promote the cross-selling of the products we offer, which include: (a) consumer & merchant loans, (b) credit and debit cards, (c) insurance, (d) savings, (e) investments, (f) digital payments, and (g) cryptocurrency buy, hold and sell. We are committed to developing new products to continue to offer innovative solutions to our users. We believe this strategy will help us maximize the utilization of Mercado Pago on our Marketplace and the value of Mercado Pago as a day-to-day financial services partner.
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■Overlay value-added services onto our payments processing products. We intend to enhance the value proposition of Mercado Pago’s payments processing solutions by adding value-added services for merchants. This includes, but is not limited to: (a) our digital account to manage their finances; (b) offering credit products to help merchants to scale their businesses, and (c) offering enterprise software solutions that help merchants to manage their businesses.
■Continue to grow our business and maintain market leadership. We focus on growing our business, achieving scale-related competitive advantages and strengthening our position as a preferred commerce and fintech platform in each of the markets in which we operate. We also intend to grow our business and maintain our leadership by expanding our user base as we reduce the frictions of buying online in Latin America. We intend to achieve these goals through organic growth, by introducing our services in new countries and entering new category segments, by launching new transactional business lines, and through potential strategic acquisitions of key businesses and assets.
■Increase monetization of our transactions. We focus on improving the revenue generation capacity of our business by implementing initiatives designed to maximize the revenues we generate from transactions on our platform. Some of these initiatives include increasing our fee structure, selling advertising on our platform, offering other e-commerce services, expanding our fee-based features and cross-selling financial services to individuals transacting on our Marketplace and merchants who use our payments processing services.
■Take advantage of the natural synergies that exist among our services. We strive to leverage our various services to promote greater cross-usage and synergies, thereby creating a fully integrated ecosystem of e-commerce and fintech offerings. Consequently, we will continue to promote the adoption of our Mercado Envios logistics solution, our advertising solution, our Mercado Pago payments and financial services solution and reward our users in each country for increased usage and engagement. Our loyalty program is a key tool for us to achieve these synergies and to foster growth of ecosystemic users, who are those that transact on our Marketplace and use Mercado Pago regularly.
Marketing
Our marketing strategy is designed to grow our e-commerce and fintech platforms, attract new users and promote more frequent transactions. We are focused on being an acquisition and engagement engine with effective and efficient allocation of resources. We focus on cross-selling services to create a larger number of ecosystemic users, with whom we have the deepest relationships. We leverage all advertising vehicles, including mass offline networks, paid advertising, including search, shopping, social and affiliate programs, organic channels, and our own channels (email, push, real estate). As we work on diverse marketing efforts, we consistently focus on reducing dependency on paid channels by pursuing brand preference leadership in Latin America and becoming a trusted authority in the industry, which helps us build a loyal base of users. We believe in local relevance to create a unique positioning in our top markets and promote a clear, differentiated brand voice. During 2025, we strengthened our buyer acquisition and demand generation efforts with multiple initiatives that helped us to increase the usage of our ecosystem. We focused not only on peak season (Hot Sale, Black Friday) and gifting events (such as Christmas, Mother's Day), but also on creating new shopping occasions during low season by promoting new seasonal dates called “double dates.”
Product Development and Technology
On December 31, 2025, we had 20,347 employees on our information technology and product development staff, an increase of 11% from 18,282 employees on December 31, 2024, due to new hires and as a consequence of improvements in our ecosystem products, which increased our information technology and product development staff.
We continually work to improve both our Mercado Libre Marketplace and Mercado Pago mobile apps and websites so that they better serve our users’ needs and function more efficiently. A significant portion of our information technology resources are allocated to these purposes. We strive to maintain the right balance between offering new features and enhancing the existing functionality and architecture of our software and hardware.
The effective management of the Mercado Libre Marketplace and Mercado Pago software architecture and hardware requirements is as important as introducing additional and better features for our users. Because our business has grown relatively fast, we must ensure that our systems are capable of absorbing this incremental volume. Therefore, our engineers work to optimize our processes and equipment by designing more effective ways to run our platform.
We design, develop, and operate most of our software and technology in-house. We have several development centers throughout Latin America. We believe having a team as diverse as our user base gives us a distinct advantage when building products for markets as unique as the ones where we operate. Different languages and cultures require different features and products, and our multi-disciplinary development team can draw from both data and their own culture for insights when designing, implementing, and releasing products.
We have made acquisitions in the past to enhance our software development capabilities, and we outsource certain projects to outside developers. We believe that outsourcing the development of certain projects allows us to have a greater operating capacity and strengthens our internal know-how by incorporating new expertise into our business. In addition, our developers frequently interact with technology suppliers and attend technology-related events to familiarize themselves with the latest innovations and developments in the field. We also rely on certain technologies that we license from third parties, suppliers of key database technology, operating systems and specific hardware components for our services.
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In the past, we started a deep technology overhaul to switch from a closed and monolithic system to an open and decoupled one. We split our teams into many decoupled and autonomous “cells.” A cell is a functional unit with its own team, hardware, data and source code. Cells interact with each other using Application Programming Interfaces (“APIs”). This successful overhaul allowed us to unlock greater developer productivity from all our teams. In the past, we opened up our platform to allow third parties to integrate the various features of our platform into custom applications. Since then, we have seen significant adoption of our platform and entire companies built on and around our APIs and services, all of them focused on adding even more value to our users.
During this overhaul, we built a proprietary Platform as a Service (“PAAS”) product used daily by our development team. This state-of-the-art tool helps our teams by greatly reducing cognitive overload related to infrastructure and network management, allowing our developers to focus on adding value to our users and their code, and not which server their applications are running on. Our PAAS is a constant area of investment which we have expanded from microservices to simplifying the building of mobile applications, software development kits (“SDKs”) and building, testing, training, deploying and monitoring predictive Machine Learning models, all with the purpose of increasing the rate of development and, by extension, the pace and cadence with which all our teams add value to our users.
Generative AI (“GenAI”) adoption at MercadoLibre has continued to expand across the organization. Approximately 95% of our employees have adopted GenAI tools in their work. Internal measurements show that about 30% of the code that reaches production is written with the use of AI. This blended figure reflects differences across our portfolio, where mature, large-scale systems and newer environments show varying levels of AI-generated code. All code written with AI is incorporated through our established development, review, and release processes. During the year, we also observed an approximately 40% increase in merged contributions, which we believe reflects improvements in development velocity and ongoing enhancements to our development processes.
We also use autonomous AI agents to support portions of our engineering work. These agents perform defined tasks such as contributing to code reviews, assisting with documentation, reviewing incidents, and handling certain migration and update activities across parts of our codebase. They operate as part of our broader development workflow and complement the work of our engineering teams.
In addition, the use of internal workflow-automation tools has expanded across the Company. These tools help coordinate recurring operational processes, streamline multi-step tasks, and reduce manual work across business units. Adoption of such tools has continued to grow as our teams incorporate automation into a wider range of day-to-day responsibilities, supporting greater efficiency and consistency in routine operations.
Seasonality
Like most retail businesses, we experience the effects of seasonality in all of the countries in which we operate throughout the calendar year. Although much of our seasonality is due to the year-end promotional campaigns and the Christmas holiday season, the geographic diversity of our operations (i.e. southern and northern hemispheres) helps mitigate the seasonality attributed to summer vacation time and national holidays.
Typically, the fourth quarter of the year is the strongest in terms of revenue in every country where we operate due to the significant increase in transactions before the holiday season. The first quarter of the year is generally our slowest period. The months of January, February and March correspond to summer vacation time in Argentina, Brazil, Chile, Peru and Uruguay. Additionally, the Easter holiday falls in March or April, and Brazil celebrates Carnival for one week in February or March. This first quarter seasonality is partially mitigated by our operations in the countries located in the northern hemisphere, such as Colombia and Mexico, the slowest months for which are the summer months of July, August and September. Lastly, commercial campaigns like Hot Sale, CyberMonday, Black Friday and Buen Fin generate an increase in transactions.
Competition
The online commerce market is rapidly evolving and is highly competitive. Barriers-to-entry for large, well-established technology companies are relatively low, and current and new competitors can launch new sites at a relatively low cost using commercially available software. While we are currently the market leader in a number of the markets in which we operate, we currently or potentially could compete with marketplace operators, businesses that offer business-to-consumer online e-commerce services or others with a focus on specific vertical categories, as well as brick and mortar retailers that have launched online offerings. Over the past few years, we have seen competition intensify not only as local players grow their e-commerce businesses, but also as international players expand, mainly in Brazil and Mexico.
The financial services market is also becoming increasingly competitive with the growth of several fintech companies established in Latin America. With respect to our payments’ business, Mercado Pago competes with existing digital and offline payment methods, including banks and other providers of traditional payment methods that service both merchants and individuals. Mercado Pago also competes in the rapidly evolving fintech space with local and strong global players that offer digital financial services such as access to credit, virtual and physical cards, insurance, savings accounts, and asset management.
The advertising market in Latin America is dominated by large, global companies that are able to deploy solutions and technology from their home markets and international operations into the region. These companies are able to offer advertisers access to large audiences, and the competition to serve those audiences is intense. We also compete against a range of local players in the traditional media space, as well as bricks and mortar retailers who can provide advertisers with access to physical and online inventory.
In the classifieds market, we compete with regional and local players with general or verticalized focus. In addition, we face competition from a number of large online communities and services that have expertise in developing e-commerce, facilitating online interaction, or both. Other large companies with strong brand recognition and experience in e-commerce, such as large newspapers or media companies, also compete in the online listing market in Latin America.
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Intellectual Property Rights
Our intellectual property ("IP") rights are critical to our future success and rely on a combination of copyright, trademark, patent designs, trade secret laws and contractual restrictions, among others.
We pursue the registration of our intangible assets in each country where we operate. Our main trademarks and domain names are duly protected in the countries where we have our main operations, however, we may not have effective protection or it might not be granted to us by the appropriate regulatory authority in every country where our services are available online, meaning our ability to protect our brands against third-party infringement would be compromised and we could face claims by third-party trademark owners. See “Item 1A. Risk factors—Intellectual Property Risks—We could face legal and financial liability upon the sale of items that infringe intellectual property rights of third parties and for information and material disseminated through our platforms.”
