meli-20200930x10q

November 5, 2020

/s/ Marcos Galperin

Marcos Galperin

President and Chief Executive Officer

(Principal Executive Officer)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

-OR-


¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 001-33647

MercadoLibre, Inc.

(Exact name of Registrant as specified in its Charter)



Delaware		98-0212790
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Arias 3751, 7th Floor

Buenos Aires, Argentina, C1430CRG

(Address of registrant’s principal executive offices)

(+5411) 4640-8000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)





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

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 x 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 x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:





Large Accelerated Filer	x	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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

49,776,613 shares of the issuer’s common stock, $0.001 par value, outstanding as of November 3, 2020.

Table of Contents

MERCADOLIBRE, INC.

INDEX TO FORM 10-Q


PART I. FINANCIAL INFORMATION
Item 1 — Unaudited Interim Condensed Consolidated Financial Statements
Interim Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	1
Interim Condensed Consolidated Statements of Income for the nine and three-month periods ended September 30, 2020 and 2019	2
Interim Condensed Consolidated Statements of Comprehensive Income for the nine and three-month periods ended September 30, 2020 and 2019	3
Interim Condensed Consolidated Statements of Equity for the nine and three-month periods ended September 30, 2020 and 2019	4
Interim Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2020 and 2019	6
Notes to Interim Condensed Consolidated Financial Statements (unaudited)	7
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3 — Qualitative and Quantitative Disclosures About Market Risk	60
Item 4 — Controls and Procedures	63
PART II. OTHER INFORMATION	64
Item 1 — Legal Proceedings	64
Item 1A — Risk Factors	64
Item 6 — Exhibits	66
INDEX TO EXHIBITS	66

Table of Contents

MercadoLibre, Inc.

Interim Condensed Consolidated Balance Sheets

As of September 30, 2020 and December 31, 2019

(In thousands of U.S. dollars, except par value)

(Unaudited)


	September 30,	December 31,
	2020	2019
Assets
Current assets:
Cash and cash equivalents	$ 1,139,703	$ 1,384,740
Restricted cash and cash equivalents	484,426	66,684
Short-term investments (663,646 and 522,798 held in guarantee - see Note 4)	2,187,479	1,597,241
Accounts receivable, net	40,891	35,446
Credit cards receivable and other means of payments, net	660,402	379,969
Loans receivable, net	239,135	182,105
Prepaid expenses	28,387	45,309
Inventory	46,644	8,626
Other assets	96,824	88,736
Total current assets	4,923,891	3,788,856
Non-current assets:
Long-term investments	6,890	263,983
Loans receivable, net	15,073	6,439
Property and equipment, net	302,489	244,257
Operating lease right-of-use assets	225,345	200,449
Goodwill	79,064	87,609
Intangible assets, net	14,230	14,275
Deferred tax assets	125,012	117,582
Other assets	45,725	58,241
Total non-current assets	813,828	992,835
Total assets	$ 5,737,719	$ 4,781,691
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$ 509,095	$ 372,309
Funds payable to customers	1,421,825	894,057
Salaries and social security payable	157,127	101,841
Taxes payable	212,729	60,247
Loans payable and other financial liabilities	618,164	186,138
Operating lease liabilities	39,620	23,259
Other liabilities	48,700	114,469
Total current liabilities	3,007,260	1,752,320
Non-current liabilities:
Salaries and social security payable	29,200	26,803
Loans payable and other financial liabilities	618,337	631,353
Operating lease liabilities	189,098	176,673
Deferred tax liabilities	72,061	99,952
Other liabilities	26,237	12,627
Total non-current liabilities	934,933	947,408
Total liabilities	$ 3,942,193	$ 2,699,728

Commitments and Contingencies (Note 9)

Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares authorized,
50,000 and 100,000 shares issued and outstanding at September 30, 2020 and December 31, 2019	$ 49,427	$ 98,843

Equity

Common stock, $0.001 par value, 110,000,000 shares authorized,
49,776,613 and 49,709,955 shares issued and outstanding at September 30,
2020 and December 31, 2019	$ 50	$ 50
Additional paid-in capital	1,930,984	2,067,869
Treasury stock	(40,391)	(720)
Retained earnings	364,967	322,592
Accumulated other comprehensive loss	(509,511)	(406,671)
Total Equity	1,746,099	1,983,120
Total Liabilities, Redeemable convertible preferred stock and Equity	$ 5,737,719	$ 4,781,691

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

Table of Contents

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the nine and three-month periods ended September 30, 2020 and 2019

(In thousands of U.S. dollars, except for share data)

(Unaudited)


	Nine Months Ended September 30,		Three Months Ended September 30,
	2020	2019	2020	2019
Net revenues	$ 2,646,161	$ 1,622,043	$ 1,115,701	$ 603,031
Cost of net revenues	(1,425,985)	(828,267)	(635,511)	(318,689)
Gross profit	1,220,176	793,776	480,190	284,342
Operating expenses:
Product and technology development	(235,485)	(165,787)	(88,796)	(59,495)
Sales and marketing	(620,204)	(564,271)	(229,621)	(252,903)
General and administrative	(211,669)	(147,992)	(78,699)	(53,869)
Total operating expenses	(1,067,358)	(878,050)	(397,116)	(366,267)
Income (loss) from operations	152,818	(84,274)	83,074	(81,925)