We have entered into confidentiality and intellectual property assignment agreements with our employees and certain contractors. To prevent disclosure of our proprietary information to unauthorized parties, we have also entered into non-disclosure agreements with our employees, strategic partners and suppliers.
We have licensed certain proprietary rights, such as trademarks or copyrights, to third parties in the past and expect to continue to license such rights in the future. While we seek to ensure that our licensees maintain the quality of the Mercado Libre brand, they may take actions that could adversely affect the value of our proprietary rights or our reputation, which could have a material adverse effect on our business, results of operations and financial condition. See “Item 1A. Risk factors—Intellectual Property Risks—We may not be able to adequately protect and enforce our intellectual property rights. We could potentially face claims alleging that our technologies infringe the property rights of others.”
Offices
We are a Delaware corporation incorporated on October 15, 1999. Our registered office is located at 800 North State Street, Suite 304, Kent County, Dover, Delaware, 19901. Our principal executive offices are located at Dr. Luis Bonavita 1294, Of. 1733, Tower II, Montevideo, Uruguay, 11300.
Available Information
Our investor relations website is investor.mercadolibre.com. We use our investor relations website as a means of disclosing material, non-public information and for complying with our disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls and webcasts. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our country-specific Impact Reports for Brazil, Mexico and Argentina are available on our investor relations website. Our Corporate Governance Guidelines, Code of Ethics, and the charters of the Audit Committee, the Compensation and the Nominating and Corporate Governance Committee are also available on our website and are available in print to any stockholder upon request in writing to MercadoLibre, Inc., Attention: Investor Relations, Dr. Luis Bonavita 1294, Of. 1733, Tower II, Montevideo, Uruguay, 11300. Information on or connected to our website is neither part of nor incorporated into this report on Form 10-K or any other SEC filings we make from time to time.
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Human Capital
Employees and Labor Relations
The following table shows the number of our employees by country as of December 31, 2025:
Country Number of Employees
United States 27
Venezuela 25
Ecuador 7
China 6
We manage operations in the remaining countries in which we have operations remotely.
Some of our employees located in Brazil, Argentina, Mexico, Uruguay and Chile are represented by different labor unions.
We consider our relations with our employees to be good and we implement a variety of human resources practices, programs and policies that are designed to hire, develop, compensate and retain our employees.
Culture and Development
Our entrepreneurial culture is the most significant attribute that makes MercadoLibre a unique place to work. This characteristic, which dates back to our early days in a garage in Buenos Aires, continues to thrive among the more than 123,000 talented individuals who comprise our exceptional team across Latin America.
The DNA of MercadoLibre, embedded in our culture, is best exemplified by a proactive attitude: a relentless commitment to creating value for our users through risk-taking and innovation, all while delivering excellence as a collective.
Throughout the years, our culture has been instrumental in shaping our Company’s dynamic and successful journey, serving as a competitive advantage and a crucial differentiator.
Our leadership team plays a central role in exemplifying our culture. One of our Leadership principles is to “Lead by Example.” We expect our leaders to be the first to give their all, to inspire enthusiasm, and, above all, to embody our culture and DNA through their actions. In the past year, we have trained over 3,150 leaders to serve as multipliers of our DNA. This initiative included 120 training sessions focused on enhancing the impact of our leaders, emphasizing the importance of overcoming challenges, embodying a proactive attitude and delivering effective feedback. We are thrilled with the positive outcomes this initiative has generated, not only for the participants and their teams but also for the overall business results.
This year, as in every year, we measured the levels of employee engagement, receiving responses from more than 81,000 employees, and we achieved a remarkable 93% favorability. This milestone is particularly significant as we recognize that managing team engagement is an indispensable responsibility of our leaders. In addition, during 2025 our “Leading Operations” program trained more than 2,600 leaders to strengthen management within our logistics operations. This initiative has boosted productivity and supported our goal of expanding our logistics network to every home in Latin America.
To thrive in the diverse markets we serve, attracting, engaging and developing top talent is paramount. At MercadoLibre, we achieve this by providing meaningful experiences and co-creating an environment that reflects our DNA. In a fast-paced, dynamic, joyful and collaborative workplace, we give our teams the chance to grow by tackling complex challenges, pursuing excellence and achieving outstanding results together.
Our purpose is to democratize commerce and financial services to transform the lives of millions across Latin America. Every action we take as a company is anchored in this purpose, with our culture guiding and inspiring each decision we make and every initiative we launch.
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Generation of quality employment opportunities
Our recruitment and hiring strategy exemplifies our commitment to being a growth engine for Latin America in response to the socio-economic challenges faced by the region in recent years. We take immense pride in creating quality employment opportunities in the region. This year, we celebrated a remarkable achievement by surpassing 123,000 employees at MercadoLibre. In 2025 alone, we welcomed more than 39,000 new team members throughout the region, particularly within our Technology, Product, and Logistics divisions. We have shown consistent expansion, almost quadrupling our workforce from 29,957 to 123,670 employees in the last four years, resulting in 37 times the workforce we had a decade ago.
This substantial growth distinguishes us as a leader in creating genuine employment in the region while maintaining our unique culture. Our ongoing expansion not only strengthens our position in job creation but also enhances our value proposition. The increase in direct employment drives our business forward and positively impacts indirect employment, generating numerous opportunities throughout our value chain and benefiting the hundreds of thousands of MSMEs that rely on our ecosystem.
At MercadoLibre, we aspire to be the employer of choice, fully aware of the competitive landscape we navigate where effective talent management is crucial. Therefore, we are committed to honoring the value proposition we offer our employees every single day.
Multiple perspectives, common purpose
We believe in effort and the value of meritocracy, and we know that the inclusion of diverse experiences drives innovation and allows us to anticipate the needs and expectations of those who choose MercadoLibre. To achieve this, we work on two complementary pillars: inclusion, through processes and actions that ensure equal opportunities within a culture that fundamentally values meritocracy; and representation, promoting the inclusion of different profiles and experiences, thus reflecting the diversity of our user community.
We ensure pay equity by conducting annual company-wide analyses, and there is no representative gap in any talent management processes, such as performance evaluations, promotions, internal rotations and employee engagement. Our priority is to guarantee an inclusive and respectful environment. In 2024, we created the Inclusion Insights Team, an intersectional team whose mission is to ensure that our initiatives and processes are inclusive and incorporate a multiplicity of perspectives and experiences, creating a great place to work for all people. The group is led by the Inclusion team and consists of 13 representatives from different groups (women, men, employees over 40, people with disabilities, different ethnicities, LGBTQI+, etc.), ensuring a balance across countries, tenure, seniority, and considering performance and cultural alignment.
We drive our business purpose by democratizing opportunities, understanding, and respecting each uniqueness. Any violation of our MELI Code must be reported, and we maintain a confidential reporting line available 24/7 for anonymous reporting.
AI-Driven Innovation at MercadoLibre
MercadoLibre is experiencing a new phase in its evolution where the transformative power of technology, specifically AI, challenges the Company to evolve its ways of working. To be prepared, MercadoLibre chooses to learn constantly, remaining in continuous beta, test, and iterate.
Based on MercadoLibre's DNA, the Company chooses not to simply “adapt,” but to anticipate and lead the transformation. The capacity and speed of learning are key at the Company. Our vision for GenAI is that everyone at the Company can use it to boost their productivity and accelerate business impact. To solve the various challenges in our operations, MercadoLibre has numerous proprietary AI solutions, and our teams are much more efficient today. We are using AI to assist our employees in the production of TV commercials, handling of customer service cases, and response to legal demands.
Beyond these specific applications, MercadoLibre is transforming its ways of working by incorporating AI into daily operations. MercadoLibre has made world-class GenAI tools available to the entire team, accelerating tasks across all roles through content creation assistants (like Gemini) and coding assistants (like GitHub Copilot), as well as proprietary decision automation agents (Verdi). To drive usage, the Company has trained over 23,000 people, including leaders and developers, on solving business challenges with AI tools, prompting, and coding. MercadoLibre also reinforces the importance of GenAI use through leadership messaging and internal “GenAI Weeks“ across business units to share practical applications. Approximately 95% of the Company’s employees have adopted AI tools in their work. This metric is more than 50% above industry benchmarks. Moreover, AI is also used as a co-pilot in the Human Capital area, specifically being used for talent identification, evaluation and engagement.
In Talent Acquisition, the Company has long used AI to assist with efficient candidate-position matching and ranking. MercadoLibre is now experimenting internally with autonomous agents for initial candidate phone-screening while ensuring that human interviews remain central to the hiring process. For Employee Support, a proprietary GenAI conversational bot handles over 1.4 million annual inquiries, increasing the self-service rate from 70% to 93%. Furthermore, in Talent Evaluation, AI assists leaders by summarizing 360° feedback and helping to prepare performance reviews. Also, in the engagement annual survey, the Company uses models like Humor Sense to automatically analyze survey content and provides leaders with an intelligent assistant that integrates results, highlights key insights, and offers recommendations for action plans.
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Government Regulation
We are subject to a variety of laws, decrees and regulations that affect companies conducting business on the Internet in some of the countries where we operate related to e-commerce, fintech, privacy, data protection, taxation, obligations to provide information to certain authorities about transactions occurring on our platform or about our users, anti-money laundering regulations, transport regulations and other legislation which also applies to other companies conducting business in general. It is not clear how existing laws governing issues such as general commercial activities, property ownership, copyrights and other intellectual property issues, taxation, libel and defamation, obscenity, consumer protection, digital signatures and personal privacy apply to online businesses. Some of these laws were adopted before the Internet was available and, as a result, do not contemplate or address the unique issues of the Internet. Due to these areas of legal uncertainty, and the user’s adoption of the Internet and other online services, it is possible that new laws and regulations will be adopted with respect to the Internet or other online services. These regulations could cover a wide variety of issues, including, without limitation, online commerce, Internet service providers’ responsibility for third party content hosted in their servers, user privacy, fintech transactions, freedom of expression, pricing, content and quality of products and services, taxation (including VAT or tax collection obligations, obligation to provide certain information about transactions that occurred through our platform, or about our users), advertising, intellectual property rights, consumer protection and information security.
There are laws and regulations that address foreign currency and exchange rates in every country in which we operate. In certain countries where we operate, we need governmental authorization to pay invoices to a foreign supplier or send money abroad due to foreign exchange restrictions. See “Item 1A. Risk factors—Risks related to doing business in Latin America—Local currencies used in the conduct of our business are subject to depreciation, volatility and exchange controls"” for more information.
We are also subject to significant general data protection and privacy-related regulations in many of the jurisdictions in which we operate (e.g. Law No. 13,709 in Brazil, Law No. 25,326 in Argentina, Federal Law on the Protection of Personal Data on Private Sector Possession in Mexico, Laws No. 1581/2012 and 1266/2008 in Colombia, Law No. 21.719 in Chile, Law No. 18,331 in Uruguay, Organic Law on Personal Data Protection in Ecuador, Law No. 29,733 in Peru, Personal Information Protection Law in China as well as various state-level privacy laws in the United States. These laws broadly govern the collection, use, processing, storage and transfer of personal data across both digital and physical environments. We have implemented a data protection program designed to incorporate applicable requirements into our business processes, compliance infrastructure and IT systems. Further, many jurisdictions continue to review, amend or propose additional obligations, which may require further operational or technical adjustments. Failure, or perceived failure, to comply with these evolving laws could result in regulatory investigations, fines, litigation, reputational harm, or operational restrictions.
Our Mercado Pago services are subject to regulation in the countries in which we operate, as described below:
Brazil
Mercado Pago's activities in Brazil operate under a regulatory framework consolidated by Law No. 12,865/2013, which defines the concepts of payment arrangements and payment institutions and vested the Brazilian Central Bank ("BACEN"), following guidelines set by the National Monetary Council ("CMN"), with authority to regulate and supervise the sector.
Based on that law, the BACEN Resolution 80/2021 governs the formation, operation, authorization, governance, and prudential requirements of payment institutions ("PIs") in the following modalities: electronic money issuer, postpaid instrument issuer, acquirer (merchant acquirer), and payment transaction initiator. As an authorized electronic money issuer since 2018, Mercado Pago Instituição de Pagamento Ltda. offers payment accounts with client funds segregated from its own assets and fully backed by federal government securities in the Special Settlement and Custody System ("SELIC"), ensuring redemption at any time and ring-fencing against the institution’s obligations (BACEN Resolution 80/2021). On March 11, 2020, the BACEN also approved its activities as an acquirer (merchant acquirer) and postpaid instrument issuer (credit cards), and subsequently as a payment transaction initiator, expanding the scope of services.
At the arrangement level, the BACEN Resolution 150/2021 establishes the regulatory regime applicable to payment arrangements that are part of the Brazilian Payments System ("SPB") and defines when an arrangement is not part of the SPB. Mercado Pago participates in regulated arrangements such as Pix (the Brazilian instant payments system), card network arrangements, and maintains its own payment arrangement, complying with the applicable reporting obligations (BACEN Resolution 150/2021). We have also been part of Open Finance since 2021, sharing data with the account holder’s consent, in accordance with the BACEN’s timeline and technical standards.
During March 2022, the BACEN announced new rules for PIs 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, extended the application of the rule regarding proportionality of regulatory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by PIs. The rules required a gradual increase between 2023 and 2025 in the regulatory capital requirements applicable to our regulated Brazilian entities which from January 2025 onwards is 10.50%.
In September 2024, the Brazilian Mercado Pago's entities received the BACEN authorization to establish its own Distribuidora de Títulos e Valores Mobiliários ("DTVM"), which became operational in 2025, strengthening the investment's offering. Credit operations within the ecosystem are conducted by Mercado Crédito Sociedade de Crédito, Financiamento e Investimento S.A., a financial institution authorized by the BACEN since 2020.
On cross-cutting matters, the Brazilian Mercado Pago's entities comply with: (i) the anti–money laundering and counter–terrorism financing regime (Law No. 9,613/1998, amended by Law No. 12,683/2012, and the BACEN regulations); (ii) the centralized receivables registry; (iii) cybersecurity and cloud outsourcing policies and controls applicable to PIs; (iv) the General Data Protection Law ("LGPD") and acts of the National Data Protection Authority ("ANPD"); and (v) rules for sharing data on indications of fraud among authorized institutions, pursuant to Joint Resolution 6/2023 and the BACEN Resolution 343/2023 (electronic registry, timelines, and security requirements).
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For postpaid credit, since January 2, 2024, a cap has been in force for credit card revolving balances and invoice installment plans: interest and financial charges may not exceed 100% of the original debt amount, pursuant to Article 28 of Law No. 14,690/2023 and the CMN Resolution 5,112/2023, which details the calculation of the “original amount,” invoice disclosures, and balance portability. In 2024, Law No. 14,905 (the updated “Usury Law”) amended the Civil Code and Decree No. 22,626/1933 to (a) standardize monetary restatement and the legal interest rate; and (b) exclude the application of the old interest cap to transactions contracted with institutions authorized by the BACEN (among other hypotheses), so that such transactions are not subject to the limit previously imposed by the 1933 Decree, without prejudice to other legal and consumer protection safeguards.
On November 3, 2025, the CMN and the BACEN issued Joint Resolution 14/2025 and the BACEN Resolution 517/2025, which overhaul the calculation of minimum paid-in capital and net equity required of authorized institutions, including PIs, Direct Credit Societies ("SCDs"), and Credit, Financing and Investment Societies ("SCFIs"). The requirement is no longer “by type” and now reflects the activities actually undertaken, the use of intensive technological infrastructure, and the funding profile, with transition rules through 2028. The Brazilian Mercado Pago's entities have been implementing the necessary adjustments, maintaining capital buffers and alignment with the prudential benchmarks applicable to PI-led conglomerates. Additionally, since December 1, 2025, BACEN Resolution 518/2025 has been in force, broadening the grounds for compulsory closure of payment accounts to curb improper uses, detailing the characterization and closure of “contas-bolsão,” serious registration inconsistencies, and the movement of third-party funds through own accounts, and requiring formal identification criteria and documentation retention at the BACEN’s disposal.
Mercado Pago entities in Brazil remain under BACEN supervision, as well as that of the Securities and Exchange Commission of Brazil ("CVM") due to the DTVM license, and fully comply with regulatory obligations with the knowledge that noncompliance may result in measures ranging from warnings and administrative sanctions to the cancellation of authorizations.
Mexico
In March 2018, Mexico enacted a new law that regulates both crowd-funders as well as providers of wallets and money transmittal services (the “Fintech Law”). Under the Fintech Law, institutions that provided the aforementioned services prior to its enactment are required to submit an application to the Comisión Nacional Bancaria y de Valores (the Mexican National Banking and Securities Commission or the “CNBV”) to obtain a license, and may continue to provide those services while such license application is being processed.
On April 29, 2022, MercadoLibre, S.A. de C.V. Institución de Fondos de Pago Electrónico, a Mexican subsidiary, obtained the final approval by the CNBV to operate as an Electronic Payment Institution (Institución de Fondos de Pago Electrónico or “IFPE”, as referred to by the Financial Technology Institutions Act), which enables the entity to issue, manage, redeem and make electronic transfers of money on behalf of its clients, through computer applications, interfaces, web sites or any other means of electronic or digital communication.
MercadoLibre, S.A. de C.V. Institución de Fondos de Pago Electrónico became a regulated financial entity towards third parties, effective on May 11, 2022 duly published in the Official Gazette, and is subject to the supervision and jurisdiction of the relevant Mexican financial regulators, including but not limited to the National Commission for the Protection and Defense of Users of Financial Services, CNBV and the Central Bank of Mexico. Amongst the regulatory obligations to which Electronic Payment Institutions are subject, the following are noteworthy: a) maintain minimum capital requirements, b) maintain sufficient reserves in high-quality liquid assets (e.g. cash, treasury bills, etc.), so as to be able to redeem, on par, the funds held on behalf of the clients, c) comply with anti-money laundering and countering of terrorism financing regulations, and d) develop and maintain sound cybersecurity and information security policies, including but not limited to the performance of recurrent vulnerability tests and the deployment of strict infrastructure controls. Additionally, in February 2022, the National Insurance and Bond Commission granted Mercado Insurtech, Agente de Seguros, S.A. de C.V. definitive authorization to operate as an Insurance Agent.
On September 11, 2024, MercadoLibre, S.A., de C.V., Institución de Fondos de Pago Electrónico submitted to the CNBV an authorization request to organize and operate as a multiple banking institution. As of the date of this filing, the aforementioned authorization is still pending approval.
On March 27, 2025, MPFS, S. de R.L. de C.V. submitted to the CNBV an authorization request to organize and operate as an investment funds management company through Mercado Pago Fondos, S.A. de C.V., Sociedad Operadora de Fondos de Inversión (a new subsidiary to be legally formed when the authorization request is approved). As of the date of this filing, this authorization is pending approval.
Argentina
In January 2020, the Central Bank of Argentina (“CBA”) enacted regulations relating to payments service providers that apply to the Fintech institutions that are not financial institutions but nevertheless, provide payment services in at least one of the stages of the payment system. On July 7, 2020, MercadoLibre S.R.L. was registered with the CBA as a payment service provider in accordance with applicable regulations, and since December 18, 2020 has also been registered as a “Proveedor No Financiero de Crédito” (non-financial loan provider).
In September 2021, MercadoLibre S.R.L. completed the registration process with the National Insurance Superintendent to operate as appointed agent for insurance companies (“agente institorio”), which allows MercadoLibre S.R.L. to offer its users insurance policies sold by one or more insurance companies, as well as to manage certain aspects of such policies (payments, claims, etc.).
On September 1, 2022, the CBA issued a regulation that extended the application of the rules for the protection of users of financial services to payment services providers who offer payment accounts (“PSPOCP” according to its Spanish acronym). The regulation was already applicable to non-financial loan providers. On February 15, 2023, the CBA issued another regulation requiring PSPOCPs to comply with the Information Regime on Claims and the Information Regime on Transparency, Chapter II.
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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 June 4, 2024, Mercado Pago Inversiones S.R.L. ("MPY") and Mercado Pago Asset Management S.A. ("MPA") were established. After its registration in the General Inspection of Justice, these subsidiaries requested a Comprehensive Settlement and Clearing Agent license and a Product Administration Agent of Collective Investment - Common Investment Funds license, respectively, from the Argentinian National Securities Commission (“CNV” according to its Spanish acronym), which were authorized on February 5, 2025.
On February 25, 2025, the CNV approved the registration of MPY as a Comprehensive Investment Fund Placement and Distribution Agent (ACDI). On the same day, the CNV approved the request made by MPA to replace Industrial Asset Management S.A. as management agent of “Mercado Fondo.” As of December 31, 2025, the assets under administration of MPA related to mutual funds amount to 4,536 million.