Other income (expenses):
Interest income and other financial gains	80,119	86,590	24,553	28,462
Interest expense and other financial losses	(75,083)	(44,689)	(24,522)	(14,451)
Foreign currency (losses) gains	(32,524)	(1,899)	(30,435)	987
Net income (loss) before income tax expense	125,330	(44,272)	52,670	(66,927)

Income tax expense	(75,457)	(73,729)	(37,635)	(79,155)
Net income (loss)	$ 49,873	$ (118,001)	$ 15,035	$ (146,082)


	Nine Months Ended September 30,		Three Months Ended September 30,
	2020	2019	2020	2019
Basic EPS
Basic net income (loss)
Available to shareholders per common share	$ 0.94	$ (2.60)	$ 0.28	$ (2.96)
Weighted average of outstanding common shares	49,713,621	48,350,165	49,720,854	49,710,723
Diluted EPS
Diluted net income (loss)
Available to shareholders per common share	$ 0.94	$ (2.60)	$ 0.28	$ (2.96)
Weighted average of outstanding common shares	49,713,621	48,350,165	49,720,854	49,710,723

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

Table of Contents

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Comprehensive Income

For the nine and three-month periods ended September 30, 2020 and 2019

(In thousands of U.S. dollars)

(Unaudited)


	Nine Months Ended September 30,		Three Months Ended September 30,
	2020	2019	2020	2019
Net income (loss)	$ 49,873	$ (118,001)	$ 15,035	$ (146,082)
Other comprehensive (loss) income, net of income tax:
Currency translation adjustment	(102,763)	(22,195)	(2,113)	(25,548)
Unrealized gains on hedging activities	5,550	—	572	—
Unrealized net gains (loss) on available for sale investments	—	2,062	(1,061)	(442)
Less: Reclassification adjustment for gains from accumulated other comprehensive (loss) income	5,627	2,729	1,548	—
Net change in accumulated other comprehensive (loss) income, net of income tax	(102,840)	(22,862)	(4,150)	(25,990)
Total Comprehensive (loss) income	$ (52,967)	$ (140,863)	$ 10,885	$ (172,072)

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

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MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Equity

For the nine and three-month periods ended September 30, 2020 and 2019

(In thousands of U.S. dollars)

(Unaudited)


											Accumulated
					Additional						other
	Common stock				paid-in		Treasury		Retained		comprehensive		Total
	Shares		Amount		capital		Stock		Earnings		loss		Equity
Balance as of December 31, 2019	49,710	$	50	$	2,067,869	$	(720)	$	322,592	$	(406,671)	$	1,983,120
Changes in accounting standards	—		—		—		—		(4,570)		—		(4,570)
Balance as of December 31, 2019 Restated	49,710	$	50	$	2,067,869	$	(720)	$	318,022	$	(406,671)	$	1,978,550
Stock-based compensation — restricted shares issued	—		—		179		—		—		—		179
Net loss	—		—		—		—		(21,109)		—		(21,109)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)	—		—		—		—		(1,000)		—		(1,000)
Other comprehensive loss	—		—		—		—		—		(90,053)		(90,053)
Balance as of March 31, 2020	49,710	$	50	$	2,068,048	$	(720)	$	295,913	$	(496,724)	$	1,866,567

Stock-based compensation — restricted shares issued	1		—		187		—		—		—		187
Common Stock repurchased	(1)		—		—		(720)		—		—		(720)
Capped Call	—		—		(104,095)		—		—		—		(104,095)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)	—		—		—		—		(1,000)		—		(1,000)
Net income	—		—		—		—		55,947		—		55,947
Other comprehensive loss	—		—		—		—		—		(8,637)		(8,637)
Balance as of June 30, 2020	49,710	$	50	$	1,964,140	$	(1,440)	$	350,860	$	(505,361)	$	1,808,249

Capped Call	—		—		(82,682)		—		—		—		(82,682)
Common Stock repurchased	(37)		—		—		(38,951)		—		—		(38,951)
Stock-based compensation — restricted shares issued	—		—		182		—		—		—		182
Common Stock issued — converted Preferred Shares	104		—		49,344		—		—		—		49,344
Redeemable convertible preferred stock dividend distribution ($9.99 per share)	—		—		—		—		(928)		—		(928)
Net Income	—		—		—		—		15,035		—		15,035
Other comprehensive loss	—		—		—		—		—		(4,150)		(4,150)
Balance as of September 30, 2020	49,777	$	50	$	1,930,984	$	(40,391)	$	364,967	$	(509,511)	$	1,746,099

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											Accumulated
					Additional						other
	Common stock				paid-in		Treasury		Retained		comprehensive		Total
	Shares		Amount		capital		Stock		Earnings		loss		Equity
Balance as of December 31, 2018	45,203	$	45		224,800	$	—	$	503,432	$	(391,577)	$	336,700

Common Stock issued	4,116		4		1,866,496		—		—		—		1,866,500
Exercise of convertible notes	—		—		2		—		—		—		2
Unwind Capped Call	—		—		3		—		—		—		3
Net income	—		—		—		—		11,864		—		11,864
Amortization of Preferred Stock discount	—		—		5,841		—		(5,841)		—		—
Other comprehensive loss	—		—		—		—		—		(1,011)		(1,011)
Balance as of March 31, 2019	49,319	$	49	$	2,097,142	$	—	$	509,455	$	(392,588)	$	2,214,058