In April 2025, Mercado Pago Servicios de Procesamiento S.R.L. (“MPSP”) created a global program for the issuance of debt securities. The maximum principal amount of the debt securities permitted to be outstanding at any one time under the program is $500 million (or its equivalent in other currencies and/or units of value or measure). In July 2025, MPSP was authorized by the CNV to issue debt securities under Argentina's public offering regime, and as result, it is regulated by the CNV.
On June 17, 2025, we filed an application with the CBA to obtain a banking license in Argentina for a new entity to be incorporated, which will be controlled by the subsidiaries Meli Participaciones, S.L. and Marketplace Investments, LLC. As of the date of this filing, the application is currently under review.
Chile
In 2017 and 2018, Chile enacted regulations regarding the issuance and operation of payment cards, which could affect Mercado Pago’s operations, including authorization to operate, anti-money laundering obligations, capital requirements and reserve funds, operational and security safeguards, among others.
In November 2021, the Chilean Commission for the Financial Market (“CMF”) granted Mercado Pago, through its entities Mercado Pago Emisora S.A. and Mercado Pago Operadora S.A. (formerly known as MercadoPago S.A.), a prepaid card issuer license and payment card operator license, respectively. These licenses transformed Mercado Pago Emisora S.A. and Mercado Pago Operadora S.A. into regulated entities, supervised by the CMF and the Chilean Financial Analysis Unit (“UAF”, in charge of supervising anti-money laundering activities in Chile), and became obligated, among other things, to: (i) deliver information on its financial and operational management on a regular basis; (ii) maintain certain minimum capital required; (iii) set up a determined liquidity reserve; (iv) deposit and maintain users’ funds in specific banks’ accounts (only applicable to Mercado Pago Emisora S.A.); and (v) perform know your client and anti-money laundering duties.
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 CMF within the legal deadline for its ruling, which is still pending approval.
On October 24, 2022, Mercado Pago Corredores de Seguros SpA was registered as an Insurance Broker in the Registry of Trade Assistants for Insurance of the CMF. The main objective of the Company is the remunerated intermediation of general and life insurance contracts with any insurer based in Chile.
On April 8, 2024, the Chilean Congress created de National Cybersecurity Agency ("ANCI") which act as the competent authority for critical and essential service providers in Chile and also 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. However, in this context, in June 2025, Mercado Pago Operadora S.A. and Mercado Pago Emisora S.A. submitted their filings before the ANCI to be registered as "essential service providers", as required under the new regulatory framework, which were admitted. In December 2025, the ANCI published the entities that were classified as Operators of Vital Importance (“OIV”), and only Mercado Pago Operadora S.A. has been included in that list. Such classification impose Mercado Pago Operadora S.A. specific obligations regarding cybersecurity governance, technical and organizational security measures, incident reporting protocols, business continuity standards and oversight by the ANCI. Mercado Pago’s Chilean entities are preparing to meet all applicable obligations once secondary regulation is enacted.
On May 30, 2024, the Chilean Congress passed Law 21,673, which 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.
In June 2025, Mercado Pago Operadora S.A. submitted an application to the CMF for registration to execute cross-border transactions. As of the date of this filing, this application is pending approval by the CMF.
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On August 6, 2025, Mercado Pago Operadora S.A. submitted an additional request to the CMF for approval of the enhancement of the existing Prepaid Card Issuer License. The proposed upgrade entails the conversion of the current license into a consolidated Prepaid Card and Credit Card Issuer License. As of the date of this filing, this additional request is pending approval.
Colombia
Colombia has regulatory frameworks for establishing clear guidelines to open accounts and delivering financial services. These include comprehensive policies for cash and risk management, with a particular focus on liquidity risk. Additionally, payment processors like Mercado Pago must adhere to high standards regarding security, privacy, and anti-money laundering compliance.
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, currently offering only the “Ordinary Deposit” product.
Uruguay
Uruguay has implemented comprehensive regulations governing electronic payments.
In 2016, Mercado Pago was launched in Uruguay and registered in Central Bank of Uruguay ("BCU") to provide services of payments and collections ("PSPC"). In July 2023, MercadoPago Uruguay S.R.L. obtained the approval by the BCU to operate as an Electronic Money Issuing Institution (“IEDE”). On October 1, 2023, MercadoPago Uruguay S.R.L. started operations, and since then, must adhere to regulations regarding the placement of user funds, including the obligation to deposit and maintain these funds in designated local bank accounts to guarantee the availability of balances in each user’s digital account. In October 2023, MercadoPago Uruguay S.R.L. was authorized by the BCU, subject to the terms of the regulations, to invest its user funds in short-term investments, including “overnight” bank deposits, leveraging results and assuming associated risks.
In July 2023, Communication No. 2023/147, superseded by Communication No. 2024/018 on February 1, 2024, established regulations for reporting security incidents. In October 2023, Communication No. 2023/196 mandated bi-monthly reports on administered fund compositions, and significant modifications addressing fast payment systems and regulatory rules were made to the payment system rules.
On April 12, 2024, MercadoPago Uruguay S.R.L. initiated a process with the 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.
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.
In August 2025, MercadoPago Uruguay S.R.L. filed an application with the CBU to offer interest-bearing accounts, through a partner. MercadoPago Uruguay S.R.L. has provided all requested information but the authorization is still pending approval by the CBU.
Bermuda
On July 17, 2025, the Bermuda Monetary Authority (“BMA”) granted Meli ISAC Ltd. and Meli ISA Ltd., two Bermudian subsidiaries of the Company, a Digital Asset Business license application to issue and operate the Company’s stablecoin, Meli Dólar, which was conditional upon satisfying certain pre-commencement requirements that were completed in August 2025. Therefore, on August 18, 2025, the BMA issued the corresponding Class M Digital Asset Business licenses, thus authorizing Meli ISAC Ltd. to issue, sell or redeem digital assets, and authorizing Meli ISA Ltd. to operate as a digital assets service vendor.
On September 22, 2025, the migration of the Meli Dólar business from Uruguay to Bermuda was successfully completed under the Class M Digital Asset Business licenses and operations under this new regulatory framework commenced.
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ITEM 1A. RISK FACTORS
Summary of Risk Factors
Our business is subject to numerous risks. The following is a summary of the principal risks that we believe are material to our stockholders and prospective stockholders and that should be carefully considered when evaluating our Company, our business and prospects:
■Our business depends on the continued growth of online commerce and digital financial services, the commercial and financial activity that our users generate on our platforms and the availability and reliability of the Internet in Latin America;
■We operate in a highly competitive and evolving environment;
■Any use of AI/ML technologies in our operations may present additional labor, legal, regulatory, and social risks, which could lead to additional costs and impact our competitive position;
■We rely on third-party platforms, such as Google Play and Apple app stores, to access our Mercado Libre and Mercado Pago apps;
■Our future success depends on our ability to expand and adapt our operations to meet rapidly changing industry and technology standards in a cost-effective and timely manner;
■The markets in which we operate are rapidly evolving and we may not be able to maintain our profitability;
■We may be liable for or experience reputational damage resulting from user default or the failure of our ecosystem services ;
■Fraudulent activity by our users could negatively impact our operating results, brand and reputation and cause the use of services to decrease;
■We are subject to consumer trends and could lose revenue if certain items become less popular or if we fail to meet customer demand;
■Manufacturers may limit distribution of their products by distributors, prevent distributors from selling through us or encourage governments to limit e-commerce;
■Our failure or the failure of our partners to manage Mercado Pago users’ funds properly could harm our business;
■We rely on banks and investment funds that acquire Mercado Pago’s receivables and payment processors to fund transactions, and changes to card association fees, rules or practices may adversely affect our business;
■The failure of the financial institutions with which we conduct business may have a material adverse effect on our business, operating results, and financial condition;
■A rise in interest rates may negatively affect our Mercado Pago payment volume;
■Changes in Mercado Pago’s funding mix and ticket mix could adversely affect Mercado Pago’s results;
■Our lending solution exposes us to the credit risk of our merchants and consumers, among other risks;
■We face significant risks related to the ongoing reliability of our logistics network and shipping service;
■Failure to successfully operate our fulfillment network may also negatively affect our business;
■Problems that affect our service providers could potentially adversely affect us as well;
■If we are unable to compete effectively for advertising spend, or if our merchants reduce advertising spend, our business and results of operations could be materially harmed;
■We may not realize benefits from recent or future strategic investments, acquisitions of businesses, technologies, services or products, despite their capital outlay and potential dilution to our stockholders;
■We depend on key personnel, the loss of which could have a material adverse effect on us;
■We may have inadequate business insurance coverage, which would require us to spend significant resources in the event of a disruption of our services or other contingency;
■Our debt instruments contain restrictions that limit our flexibility in operating our business, and changes by any rating agency to our outlook or credit rating could negatively affect us;
■We are exposed to the value of digital assets that may be subject to volatile market prices and unique risks of loss;
■Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks;
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■There are potential risks related to our cryptocurrency buy, hold and sell feature;
■Natural disasters, climate change, geopolitical events, global health epidemics or pandemics, transportation disruptions and catastrophic events could materially adversely affect our financial performance;
■We are subject to extensive government regulation and oversight. Failure to comply with existing and future rules and regulations in the jurisdictions in which we operate could adversely affect the operations of one or more of our businesses in those jurisdictions;
■It may be difficult to enforce judgments rendered against us in U.S. courts;
■We could face legal and financial liability upon the sale of items that infringe intellectual property rights of third parties and for information and material disseminated through our platforms;
■We may not be able to adequately protect and enforce our intellectual property rights. We could potentially face claims alleging that our technologies infringe the property rights of others;
■Any delay or problem with operating or upgrading our existing information technology infrastructure could cause a disruption in our business and adversely impact our financial results;
■We are subject to security breaches, disruption and confidential data theft from our systems, which can adversely affect our reputation and business;
■We may not be able to secure licenses for technologies on which we rely;
■We face the risk of political and economic crises, instability, terrorism, civil strife, labor conflicts, expropriation, corruption and other risks of doing business in emerging markets;
■Latin American governments have exercised and continue to exercise significant influence over the economies of the countries where we operate. This involvement, as well as political and economic conditions, could adversely affect our business;
■Local currencies used in the conduct of our business are subject to depreciation, volatility and exchange controls;
■Our transactions in Latin America may be impacted by the weaknesses of secure payment methods; and
■Provisions of our certificate of incorporation and Delaware law could inhibit others from acquiring us, prevent a change of control, and may prevent efforts by our stockholders to change our management.