Transaction Costs	—		—		715		—		—		—		715
Exercise of convertible notes	—		—		2		—		—		—		2
Capped Call	—		—		(88,362)		—		—		—		(88,362)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)	—		—		—		—		(1,000)		—		(1,000)
Net income	—		—		—		—		16,217		—		16,217
Other comprehensive income	—		—		—		—		—		4,139		4,139
Balance as of June 30, 2019	49,319	$	49	$	2,009,497	$	—	$	524,672	$	(388,449)	$	2,145,769

Exercise of Convertible Notes	523		1		65,952		—		—		—		65,953
Exercise of capped call option - shares retirement	(132)		—		30		—		—		—		30
Redeemable convertible preferred stock dividend distribution ($9.99 per share)	—		—		—		—		(1,000)		—		(1,000)
Stock-based compensation - restricted shares issued	1		—		214		—		—		—		214
Common Stock repurchased	(1)		—		—		(720)		—		—		(720)
Net loss	—		—		—		—		(146,082)		—		(146,082)
Other comprehensive loss	—		—		—		—		—		(25,990)		(25,990)
Balance as of September 30, 2019	49,710	$	50	$	2,075,693	$	(720)	$	377,590	$	(414,439)	$	2,038,174

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

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MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the nine-month periods ended September 30, 2020 and 2019

(In thousands of U.S. dollars)

(Unaudited)


	Nine Months Ended September 30,
	2020	2019

Cash flows from operations:
Net income (loss)	$ 49,873	$ (118,001)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Unrealized devaluation loss, net	59,471	45,857
Depreciation and amortization	72,436	52,518
Accrued interest	(37,550)	(39,550)
Non cash interest, convertible notes amortization of debt discount and amortization of debt issuance costs and other charges	94,492	73,077
Financial results on derivative instruments	(26,535)	(3,308)
Stock-based compensation expense — restricted shares	548	214
LTRP accrued compensation	75,142	48,313
Sale of fixed assets and intangible assets	3,814	—
Deferred income taxes	(58,485)	29,640
Changes in assets and liabilities:
Accounts receivable	51,250	1,464
Credit cards receivables and other means of payments	(351,397)	65,968
Prepaid expenses	15,627	9,338
Inventory	(40,322)	(5,939)
Other assets	(18,240)	(24,259)
Payables and accrued expenses	357,804	88,918
Funds payable to customers	711,987	95,079
Other liabilities	(69,829)	18,113
Interest received from investments	35,909	35,375
Net cash provided by operating activities	925,995	372,817
Cash flows from investing activities:
Purchase of investments	(3,600,715)	(3,262,637)
Proceeds from sale and maturity of investments	3,081,643	2,240,468
Receipts from settlements of derivative instruments	17,779	—
Payment for acquired businesses, net of cash acquired	(6,937)	—
Receipts from the sale of fixed assets and intangible assets	274	—
Purchases of intangible assets	(93)	(50)
Changes in principal of loans receivable, net	(170,284)	(150,442)
Purchases of property and equipment	(159,797)	(100,732)
Net cash used in investing activities	(838,130)	(1,273,393)
Cash flows from financing activities:
Proceeds from loans payable and other financial liabilities	1,890,156	171,603
Payments on loans payable and other financing liabilities	(1,415,845)	(104,062)
Payment of finance lease obligations	(2,499)	(1,416)
Purchase of convertible note capped call	(186,777)	(88,362)
Dividends paid of preferred stock	(3,000)	(1,844)
Common Stock repurchased	(39,671)	(720)
Payments on convertible notes	—	(25)
Proceeds from issuance of convertible redeemable preferred stock, net	—	98,688
Proceeds from issuance of common stock, net	—	1,867,215
Net cash provided by financing activities	242,364	1,941,077
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents	(157,524)	(48,231)
Net increase in cash, cash equivalents, restricted cash and cash equivalents	172,705	992,270
Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period	$ 1,451,424	$ 464,695
Cash, cash equivalents, restricted cash and cash equivalents, end of the period	$ 1,624,129	$ 1,456,965

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

Table of Contents

1. Nature of Business

MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in the state of Delaware, in the United States of America in October 1999. MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of necessary online and technology tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for vehicles, services and real estate), which allows users to buy and sell in most of Latin America.

Through Mercado Pago, the FinTech solution, MercadoLibre enables individuals and businesses to send and receive online payments; through Mercado Envios, MercadoLibre facilitates the shipping of goods from sellers to buyers; through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their product and services on the web; through Mercado Shops, MercadoLibre allows users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model; through Mercado Credito, MercadoLibre extends loans to certain merchants and consumers; and through Mercado Fondo, MercadoLibre allows users to invest funds deposited in their Mercado Pago accounts.

As of September 30, 2020, MercadoLibre, through its wholly-owned subsidiaries, operated online ecommerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates its FinTech solution in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia, Chile and Uruguay.

2. Summary of significant accounting policies

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). These interim condensed consolidated financial statements are stated in U.S. dollars, except where otherwise indicated. Intercompany transactions and balances with subsidiaries have been eliminated for consolidation purposes.

Substantially all net revenues, cost of net revenues and operating expenses are generated in the Company’s foreign operations. Long-lived assets, intangible assets and goodwill located in the foreign jurisdictions totaled $394,388 thousands and $345,204 thousands as of September 30, 2020 and December 31, 2019, respectively.

These interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of September 30, 2020 and December 31, 2019. These consolidated financial statements include the Company’s consolidated statements of income, comprehensive income and equity for the nine and three-month periods ended September 30, 2020 and 2019 and statements of cash flows for the nine-months periods ended September 30, 2020 and 2019. These interim condensed consolidated financial statements include all normal recurring adjustments that Management believes are necessary to fairly state the Company’s financial position, operating results and cash flows.

Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2019, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated statements of income, comprehensive income, equity and cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. For a more detailed discussion of the Company’s significant accounting policies, see note 2 to the financial statements in the Company’s Form 10-K for the year ended December 31, 2019. During the nine-month period ended September 30, 2020, there were no material updates made to the Company’s significant accounting policies, except for the adoption of ASC 326 as of January 1, 2020. See Note 2 to these interim condensed consolidated financial statements for more details.

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Revenue recognition

Revenue recognition criteria for the services provided and goods sold by the Company are described in note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Contract Balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Receivables represent amounts invoiced and revenue recognized prior to invoicing when the Company has satisfied the performance obligation and has the unconditional right to payment. Receivables are presented net of allowance for doubtful accounts, loans receivable and chargebacks of $86,076 thousands and $38,079 thousands as of September 30, 2020 and December 31, 2019, respectively.

Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period in accordance with ASC 606. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following reporting period. Deferred revenue as of December 31, 2019 and 2018 was $16,590 thousands and $5,918 thousands, respectively, of which $11,229 thousands and $4,954 thousands were recognized as revenue during the nine-month periods ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, total deferred revenue was $27,573 thousands, mainly due to fees related to listing and optional feature services billed and loyalty programs that are expected to be recognized as revenue in the coming months.

Allowances for doubtful accounts on accounts receivable and loans receivable

Since January 1, 2020 the Company maintains allowances for doubtful accounts for Management’s estimate of current expected credit losses (“CECL”) that may result if customers do not make the required payments.

Measurement of current expected credit losses

The company estimates its allowance for credit losses as the lifetime expected credit losses of the accounts receivables mentioned above. The CECL represent the present value of the uncollectible portion of the principal, interest, late fees, and other allowable charges.

Loans Receivable

Loans Receivable in this portfolio include the products that the company offers to: 1) on-line merchant, 2) in-store merchant and 3) consumers.

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

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

The probability of default is an estimation of the likelihood that a loan receivable will default over a given time horizon. Probability of default models are estimated using a transition matrix method; these matrices are constructed using roll rates and then transformed, taking into account the expected future delinquency rate (forward-looking models). Therefore, the models include macroeconomic outlook or projections and recent performance. With this model, the Company estimates marginal monthly default probabilities for each delinquency bucket, type of product and country. Each marginal monthly probability of default represents a different possible scenario of default.

The exposure at default is equal to the receivables’ expected outstanding principal, interest and other allowable balances. The Company estimates the exposure at default that the portfolio of loans would have in each possible moment of default, meaning for each possible scenario mentioned above.

The loss given default is the percentage of the exposure at default that is not recoverable. The Company estimates this percentage using the transition matrix method mentioned above and the portfolio segment´s interest rate.

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The measurement of CECL is based on probability-weighted scenarios (probability of default for each month), in view of past events (roll rates), current conditions and adjustments to reflect the reasonable and supportable forecast of future economic conditions which were affected, among other factors, by the COVID-19 pandemic. The Company will continue to monitor the impact of the pandemic on expected credit losses estimates.

The Company writes off loans receivable when the customer balance becomes 90 days past due.

Accounts Receivable

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

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

Cash and cash equivalents, restricted cash and cash equivalents, short-term investments and credit cards receivable and other means of payment

The Company’s management assesses balances for credit losses included in cash and cash equivalents, restricted cash and cash equivalents, short-term investments (measured at amortized cost) and credit cards receivable and other means of payment, based on a review of the average period for which the financial asset is held, credit ratings of the financial institutions and probability of default and loss given default models.

The Company has arrangements with some unaffiliated entities under which MercadoLibre users are able to fund their Mercado Pago accounts by depositing an equivalent amount with the unaffiliated entity. In some of these arrangements, MercadoLibre credits the Mercado Pago account before the unaffiliated entity transfers the funds to MercadoLibre to settle the transaction. The amounts pending settlement are recognized in the balance sheet as credit cards receivable and other means of payment. In June 2020, the Company became aware that had accumulated significant receivables from one such unaffiliated entity in Argentina. The aging of these receivables exceeded the expected aging for transactions of this kind, hence, the Company recorded $27,006 thousands loss on doubtful accounts.

Foreign currency translation

All of the Company’s consolidated foreign operations use the local currency as their functional currency, except for Argentina, which has used the U.S. dollar as its functional currency since July 1, 2018, as described below. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from their local currencies into U.S. dollars by using year-end exchange rates while income and expense accounts are translated at the average monthly rates in effect during the year, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive loss.

Argentine currency status

As of July 1, 2018, the Company transitioned the Argentinian operations to highly inflationary status in accordance with U.S. GAAP, and changed the functional currency for Argentine subsidiaries from Argentine Pesos to U.S. dollars, which is the functional currency of their immediate parent company.