Set forth below is a full description of each of the risks that we believe are material to our stockholders and prospective stockholders. You should carefully consider the following factors in evaluating our Company, our properties and our business.
Risks related to our business and operations
Our business depends on the continued growth of online commerce and digital financial services, the commercial and financial activity that our users generate on our platforms and the availability and reliability of the Internet in Latin America
Online commerce and digital financial services are still a developing market in Latin America, with usage patterns continuing to evolve rapidly. A significant portion of our business is based on an Internet platform for commercial and financial transactions in which almost all activity depends on our users and is therefore largely outside of our control. For third-party sales, third party sellers decide independently which items they will list and their pricing and commercial policies. Our future revenues depend substantially on Latin American consumers’ and providers’ widespread acceptance and continued use of the Internet as a way to conduct commerce and to carry out specific financial transactions as well as on the reliability, affordability and speed of mobile data networks and fixed broadband infrastructure across the region. For us to grow our user base successfully, more consumers and providers must accept and use new ways of conducting business and exchanging information, including through mobile devices and digital financial tools. The price of personal computers and/or mobile devices and Internet access may limit our potential growth in certain areas or countries with low levels of Internet penetration and/or high levels of poverty, or where inflation and currency devaluations increase the cost of connectivity and hardware. Internet infrastructure in Latin America may not be able to support continued growth in the number of Internet users, their frequency of use or their bandwidth requirements, especially given the increasing data demands of video content, AI-driven services and logistics-tracking technologies.
Given that we operate in a business environment in Latin America that is different than the environment in which other companies providing e-commerce and digital financial services operate, including differences in connectivity costs, payment infrastructure, and logistics networks, the performance of such other companies is not an indication of our future financial performance. Availability, transaction speeds, acceptance, interest and use of the Internet across Latin America are all critical to our growth and services, as is continued access to reliable regional cloud infrastructure, payment networks and mobile platforms operated by third parties, and the occurrence of any one or more of the above challenges to Internet usage or disruptions in regional telecommunications, data centers or payment-processing networks could have a material adverse effect on our business.
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We operate in a highly competitive and evolving environment
The e-commerce and omnichannel retail, e-commerce services, fintech and digital content and electronic devices industries are still relatively new in Latin America, rapidly evolving, highly innovative and intensely competitive, and we expect competition to become more intense in the future. To compete successfully, we must accurately anticipate technological developments and deliver innovative, relevant and useful products and services in a timely manner. Our competitors may respond to new or emerging technologies and capabilities, including practical applications of AI/ML, as well as changes in customer requirements, faster and more effectively than we may, and they may also devote greater resources to the development, promotion, and sale of products and services.
Barriers to entry are relatively low, and our current offline and new digital competitors, including small businesses who want to create and promote their own stores or platforms, can easily launch new sites, mobile platforms or applications at relatively low costs using software that is commercially available, or partner with other e-commerce, search, advertising or social media companies. Users who purchase or sell goods and services through us have increasingly more options, and merchants also have more channels to reach consumers. Competitors may also be more narrowly focused on a particular type of goods and create a compelling community for those particular goods. In 2025, several new global and regional entrants, including rapidly expanding Asian e-commerce platforms, gained significant market share in Latin America through low-price strategies, direct-from-manufacturer supply chains and cross-border logistics models. These developments, together with the continued growth of omnichannel and local competitors, illustrate the highly competitive nature of the Latin American e-commerce and fintech markets, where barriers to entry remain low and users and merchants can easily switch or use multiple across competing platforms at the same time.
We have many competitors in different industries, ranging from large and established companies to emerging start-ups. Mercado Libre’s Marketplace currently competes with a number of companies operating throughout Latin America, including: traditional brick and mortar retailers, e-commerce and omnichannel retailers and vendors and distributors offering physical, digital and interactive media products; online sales, auction services and comparison shopping websites; social media platforms and online and app-based means of search engines for the purchase of goods and services; companies that provide e-commerce related services such as inventory, storage and supply chain management, fulfillment, advertising and payment processing; other small online service providers, including those that serve specialty markets; and business-to-consumer online commerce services. The emergence of new international players, particularly from Asia, further demonstrates that the markets in which we operate remain open and dynamic, although such entrants may exert additional pressure on pricing, marketing expenditures and logistics capabilities across the region. Mercado Pago competes with existing online and offline companies, including, among others: traditional banks and financial institutions; fintech companies (e.g., crowdfunding institutions, electronic payment providers), and other providers of financial services and payment methods, particularly credit, prepaid and debit cards, checks, money orders, and electronic bank deposits and transactions; payment networks that facilitate processing and aggregation of payments cards and retail networks; tokenized and contactless payment services, digital wallets, cryptocurrency wallets, QR code-based solutions and other payment solutions; international and local online payments services; the use of cash, which is often preferred in Latin America; offline funding alternatives such as cash deposit and money transfer services; peer to peer payments and electronic money remittances; and other point of sale terminals and devices or technologies installed at merchants’ sites.
Competitors with larger, more well-established and well-financed companies have greater resources, a longer history, greater brand recognition, more customers and better access to suppliers of critical inputs and products. This positioning allows our competitors to acquire, invest in or enter into commercial relationships with competing businesses, adopt more aggressive pricing, secure better terms from suppliers, make acquisitions and enter into other strategic arrangements, devote more resources to technology, marketing and promotional campaigns, infrastructure, fulfillment and payment solutions and continue to compete for users, advertisers, customers, and partners. These competitive advantages could be used to harm our competitive position through the adoption of restrictive covenants with suppliers, self-preferencing their product offerings, tying and bundling services and cross subsidizing. Competing services tied to established banks and other financial institutions may offer greater liquidity and create greater consumer confidence in the safety and efficacy of our competitors' services. Established banks and other financial institutions currently offer online payments, and those that do not yet provide such a service could quickly and easily develop it.
In many cases, companies that directly or indirectly compete with us provide Internet access and other services. Some of these providers may take measures that could degrade, disrupt, increase the cost of customers’ use of our services or advocate for government measures that could increase or change regulatory requirements that increase our costs, all of which could adversely affect our business and results of operations. Further, discrepancies in the enforcement of existing laws may enable our competitors to leverage such discrepancies in their favor, thereby affording them competitive advantages. Similarly, some of our competitors have been accused of anticompetitive business practices in other jurisdictions, which they can replicate in Latin American countries where antitrust authorities have not yet focused on such commercial practices and where we actively compete.
The global financial services and payments industry is continuously changing and increasingly subject to regulatory supervision and continued examination. Some of the payment services offered by our competitors operate at lower commission rates than Mercado Pago’s current rates, which has resulted in market pressures with respect to the commissions we charge for our Mercado Pago services. Moreover, establishing a financial services and payments solution entity in Latin America has proven to be difficult and resource intensive in terms of time and capital. Traditional banking and financial institutions in Latin America still have significant influence over sectoral regulators and have been relatively successful at influencing the enactment of new regulations that may hinder or restrict the overall success of fintech businesses by imposing unnecessary and cumbersome requirements or otherwise limiting their business models. This influence makes it harder to promote innovative payment solutions and policy changes to adapt regulation to an ever changing and fast growing innovative and disrupting industry. In addition, the development of contactless and near-field communication ("NFC") payments in Latin America has been influenced by global device manufacturers’ restrictions on third-party access to NFC technology. While recent regulatory developments in Brazil have begun to open access, most markets in the Latin American region remain limited in their access to such technology. These restrictions constrain our ability, and that of other local payment providers, to offer uniform tap-to-pay functionality across operating systems and devices, thereby affecting competition and innovation dynamics in mobile payments in the region.
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Any use of AI/ML technologies in our operations may present additional labor, legal, regulatory, and social risks, which could lead to additional costs and impact our competitive position
We are expanding our investment in AI/ML across the entire Company. This includes using generative AI and continuing to integrate AI capabilities into our products and services. While AI/ML can present significant benefits, it can also present risks and challenges to our business. Because AI/ML is a developing technology, legal frameworks for AI/ML governance are unsettled, quickly developing, and unpredictable. The use of AI/ML could lead to legal and regulatory investigations and enforcement actions, or may give rise to specific obligations, including required notices, consents and opt-outs, under various data privacy, protection and cybersecurity laws and regulations in a number of jurisdictions. Additionally, the integration of autonomous AI agents into our workflows introduces heightened risks related to unpredictable system behavior and reduced human oversight, which could lead to significant operational errors, cybersecurity vulnerabilities, or inaccuracies. Any failure to properly govern or control these autonomous agents could lead to regulatory non-compliance, potential legal liabilities and reputational harm arising from unauthorized or unintended agent actions. Some uses of AI/ML pose emerging ethical issues and present a number of risks that cannot be fully mitigated, including data sourcing, technology integration, bias in decision-making algorithms, discrimination or AI hallucinations, open source software issues, security challenges and the protection of personal privacy that could slow down or impair the adoption and acceptance of AI/ML. Moreover, the AI/ML and cloud computing ecosystem is characterized by high concentration in hardware and infrastructure supply, and our ability to scale certain AI/ML models may depend on the pricing and availability of computing resources provided by a small number of global vendors, which may limit our speed or cost efficiency relative to competitors. AI/ML technology and services are highly competitive, rapidly evolving, and require significant investment, including development and operational costs, to meet the changing needs and expectations of our existing users and attract new users. Our ability to deploy and leverage certain AI/ML technologies critical for our products and services and for our business strategy, and to enhance productivity across the organization, may depend on the availability and pricing of third-party equipment and technical infrastructure. Additionally, other companies may develop AI products and technologies that are similar or superior to our technologies or more cost-effective to deploy. Other companies may also have (or in the future may obtain) patents, copyrights or other proprietary rights that could prevent, limit, or interfere with our ability to make, use, or sell our own AI/ML products and services. We may not be able to compete effectively with our competitors and our strategy to integrate AI/ML technology into our products and services may also not be accepted by our customers or by other businesses in the marketplace. Furthermore, the non-deterministic nature of generative AI outputs may undermine the reliability and trustworthiness of our products and services, which may lead to customer dissatisfaction, brand or reputational harm or legal or regulatory liabilities. If the output from AI/ML in our products or services is deemed to be inaccurate or questionable, or if the use of AI/ML does not operate as anticipated or perform as promised, our business and reputation may be harmed. The integration of AI/ML may also expose us to risks regarding intellectual property ownership and license rights, particularly if any copyrighted material is embedded in training models. Any failure on our part to effectively and efficiently utilize AI/ML to enhance our operations or products and services may result in material impacts to our financial performance, financial results and overall business strategy.