In the second half of 2019, the Argentine government reinstituted exchange controls restricting the purchase of foreign currencies. As a result of these exchange controls, many Argentine entities use a trading mechanism commonly known as the Blue Chip Swap, in which an entity buys U.S. dollar denominated securities in Argentina using Argentine peso, transfers the securities outside Argentina and sells the securities for U.S. dollars. The Blue Chip Swap Rate is the implicit exchange rate resulting from the Blue Chip Swap transaction. The Blue Chip Swap Rate has diverged significantly from Argentina’s official exchange rate. As of September 30, 2020, the Blue Chip Swap rate was 91.2% higher than Argentina’s official exchange rate.

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The Company will continue to use Argentina’s official exchange rate to record the accounts of Argentine subsidiaries. The following table sets forth the assets, liabilities and net assets of the Company’s Argentine subsidiaries, before intercompany eliminations, as of September 30, 2020 and December 31, 2019:


	September 30,	December 31,
	2020	2019
	(In thousands)
Assets	$ 1,213,172	$ 805,605
Liabilities	997,615	580,402
Net Assets	$ 215,557	$ 225,203

Derivative Financial Instruments

The Company’s operations are in various foreign currencies and consequently are exposed to foreign currency risk. The Company uses derivative instruments to reduce the volatility of earnings and cash flows which were designated as hedges. All outstanding derivatives are recognized in the Company’s consolidated balance sheet at fair value. The effective portion of a designated derivative’s gain or loss in a cash flow hedge is initially reported as a component of accumulated other comprehensive (loss) income and is subsequently reclassified into the financial statement line item in which the variability of the hedged item is recorded in the period the hedging transaction affects earnings.

The Company also hedges its economic exposure to foreign currency risk related to foreign currency denominated monetary assets and liabilities with foreign derivative currency contracts which were not designated as hedges. The gains and losses on the foreign exchange derivative contracts economically offset gains and losses on certain foreign currency denominated monetary assets and liabilities recognized in earnings. Accordingly, these outstanding non-designated derivatives are recognized in the Company’s consolidated balance sheet at fair value, and changes in fair value from these contracts are recorded in other income (expense), net in the consolidated statement of income.

Treasury Stock

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

Income taxes

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

A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. Accordingly, Management periodically assesses the need to establish a valuation allowance for deferred tax assets considering positive and negative objective evidence related to the realization of the deferred tax assets. Management’s judgments related to this assessment consider, among other factors, the nature, frequency and magnitude of current and cumulative losses on an individual subsidiary basis, projections of future taxable income, the duration of statutory carryforward periods, as well as feasible tax planning strategies, which would be employed by the Company to prevent tax loss carryforwards from expiring unutilized. Based on Management’s assessment of available objective evidence and considering the future effect of the Company’s initiatives to capture long-term business opportunities, the Company accounted for a valuation allowance in certain subsidiaries in its Mexican operations of $24,840 thousands and $7,529 thousands for the nine and three-month periods ended September 30, 2020, respectively.

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On August 17, 2011, the Argentine government issued a software development law and on September 9, 2013, the Argentine government issued a regulatory decree establishing the requirements to become a beneficiary of the software development law, including a requirement to comply with annual incremental ratios related to exports of services and research and development. The law expired on December 31, 2019.

The Argentine Industry Secretary approved the Company’s application for eligibility under the law for the Company’s Argentine subsidiary, MercadoLibre S.R.L. As a result, the Company’s Argentine subsidiary was granted a tax holiday retroactive from September 18, 2014. A portion of the benefits obtained is a 60% relief of total income tax related to software development activities and a 70% relief of payroll taxes related to software development activities.

As a result of the Company’s eligibility under the law, it recorded an income tax benefit of $15,935 thousands and $11,842 thousands during the nine and three-month periods ended September 30, 2019, respectively. The aggregate per share benefit of the Argentine tax holiday amounted to $0.33 and $0.24 for the nine and three-month periods ended September 30, 2019, respectively. Furthermore, the Company recorded a labor cost benefit of $6,473 thousands and $1,836 thousands during the nine and three-month periods ended September 30, 2019, respectively. Additionally, $1,569 thousands and $958 thousands were accrued to pay software development law audit fees during the nine and three-month periods ended September 30, 2019, respectively.

On June 10, 2019, the Argentine government enacted Law No. 27,506 (knowledge-based economy promotional regime), which established a regime that provides certain tax benefits for companies that meet specific criteria, such as companies that derive at least 70% of their revenues from certain specified activities related to the knowledge-based economy. Law No. 27,506 allows companies currently benefiting from the software development law, to apply for tax benefits under Law No. 27,506, which will be effective from January 1, 2020 to December 31, 2029.

The above-mentioned regime was suspended on January 20, 2020 through a resolution issued by Argentina’s Ministry of Productive Development until new rules for the application of the knowledge-based economy promotional regime were issued.

On June 25, 2020, the Chamber of Deputies passed changes to the knowledge-based economy promotional regime. The Chamber of Senates proposed further amendments, which were returned to the Chamber of Deputies and finally approved on October 7, 2020. The approved regime is effective as of January 1, 2020 until December 31, 2029. Further regulations related to the application of the regime are expected to be released.