We rely on third-party platforms, such as Google Play and Apple app stores, to access our Mercado Libre and Mercado Pago apps
Our Mercado Libre and Mercado Pago mobile applications depend on distribution through third-party app stores operated by global mobile operating system providers, primarily Apple’s App Store and Google Play. We are subject to the providers' standard developer terms and conditions, which they can modify unilaterally and with little notice. These terms govern the content, promotion, and distribution of apps and include requirements such as the mandatory use of the platform’s own payment processing system for certain digital goods and services, typically subject to commissions ranging from 15% to 30% of the transaction value, restrictions on informing users of alternative payment channels (anti-steering), and limitations on in-app distribution of digital goods or services that compete with the platform owner’s offerings. These commercial and technical restrictions may increase our operating costs, reduce pricing flexibility and limit our ability to deploy and monetize new digital products, including streaming, advertising and loyalty programs. They may also place us at a competitive disadvantage in connection with digital ecosystems that are vertically integrated and do not incur similar distribution or payment-processing fees. Additionally, regulatory and legal scrutiny of these practices has intensified globally. Recent enforcement actions in the European Union and Brazil have challenged app-store restrictions on payments, anti-steering clauses and access to NFC functionality. While the impact of these developments in Latin America remains uncertain, any future regulatory or contractual changes affecting app-store rules could alter our cost structure, distribution capabilities or competitive position. If changes to these terms or their enforcement disrupt the availability or functionality of our applications, or if we are unable to maintain effective distribution through these platforms, our business, results of operations and growth prospects could be materially affected.
Our future success depends on our ability to expand and adapt our operations to meet rapidly changing industry and technology standards in a cost-effective and timely manner
Rapid, significant and disruptive technological changes impact the industries in which we operate. Moreover, the effects of technological changes on our business are uncertain and depend on our access to global infrastructure and standards that we do not control. Our success depends on our ability to develop and incorporate new technologies and adapt to technological changes and evolving industry standards and interoperability requirements.
We plan to continue to expand our operations by expanding our services internationally and developing and promoting new and complementary services. We may have limited or no experience in our newer market segments, which can present new and difficult technology and regulatory challenges, including compliance with local data, payments and interoperability requirements. We may not succeed at expanding our operations in a cost-effective or timely manner, and our expansion efforts may not have the same or greater overall market acceptance as our current services, which could damage our reputation and diminish the value of our brands. Similarly, a lack of market acceptance of these services or our inability to generate satisfactory revenues from any expanded services to offset their cost could have a material adverse effect on our business, results of operations and financial condition.
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We must constantly add new hardware, update software, enhance and improve our billing and transaction systems, and add and train new engineering and other personnel to accommodate the increased use of our website, apps and the new products and features we regularly introduce. This upgrade process is expensive and the increasing complexity and enhancement of our website results in higher costs, and ultimately may not be successful. Our revenues depend on prompt and accurate billing processes. Failure to upgrade our technology, transaction-processing capabilities, features, transaction processing systems, security infrastructure, or network infrastructure to accommodate increased traffic or transaction volume, or the increased complexity of our website could materially harm our business and our ability to collect revenue. The successful operation of these systems depends in part on reliable access to computing capacity and third-party technology providers. Any disruption or failure in our IT systems or infrastructure, or those of our third-party providers, could result in system failures, delays or errors in our operations, which could harm our business and financial results.
We may also need to enter into relationships with various strategic partners, websites, cloud providers, other online service providers, shipping and logistics companies and other third parties necessary to our business. The increased complexity of managing multiple commercial relationships could lead to execution problems that can affect current and future revenues and operating margins, as well as our reputation. The expansion of our Mercado Pago and Mercado Envios businesses into new countries may also require a close commercial relationship with one or more local banks, regulators or other intermediaries, which may prevent, delay or limit the introductions of our services in such countries or subject us to differing interoperability and compliance standards. If our users have negative experiences with, or view unfavorably, any of the companies or partners with whom we have relationships, it could cause them to stop using our products and services and negatively impact our results of operations. In addition, changes in access terms, pricing or technical specifications imposed by global device, platform or cloud providers could influence our ability to innovate or deploy new services on a consistent basis across markets.
The markets in which we operate are rapidly evolving and we may not be able to maintain our profitability
As a result of the emerging nature and related volatility of the markets and economies in the countries in which we operate, ongoing inflationary and currency-exchange volatility in certain Latin American markets, and the entry of new global and regional competitors that exert pricing and margin pressure, the increased variety and mix of services and products that we offer, including technology and AI-driven initiatives with significant upfront investment requirements, and the rapidly evolving nature of our business, it is particularly difficult for us to forecast our revenues or earnings accurately. Our current and future expense levels are based largely on our investment plans and estimates of future revenues and are, to a large extent, fixed or committed to long-term technology, logistics and infrastructure programs that cannot be scaled down quickly. We may not be able to adjust spending in a timely manner to compensate for any unexpected revenue shortfall or cost increase driven by infrastructure, energy or compute-resource pricing. Accordingly, any significant shortfall in revenues relative to our planned expenditures may have an immediate adverse effect on our business, results of operations and financial condition and may be exacerbated by increased competitive intensity and macroeconomic uncertainty in our main markets.
We may be liable for or experience reputational damage resulting from user default or the failure of our ecosystem services
Our success depends largely upon sellers accurately representing and reliably delivering the listed goods and buyers paying the agreed purchase price. We have received in the past, and anticipate that we will receive in the future, complaints from users who did not receive the purchase price or the goods agreed to be exchanged, and regarding the quality or the partial or non-delivery of purchased items. While we can suspend the accounts of users who fail to fulfill their obligations to other users, we do not have the ability to force users to meet their obligations. Our Buyer Protection Program, which is generally available to all of our buyers, has been implemented to address those situations, subject to certain conditions. As we expand the coverage of our Buyer Protection Program, the number and amount of reimbursements may increase. Effective customer service requires significant personnel expense and investment in developing programs and technology infrastructure to help customer service representatives carry out their functions, which if not properly managed, could significantly impact our profitability.
In addition, failure to handle customer complaints effectively and negative publicity generated as a result of the fraudulent or deceptive conduct of any of our sellers could damage our reputation, diminish the value of our brands and negatively impact our results of operations.
The aforementioned risks are also applicable to the broad range of services offered through Mercado Pago, where we may also receive claims that our financial products or services—such as payments, transfers, fund settlements, loans, or cash advances—do not work properly or are not fulfilled on time. These services expose us to additional risks, such as failures or delays in the settlement or accreditation of funds, operational errors in transactions or transfers, claims related to unavailable balances, disputes over charges or refunds, as well as defaults on loans or cash advances granted to merchants / buyers.
Fraudulent activity by our users could negatively impact our operating results, brand and reputation and cause the use of services to decrease
We are subject to the risk of fraudulent activity by our users, including fraudulent and illicit sales, money laundering, bank fraud, fraud from means of payment entities, employee fraud, third parties providers' fraud and online securities fraud. Measures to detect and reduce the occurrence of fraudulent activities are complex and require continuous improvement, and there can be no assurance that we will be able to successfully and accurately detect, prevent or deter fraud, particularly new and continually evolving forms of fraud. As our business grows, the cost of remediating fraudulent activity, including customer reimbursements, may materially increase and could negatively affect our operating results. In addition, users’ fraudulent or potential illegal activities when using our platforms or payment solutions we offer could expose us to civil or criminal liability and could have a material adverse effect on our financial performance, our business or our reputation.
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We incur losses from claims of customers who did not authorize a purchase, from buyer fraud and from erroneous transmissions. Third parties have attempted, and will likely continue to attempt, to abuse access to and misuse our payments solution to commit fraud by, among other things, creating fictitious accounts using stolen or synthetic identities or personal information, making transactions with stolen financial instruments or fraudulently inducing users of our platforms into engaging in fraudulent transactions. Due to the digital nature of our payments services, third parties may perform abusive schemes or fraud attacks that are often difficult to detect and may reach a scale that would otherwise not be possible in physical transactions. Numerous and evolving fraud schemes and misuse of our payments service could subject us to significant costs and liabilities, require us to change our business practices, lead to loss of customer confidence in, or decreased use of, our products and services, damage our reputation and brands, and divert the attention of management from the operation of our business. In addition to the direct costs of such losses, if the losses are related to credit card transactions and become excessive, they could result in Mercado Pago losing the right to accept credit cards for payment, which could adversely affect our business.
We are subject to consumer trends and could lose revenue if certain items become less popular or if we fail to meet customer demand
Our future revenues depend on continued demand for the types of goods that we sell, that users list on the Mercado Libre Marketplace or that users pay for with Mercado Pago on or off the Mercado Libre Marketplace. Demand for our products and services can fluctuate significantly for many reasons, including due to perceived availability, consumer trends, the adoption of new technologies (such as AI-driven tools) that may bypass our marketplace search results, seasonality, promotions, product launches, defective products or unforeseeable events, such as in response to natural or man-made disasters, public health crises (including pandemics), extreme weather (including as a result of climate change), geopolitical events, or changes in or uncertainty about macro-economic conditions, which could impact the overall volume of transactions on our platforms. A decline in the demand for or popularity of certain items sold through the Mercado Libre Marketplace without an increase in demand for different items could result in reduced revenues.
Our ability to predict and adapt to changing tastes and preferences depends on many factors, including, but not limited to, obtaining accurate and relevant data on customer preferences, emphasizing relevant merchandise categories, effectively managing our inventory levels, and implementing competitive and effective pricing and promotion strategies. Although it is difficult to accurately forecast consumer trends and demand, we strive to predict these trends using the methods described above as overstocking or understocking products we sell could lead to lower sales, missed opportunities and excessive markdowns, any of which could have a material impact on our business and operating results or reputation. Failure to accurately forecast consumer trends and demand could significantly affect our revenue and our future growth.