Based on the amended promotional regime, companies that meet new specified criteria shall be entitled to: i) a reduction of the income tax burden of 60% (60% for micro and small enterprises, 40% for medium-sized enterprises and 20% for large enterprises) over the promoted activities for each fiscal year, applicable to both Argentine source income and foreign source income, ii) stability of the benefits established by the knowledge-based economy promotional regime (as long as the beneficiary is registered and in good standing), iii) a non-transferable tax credit bond amounting to 70% (which can be up to 80% in certain specific cases) of the Company’s contribution to the social security regime of every employee whose job is related to the promoted activities (caps on the number of employees are applicable). Such bonds can be used within 24 months from their issue date (which period can be extended for an additional 12 months in certain cases) to offset certain federal taxes, such as value-added tax, but they cannot be used to offset income tax.

The Company is currently assessing whether it will be eligible to benefit from the new law and related tax benefits, such eligibility remaining subject to Argentine government approval.

Fair value option applied to certain financial instruments

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

The Company has elected to measure certain financial assets at fair value with impact on the statement of income from January 1, 2019 for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in consolidated statement of income and consolidated statement of other comprehensive income and to better reflect the financial model applied for selected instruments.

The Company’s election of the fair value option applies to the: i) Brazilian federal government bonds and ii) U.S. treasury notes. As result of the election of the fair value option, the Company recognized gains in interest income and other financial gains of $8,912 thousands and $3,157 thousands as of September 30, 2020 and 2019, respectively.
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Accumulated other comprehensive loss

The following table sets forth the Company’s accumulated other comprehensive loss as of September 30, 2020 and December 31, 2019:


	September 30,	December 31,
	2020	2019
	(In thousands)
Accumulated other comprehensive loss:
Foreign currency translation	$ (510,862)	$ (408,099)
Unrealized gains on investments	—	2,029
Unrealized gains (losses) on hedging activities	1,812	(250)
Estimated tax expense on unrealized gains	(461)	(351)
	$ (509,511)	$ (406,671)

The following tables summarize the changes in accumulated balances of other comprehensive loss for the nine-months ended September 30, 2020:



	Unrealized	Unrealized	Foreign	Estimated tax
	(Losses) Gains on	(Losses) Gains on	Currency	(expense)
	hedging activities, net	Investments	Translation	benefit	Total
		(In thousands)
Balances as of December 31, 2019	$ (250)	$ 2,029	$ (408,099)	$ (351)	$ (406,671)
Other comprehensive income (loss) before reclassifications	8,047	—	(102,763)	(2,497)	(97,213)
Amount of loss (gain) reclassified from accumulated other comprehensive loss	(5,985)	(2,029)	—	2,387	(5,627)
Net current period other comprehensive income (loss)	2,062	(2,029)	(102,763)	(110)	(102,840)
Ending balance	$ 1,812	$ —	$ (510,862)	$ (461)	$ (509,511)



	Amount of (Loss) Gain
	Reclassified from
Details about Accumulated	Accumulated Other
Other Comprehensive Loss	Comprehensive	Affected Line Item
Components	Loss	in the Statement of Income
	(In thousands)
Unrealized gains on investments	$ 2,029	Interest income and other financial gains
Unrealized gains on hedging activities	5,985	Cost of net revenues
Estimated tax expense on unrealized gains	(2,387)	Income tax expense
Total reclassifications for the period	$ 5,627	Total, net of income taxes

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Use of estimates

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, accounting for allowances for doubtful accounts and chargeback provisions, allowance for loans receivables, recoverability of goodwill, intangible assets with indefinite useful lives and deferred tax assets, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention program, fair value of convertible debt, fair value of investments, fair value of derivative instruments, recognition of income taxes and contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements. Actual results could differ from those estimates.

Recently Adopted Accounting Standards

On June 16, 2016 the FASB issued the ASU 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of credit losses on financial instruments”. This update amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this update eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this topic will require that credit losses be presented as an allowance rather than as a write-down. The Company adopted this standard effective January 1, 2020 using a modified retrospective approach transition method, resulting in a decrease of $4,570 thousands (net of income tax) to the opening balance of retained earnings.

On August 29, 2018 the FASB issued the ASU 2018-15 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)”. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s financial statements.

Recently issued accounting pronouncements not yet adopted

On December 18, 2019 the FASB issued the ASU 2019-12 “Income taxes (Topic 740)—Simplifying the accounting for income taxes”. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles and also improve consistent application by clarifying and amending existing guidance, such as franchise taxes and interim recognition of enactment of tax laws or rate changes. The amendments in this update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company´s financial statements.

On August 5, 2020 the FASB issued the ASU 2020-06 “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40)”. The amendments in this update address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, accounting models for specific features are removed and amendments to the disclosure requirements are included. For contracts in an entity’s own equity, simplifies the settlement assessment by removing some requirements. Additionally, the amendments in this update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements.

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3. Net income (loss) per share

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

On June 30, 2014, the Company issued $330 million of 2.25% Convertible Senior Notes due 2019 and on August 24, 2018 and August 31, 2018 the Company issued an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (see Note 11 to these interim condensed consolidated financial statements). Additionally, on March 29, 2019 the Company issued Preferred Stock (see Note 12 to these interim condensed consolidated financial statements). The conversion of these notes and the Preferred Stock are included in the calculation for diluted earnings per share utilizing the “if converted” method. Accordingly, conversion of these Notes and the redeemable convertible preferred stock are not assumed for purposes of computing diluted earnings per share if the effect is antidilutive.

The denominator for diluted net income (loss) per share for the nine and three-month periods ended September 30, 2020 and 2019 does not include any effect from the 2019 Notes Capped Call Transactions or the 2028 Notes Capped Call Transactions (as defined in Note 11) because it would be antidilutive. In the event of conversion of any or all of the 2028 Notes, the shares that would be delivered to the Company under the Capped Call Transactions (as defined in Note 11) are designed to partially neutralize the dilutive effect of the shares that the Company would issue under the Notes. See Note 11 to these interim condensed consolidated financial statements and Note 15 of the financial statements as of December 31, 2019 on Form 10-K for more details. For the nine and three-month periods ended September 30, 2020 and 2019, the effects of the conversion of the Notes and the redeemable convertible preferred stock would have been antidilutive and, as a consequence, they were not factored into the calculation of diluted earnings per share.

Net income (loss) per share of common stock is as follows for the nine and three-month periods ended September 30, 2020 and 2019:


	Nine Months Ended September 30,				Three Months Ended September 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
	Basic	Diluted	Basic	Diluted	Basic	Diluted	Basic	Diluted
Net income (loss) per common share	$ 0.94	$ 0.94	$ (2.60)	$ (2.60)	$ 0.28	$ 0.28	$ (2.96)	$ (2.96)

Numerator:
Net income (loss)	$ 49,873	$ 49,873	$ (118,001)	$ (118,001)	$ 15,035	$ 15,035	$ (146,082)	$ (146,082)
Amortization of redeemable convertible preferred stock	—	—	(5,841)	(5,841)	—	—	—	—
Dividends on preferred stock	(2,928)	(2,928)	(2,000)	(2,000)	(928)	(928)	(1,000)	(1,000)
Net income corresponding to common stock	$ 46,945	$ 46,945	$ (125,842)	$ (125,842)	$ 14,107	$ 14,107	$ (147,082)	$ (147,082)

Denominator:
Weighted average of common stock outstanding for Basic earnings per share	49,713,621	—	48,350,165	—	49,720,854	—	49,710,723	—
Adjusted weighted average of common stock outstanding for Diluted earnings per share	—	49,713,621	—	48,350,165	—	49,720,854	—	49,710,723

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4. Cash, cash equivalents, restricted cash and cash equivalent and investments

The composition of cash, cash equivalents, restricted cash and cash equivalents, short-term and long-term investments is as follows:


	September 30,	December 31,
	2020	2019
	(In thousands)
Cash and cash equivalents	$ 1,139,703	$ 1,384,740
Restricted cash and cash equivalents
Securitization Transactions	$ 29,274	$ 37,424
Sovereign Debt Securities (Secured lines of credit guarantee)	—	29,260
Bank account (Argentine Central Bank regulation)	226,689	—
Bank collateral account (*)	224,995	—
Time Deposits	3,333	—
Cash in bank account	135	—
Total restricted cash and cash equivalents	$ 484,426	$ 66,684
Total cash, cash equivalents, restricted cash and cash equivalents (**)	$ 1,624,129	$ 1,451,424

Short-term investments
Time Deposits	$ 315,930	$ 189,660
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)	591,860	506,175
Sovereign Debt Securities (Secured lines of credit guarantee)	71,786	16,623
Sovereign Debt Securities	1,207,903	884,720
Corporate Debt Securities	—	63
Total short-term investments	$ 2,187,479	$ 1,597,241

Long-term investments
Sovereign Debt Securities	$ —	$ 260,320
Corporate Debt Securities	—	173
Other Investments	6,890	3,490
Total long-term investments	$ 6,890	$ 263,983

(*) Cash deposited and owned by the Company under the sole control and dominion of escrow agents as collateral of loans granted to a Brazilian subsidiary with due date in October 2020.

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

Regulation issued by Central Bank of Argentina (“CBA”)

a)In January 2020, the CBA enacted regulations related to payment service providers that applies to Fintech companies that are not financial institutions, but nevertheless provide payment services in at least one of the processes of the payments system. On July 7, 2020, the CBA approved the registration of the Argentine subsidiary in the registry for payment service providers. These regulations sets forth certain rules that require payment services providers to, among other things, (i) deposit and maintain users’ funds in specific banks’ accounts, payable on demand; (ii) implement a monthly reporting regime with the CBA; (iii) segregate information related to users’ investments funds; (iv) maintain different bank accounts to segregate the Company’s funds from users’ funds; and (v) introduce clarifications on advertising and documents about the standard terms and conditions of the payment service provider. As of September 30, 2020, in accordance with the regulation, the Company held $226,689 thousands in a bank account, payable on demand.

b)In October 2020, the CBA issued a regulation that applies to non-financial loan providers. In accordance with this regulation, the Company must register in the "Registry of other non-financial loan providers" before December 1, 2020 and comply with a periodic information report within the framework of a monthly information regime as from March 1, 2021. In turn, the regulation establishes that the Company must comply with the obligations established by CBA rules, regarding, among other things: (i) interest rates in loan operations; (ii) protection of users of financial services; (iii) communication by electronic means for the care of the environment. The regulation establishes the following application dates: the obligations established in terms of interest rates will be in force on January 1, 2021; provisions established in matters of protection to users of financial services and communication by electronic means for the care of the environment will be applicable on February 1, 2021.
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Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)

On November 1, 2018, the Company obtained approval from the Central Bank of Brazil to operate as an authorized payment institution. With this authorization, Mercado Pago in Brazil is subject to the supervision of the Central Bank of Brazil and must fully comply with all obligations established by current regulations. Among other obligations, the regulations require authorized payment institutions to hold any electronic balance in a payment institution account in either a specific account of the Central Bank of Brazil that does not pay interest or Brazilian federal government bonds registered with the “Sistema Especial de Liquidacao e Custodia.” 100% of electronic funds were required to be deposited as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020 and December 31, 2019, in accordance with the regulation, the Company held $591,860 thousands and $506,175 thousands deposited in Brazilian federal government bonds, respectively, as a mandatory guarantee.