Manufacturers may limit distribution of their products by distributors, prevent distributors from selling through us or encourage governments to limit e-commerce
Manufacturers may attempt to enforce minimum resale price maintenance arrangements to prevent distributors from selling on our websites or on the internet generally, or at prices that would make our site unattractive relative to other alternatives or may impose selective-distribution or platform-parity requirements that restrict authorized sellers from offering their products on open marketplaces such as ours. Such practices, if adopted broadly by manufacturers, could reduce the range of products offered online and thereby influence overall marketplace dynamics. Increased competition or anti-Internet distribution policies and new brand-control strategies, including algorithmic price monitoring or differentiated fulfillment incentives, could result in reduced operating margins, loss of market share and diminished value of our brand. In order to respond to changes in the competitive environment, we may, from time to time, make pricing, service or marketing decisions or acquisitions that may be controversial with and lead to dissatisfaction among some of our sellers, which could reduce activity on our websites and harm our profitability. In addition, regulatory authorities in several Latin American jurisdictions have begun to scrutinize vertical-distribution and online-channel restrictions, and any such investigations or enforcement trends could affect the way manufacturers and marketplaces interact in the region.
Our failure or the failure of our partners to manage Mercado Pago users’ funds properly could harm our business
Our ability to manage and account accurately for Mercado Pago users’ funds requires a high level of internal controls. As Mercado Pago continues to grow, we must strengthen our internal controls accordingly. Mercado Pago’s success requires significant consumer confidence in our ability to handle large and growing transaction volumes and amounts of customer funds. Any failure to maintain necessary controls or to properly manage customer funds could severely reduce customer use of Mercado Pago, and we could be found to be in violation of applicable laws and regulations, be subject to fines or other penalties or forced to cease providing this service.
Mercado Pago offers certain of its users the option to use the balances stored on their Mercado Pago digital accounts to invest in certain investment products including low-risk investment funds (money market fund equivalents). For the purposes of offering such intermediated investment functionality, in some cases, Mercado Pago has entered into diverse contractual relationships with third parties to serve as the managers of the investment funds and the facilitators of all associated investment services, including but not limited to the execution of investment orders. In such cases, the scope of Mercado Pago’s involvement in these services is generally strictly limited to (i) providing the technology infrastructure and processing charges and payments from users that use their balances held with Mercado Pago to invest, and (ii) sending the appropriate instructions to our investment partners. The third party providers have complete decision-making authority over the funds and their investment strategies. A disruption in our relationships with such third party providers or any of the services they provide to our users could adversely affect our customers’ confidence in our business. In addition, the value of the investments made by our users in the respective investment funds may fluctuate over time as a result of factors not in our control, such as market conditions and investment decisions made by our third party providers. If there is a disruption in the services provided by our third party providers or the investments made by our users otherwise decrease in value, our users may try to pursue claims or legal actions against us, which could affect our reputation and results of operations.
Any failure by us or by such third party providers to comply with financial and capital markets regulatory frameworks, or any deficiency in operational, technological, know-your-customer ("KYC"), suitability or anti-money laundering and counter-terrorism financing ("AML"/"CFT") controls in connection with these products, could result in regulatory investigations or sanctions, including fines, restrictions on activities, suspension or cancellation of authorizations, as well as civil claims by users, all of which could adversely affect our reputation, business and results of operations.
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We rely on banks and investment funds that acquire Mercado Pago’s receivables and payment processors to fund transactions, and changes to card association fees, rules or practices may adversely affect our business
Mercado Pago relies on banks, investment funds or payment processors to process the funding of Mercado Pago transactions and Mercado Libre Marketplace collections, and we must pay a fee for this service. From time to time, card associations may increase the interchange fees they charge for each transaction using one of their cards. Card processors have the right to pass on to us any increases in interchange fees or their own fees for processing. These increased fees increase the operating costs of Mercado Pago, reduce our profit margins from Mercado Pago operations and, to a lesser degree, affect the operating margins of the Mercado Libre Marketplace. We also offer Mercado Pago prepaid and debit cards in Brazil and Mexico, respectively (both under VISA brand), and prepaid cards in Argentina and Chile (both under MasterCard brand); and Mercado Pago credit cards in Brazil (under VISA brand), Mexico and Argentina (under MasterCard brand). If any of these companies were to be unwilling or unable to provide these services to us, or if they are willing to provide these services but at less favorable terms, our business and results of operations would be adversely affected.
We are also subject to, or required by processors to comply with, card association operating rules. The card associations and their member banks set and interpret the card rules. Some of those member banks compete with Mercado Pago. Card companies could adopt new operating rules or re-interpret existing rules that we or Mercado Pago’s processors may find difficult or even impossible to follow. As a result, we could lose our ability to provide Mercado Pago customers the option of using debit, prepaid or credit cards to fund their payments and MercadoLibre users the option to pay their fees using a debit, prepaid or credit card, which could be materially adverse to our business.
We could lose the right to accept credit cards or pay fines if card processors determine that users are using Mercado Pago to engage in illegal or “high risk” activities or if users generate a large amount of chargebacks. Accordingly, we are continually working to prevent “high risk” merchants from using Mercado Pago. Additionally, we may be unable to access financing in the credit and capital markets at reasonable rates to fund our Mercado Pago operations, and for that reason, our profitability and total payments volume could materially decline.
The failure of the financial institutions with which we conduct business may have a material adverse effect on our business, operating results, and financial condition
If the condition of the financial services industry deteriorates or becomes weakened for an extended period of time, any of the following factors could have a material adverse effect on our business, operating results, and financial condition:
■Disruptions to the capital markets or the banking system may materially adversely affect the value of investments or bank deposits we currently consider safe, liquid or that provide a reasonable return, and we may be unable to find suitable alternative investments, which could result in lower interest income or longer investment horizons;
■We may be required to increase the installment and financing fees we charge to customers for purchases made in installments or cease offering installment purchases altogether, each of which may result in a lower volume of transactions completed;
■We may be unable to access financing in the credit and capital markets at reasonable rates. Due to the nature of our Mercado Pago and Mercado Libre Marketplace businesses, we generate high credit card receivables and consumer and merchant loans that from time to time we sell to financial institutions, and accordingly, lack of access to credit or significant changes to the terms of any existing credit, or bank liquidations could cause us to experience severe difficulties; and
■The failure of financial institution counterparties to honor their obligations to us under credit instruments could jeopardize our ability to rely on and benefit from those instruments. Our ability to replace those instruments on the same or similar terms may be limited under difficult market conditions.
A rise in interest rates may negatively affect our Mercado Pago payment volume
We offer users the ability to pay for goods purchased in installments using Mercado Pago in some of the countries where we operate. In 2025 and 2024, installment payments represented 19.0% and 20.3%, respectively, of Mercado Pago’s total payment volume. To subsidize the cost of the installment payment feature, from time to time we pay interest to discount credit card receivables, securitize credit card receivables through trusts or finance Mercado Pago business through financial debt. In all of these cases, if interest rates increase, we may have to raise the installment fees we charge to users that would likely have a negative effect on Mercado Pago’s total payment volume.
Changes in Mercado Pago’s funding mix and ticket mix could adversely affect Mercado Pago’s results
Mercado Pago pays significant transaction fees when customers fund payment transactions using debit or credit cards or through unaffiliated third-party providers, nominal fees when customers fund transactions from their bank accounts, and no fees when customers fund transactions from an existing Mercado Pago account balance. Our financial performance remains highly sensitive to changes in the proportion of payments funded with credit cards, which we refer to as funding mix sensitivity. Customers may prefer to pay with credit cards rather than bank transfers for various reasons, including due to the ability to pay in installments, dispute charges (including chargebacks), earn rewards and defer payment, or due to a reluctance to provide bank account information to Mercado Pago. Certain costs and transaction fees that Mercado Pago pays in connection with specific payment methods are fixed on a per-transaction basis regardless of ticket size, while others vary by card network. We generally charge a fee calculated as a percentage of the transaction amount. As a result of these fixed cost dynamics, if we receive a larger percentage of low-ticket transactions or a greater volume of payments routed over higher-cost card networks, our profit margins may decline, and we may need to raise prices, which in turn could adversely affect transaction volumes.
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Our lending solution exposes us to the credit risk of our merchants and consumers, among other risks
Our lending solution is offered to certain merchants and consumers, and the financial success of this product depends on the effective management of the credit-related risk. We assess the credit risk of merchants and/or consumers seeking a loan based on an internally-developed risk model which, among other factors, may not accurately predict their creditworthiness due to inaccurate assumptions about the particular merchant and/or consumer or the economic environment or limited product history, among other aspects. The accuracy of the risk model and our ability to manage credit risk may also be affected by legal or regulatory changes (e.g., bankruptcy laws and minimum payment regulations), competitors’ actions, changes in consumer behavior, funding resources, changes in the economic environment, changes in regulation on interest rates and other factors.
A decline in economic, political, market, health and social conditions could impact our users as well, and their decisions could reduce the number of cards, accounts, and credit lines of their account holders, which ultimately impact our revenues. Any events or conditions that impair the functioning of the financial markets, tighten the credit market, or lead to a downgrade of our current credit rating could increase our future borrowing costs and impair our ability to access the capital and credit markets on favorable terms, which could affect our liquidity and capital resources, or significantly increase our cost of capital. Similar to other businesses with significant exposure to credit losses, we face the risk that our lending users may default on their payment obligations, making the receivables uncollectible and creating the risk of potential write-offs, which could negatively impact our liquidity. Any of these events could adversely affect our business and results of operation.
The funding and growth of our lending business are directly related to interest rates; a rise in interest rates may negatively affect our lending business and results of operations.
We face significant risks related to the ongoing reliability of our logistics network and shipping service
In certain countries where we operate, we offer users our Mercado Envios shipping service through integration with local carriers. We generally pay local carriers directly for their shipping costs, and separately decide the shipping costs paid by our customers. The decision to raise the shipping fees charged to users may have a negative effect on Mercado Envios’ shipping volume, and the decision not to do so may result in a decrease in the operating margins of our commerce operations.
We rely on a number of local carriers (through non-exclusivity agreements) to receive the inventories for our first-party business and on third parties to ship orders to customers. The unavailability of the services of local carriers in certain regions with high demand could negatively affect our ability to make shipping services available to our customers, which could in turn have a material adverse effect on our shipping service, operating results, and financial condition.
Failure to successfully operate our fulfillment network may also negatively affect our business
Through our logistics solution, Mercado Envios, we offer sellers on our platform fulfillment and temporary warehousing services, including maintaining inventories of third parties that sell products through our platform. We also use fulfillment and temporary warehousing services for our first-party business. As we continue to add fulfillment centers, our fulfillment network may become more complex, and the operation of such centers may present significant challenges, including organized crime and drug dealers operating in certain regions where we provide logistic solutions, increasing the complexity of tracking inventories and the operation of our fulfillment network. Our failure to accurately forecast customer demand, seller demand for storage, staffing and properly handle inventories and commercial relationships with third parties could result in excess or insufficient fulfillment capacity, service interruptions, an inability to optimize platform fulfillment or staffing, unexpected costs and may adversely affect our reputation or results of operations. Any supply chain constraint that affects us, our merchants or vendors could also adversely affect our ability to operate our fulfillment network effectively.
We offer to sellers our Fulfillment Protection Program for any damage or loss of seller’s inventories as a result of using our fulfillment network service, subject to certain conditions. We may in the future receive additional requests from sellers requesting reimbursement through this program or threatening legal action against us if we do not reimburse them, which could materially adversely affect our business and financial condition.
We continue to build new warehouses to manage the increasing demand of our logistics solution. These construction efforts are subject to a risk of delay as well as risks relating to the quality of the construction and regulatory requirements, which could increase our costs and negatively impact our ability to grow capacity in time to adequately meet demand.
Problems that affect our service providers could potentially adversely affect us as well
A number of parties provide services to us or to our users. These services include the hosting of our servers, shipping and the postal and payments infrastructures that allow users to deliver and pay for goods and services, in addition to paying their Mercado Libre Marketplace bills. Financial, regulatory, or other problems that might prevent these companies from providing services to us or our users could reduce the number of listings on our websites or make completing transactions on our ecosystem more difficult, which may harm our business. Any security breach at one of these companies could also affect our customers and harm our business.
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If we are unable to compete effectively for advertising spend, or if our merchants reduce advertising spend, our business and results of operations could be materially harmed
We have developed a growing advertising business on our platform. If we are unable to compete effectively for advertising spend, or if merchants reduce advertising spend due to adverse macroeconomic conditions or for other reasons, our business and results of operations could be materially harmed. Our ability to maintain or increase advertising revenue through our platform will depend on our ability to create more value for advertisers (such as increased numbers of users, increased transactions, enhanced monetization and stronger brand awareness) than our competitors. Some of our current and potential competitors have greater resources, larger customer bases and greater brand recognition in certain jurisdictions, particularly with respect to our newly launched products and services. Failing to provide superior value or deliver advertisements effectively and competitively could harm our reputation, financial condition and operating results. Changes to our advertising policies and data privacy practices, or those of other companies, may adversely affect the advertising revenues. In addition, the existence and development of technologies that block advertisements online or affect our ability to customize advertisements could harm our advertising business.
We may not realize benefits from recent or future strategic investments, acquisitions of businesses, technologies, services or products, despite their capital outlay and potential dilution to our stockholders
We intend to continue to enter into a wide array of potential strategic transactions, including strategic investments, acquiring businesses, technologies, services or products, as appropriate opportunities arise. We may not, however, be able to identify, negotiate or finance such future acquisitions successfully or at favorable valuations, or to effectively integrate these acquisitions with our current business. Strategic transactions may involve significant additional challenges, uncertainties and risks, including, but not limited to, unforeseen operating difficulties and expenditures, challenges of integrating new employees, systems, technologies, and business cultures; failure to develop the acquired business adequately; disruption of our ongoing operations and diversion of our management’s attention; inadequate data security, cybersecurity and operational and information technology resilience; failure to identify, or our underestimation of, commitments, liabilities, deficiencies and other risks associated with acquired businesses or assets; and potential exposure to new or increased regulatory oversight and uncertain or evolving legal, regulatory and compliance requirements; potential reputational risks that could arise from transactions with, or investments in, companies involved in new or developing businesses or industries, which may be subject to uncertain or evolving legal, regulatory and compliance requirements; failure of the transaction to advance our business strategy and of its anticipated benefits to materialize; potential impairment of goodwill or other acquisition-related intangible assets; and the potential for our acquisitions to result in dilutive issuances of our equity securities or significant additional debt. Strategic transactions may also heighten many of the risks described in this “Risk Factors” section.
Acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to intangible assets and impairment of goodwill, which could materially adversely affect our business, results of operations and financial condition. Any future acquisitions might require us to obtain additional equity or debt financing, which might not be available on favorable terms, or at all. If debt financing for potential future acquisitions is unavailable, we may determine to issue shares of our common stock or preferred stock in connection with such an acquisition, and any such issuance could result in the dilution of our common stock.
We depend on key personnel, the loss of which could have a material adverse effect on us
Our performance depends substantially on the continued services and on the performance of our senior management and other key personnel. Our ability to retain and motivate these and other officers and employees, as well as our ability to successfully transition key roles, is fundamental to our performance.
Our future success also depends on our ability to identify, attract, hire, train, retain and motivate other highly skilled technical, managerial, marketing and customer service personnel. Competition for these personnel is intense, and we cannot assure you that we will be able to successfully attract and retain sufficiently qualified personnel. In addition, changes we make to our current and future work environments may not meet the needs or expectations of our employees or may be perceived as less favorable compared to other companies, which could adversely affect our ability to attract and retain qualified personnel. Failure to successfully hire, train, manage, and retain sufficient and qualified personnel to meet our needs, as well as successfully transition key roles can be inherently difficult to manage, strain our operations, increase payroll and other costs, and harm our business and reputation.
We may have inadequate business insurance coverage, which would require us to spend significant resources in the event of a disruption of our services or other contingency
Even though we have business insurance coverage to face major contingencies affecting our services and goods, it may be inadequate to compensate for our losses, its coverage may be limited, or the amount of our insurance may be less than the related loss or we may be unable to recover all or part of the insured amounts due to the financial condition or insolvency of our insurance providers. Any business disruption, litigation, system failure or natural or man-made disaster may cause us to incur substantial costs and divert resources, which could have a material adverse effect on our business, results of operation and financial condition.
Our debt instruments contain restrictions that limit our flexibility in operating our business, and changes by any rating agency to our outlook or credit rating could negatively affect us
The terms of our senior unsecured notes issued in January 2021 and December 2025, the revolving credit agreement and certain collateralized debt under securitization transactions contain, and any debt instruments we enter in the future may contain, covenants that restrict or could restrict, among other things, our business and operations. Failure to pay amounts due under a debt instrument or a breach of any of its covenants may result in the acceleration of the indebtedness (subject in certain cases to a grace or cure period). Moreover, any such acceleration and required repayment of, or default in respect of, any of our indebtedness could, in turn, constitute an event of default under other debt instruments, thereby resulting in the acceleration and required repayment of other indebtedness we may have. Any of these events could materially adversely affect our liquidity and financial condition.
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Additionally, our reliance on structured credit vehicles (special purpose entities used to securitize credit cards receivable or loans receivable) with a concentrated investor base exposes us to redemption, refinancing, and pricing risks; the loss or reduced participation of one or more key investors could constrain our funding capacity, increase our cost of capital, and require adjustments to our credit origination strategy.
In addition, changes by any rating agency to our outlook or credit rating could negatively affect the value of both our debt and equity securities and increase our borrowing costs. If our credit ratings are downgraded or other negative action by rating agencies is taken, the interest rates payable by us under our indebtedness may increase. In addition, any downgrades to our credit ratings may affect our ability to obtain additional financing in the future and the terms of any such financing. Any of these factors could adversely affect our financial condition and results of operations.
We are exposed to the value of digital assets that may be subject to volatile market prices and unique risks of loss
We have used a portion of our cash reserve to purchase financial assets or other alternative reserve assets that are exposed to the value of digital assets and we may continue acquiring and holding them from time to time in the future.
The prices of digital assets have been, and may continue to be, highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent development, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, these assets rely on technology for their creation, existence and transactional validation, and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. The status of such assets for a variety of regulatory purposes is unclear and may change in the future.
As digital assets, including Bitcoin, have grown in popularity and market size, there has been an increasing focus on the extent to which such digital assets can be used to launder the proceeds of illegal activities or fund criminal or terrorist activities and/or entities subject to sanctions regimes. If we are found to have engaged in transactions involving Bitcoin or other digital assets with persons that have used such digital assets to launder money or persons subject to sanctions, we may be subject to regulatory obligations, proceedings or other actions, and our further transactions or dealings in Bitcoin or other digital assets may be restricted or prohibited. The rapidly evolving regulatory landscape with respect to digital assets may subject us to additional costs, such as the implementation of additional and potentially costly controls or other actions.
As intangible assets without centralized issuers or governing bodies, digital assets have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities, as well as human errors or computer malfunctions, that may result in operational problems or the loss, compromise or destruction of, or our inability to access, cryptographic private keys needed to access such assets, which may be irreversible and could adversely affect the value of our digital assets and an investment in our Company. While we have taken reasonable measures to secure any digital assets, if such threats are realized or the measures or controls we implement to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be adversely affected.
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks
We publish an annual integrated impact report, that describes, among others, our policies, practices and initiatives across a variety of environmental, social and governance (“ESG”) matters, including our contribution to socio-economic development, inclusion and financial education, human capital management and efforts to reduce our environmental impact. The implementation of these initiatives is complex and subject to contingencies, dependencies, and in certain cases, reliance on third-party verification and/or performance, and may require considerable investments. Further, these efforts may impose additional costs and expose us to new risks, including increased scrutiny from customers, regulators, investors and other stakeholders related to our ESG practices and disclosure. Stakeholder expectations regarding ESG matters continue to evolve and are becoming increasingly divergent among and within stakeholders. For example, some of our Marketplace customers may elect to reduce purchases from us if we are unable to verify that our performance and products meet the specifications of responsible sourcing programs. Investor advocacy groups, investment funds and institutional investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights. If we are targeted by those who disagree with our public positions on ESG issues, or if we do not otherwise successfully manage ESG-related expectations across investors and other stakeholders, it could erode stakeholder trust, impact our reputation, subject us to litigation or shareholder activism, which could adversely affect our business and reputation.