5. Loans receivable, net

The Company manages loans receivable as “On-line merchant”, “Consumer” and “In-store merchant”. As of September 30, 2020 and December 31, 2019, Loans receivable, net were as follows:



		September 30,		December 31,
		2020		2019
	(In thousands)
On-line merchant	$	137,386	$	130,102
Consumer		117,540		60,179
In-store merchant		29,284		18,707
Loans receivable		284,210		208,988
Allowance for uncollectible accounts		(30,002)		(20,444)
Loans receivable, net	$	254,208	$	188,544

Current	$	239,135	$	182,105
Non-current		15,073		6,439
Loans receivable, net	$	254,208	$	188,544

The credit quality analysis of loans receivable was as follows:


		September 30,		December 31,
		2020		2019
	(In thousands)
1-30 days past due	$	18,734	$	20,430
31-60 days past due		5,275		6,916
61 -90 days past due		4,937		7,580
Total past due		28,946		34,926
To become due		255,264		174,062
Total	$	284,210	$	208,988

The following table summarizes the allowance for uncollectible accounts activity during the nine-month period ended September 30, 2020 and 2019:



	September 30,
		2020		2019 (1)
	(In thousands)
Balance at beginning of year	$	20,444	$	6,636
Adoption of ASC 326 (2)		4,977		-
Charged/credited to Net income (loss)		49,033		48,892
Charges/Utilized /Currency translation adjustments/Write-offs		(44,452)		(10,934)
Balance at end of period	$	30,002	$	44,594


(1)	The comparative information has not been restated and continues to be reported under the accounting standard in effect during 2019.
(2)	Cumulative pre-tax adjustments recorded to retained earnings as of January 1, 2020.

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6. Business combinations, goodwill and intangible assets

Business combinations

Acquisition of a software development company

In March 2020, the Company, through its subsidiary Meli Participaciones S.L., completed the acquisition of 100% of the equity interest of Kiserty S.A. and its subsidiaries, which is a software development company located and organized under the law of Uruguay. The objective of the acquisition was to enhance the capabilities of the Company in terms of software development.

The aggregate purchase price for the acquisition was $10,899 thousands, measured at its fair value amount, which included: (i) the total cash payment of $8,500 thousands at the time of closing; (ii) an escrow of $225 thousands and (iii) a contingent additional cash consideration up to $2,174 thousands.

The Company’s consolidated statement of income includes the results of operations of the acquired business as from March 9, 2020. The net income before intercompany eliminations of the acquired Company included in the Company’s consolidated statement of income since the acquisition amounted to $1,054 thousands for the period ended September 30, 2020.

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

The purchase price was allocated based on the measurement of the fair value of assets acquired and liabilities assumed considering the information available as of the initial accounting date. The valuation of identifiable intangible assets acquired reflects Management’s estimates based on the use of established valuation methods.

The Company recognized goodwill for this acquisition based on Management’s expectation that the acquired business will improve the Company’s business. Arising goodwill was allocated to each of the segments identified by the Company’s Management, considering the synergies expected from this acquisition and it is expected that the acquisition will contribute to the earnings generation process of such segments. Goodwill arising from this acquisition is not deductible for tax purposes.

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

Goodwill and intangible assets

The composition of goodwill and intangible assets is as follows:


	September 30,	December 31,
	2020	2019
	(In thousands)
Goodwill	$ 79,064	$ 87,609
Intangible assets with indefinite lives
- Trademarks	7,253	8,366
Amortizable intangible assets
- Licenses and others	4,715	5,320
- Non-compete agreement	3,276	2,703
- Customer list	12,909	13,900
- Trademarks	7,187	4,723
Total intangible assets	$ 35,340	$ 35,012
Accumulated amortization	(21,110)	(20,737)
Total intangible assets, net	$ 14,230	$ 14,275

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Goodwill

The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2020 and the year ended December 31, 2019 are as follows:


	Nine Months Ended September 30, 2020
	Brazil	Argentina	Mexico	Chile	Colombia	Other Countries	Total
	(In thousands)
Balance, beginning of the period	$ 29,072	$ 6,991	$ 32,196	$ 14,872	$ 3,312	$ 1,166	$ 87,609
Business Acquisitions	—	3,603	1,062	1,241	1,246	748	7,900
Disposals	(3,480)	—	—	—	—	—	(3,480)
Effect of exchange rates changes	(7,048)	—	(4,495)	(705)	(613)	(104)	(12,965)
Balance, end of the period	$ 18,544	$ 10,594	$ 28,763	$ 15,408	$ 3,945	$ 1,810	$ 79,064


	Year Ended December 31, 2019
	Brazil	Argentina	Mexico	Chile	Colombia	Other Countries	Total
	(In thousands)
Balance, beginning of the year	$ 30,069	$ 6,946	$ 31,340	$ 16,014	$ 3,339	$ 1,175	$ 88,883
Purchase price allocations adjustments	—	45	—	—	—	—	45
Effect of exchange rates changes	(997)	—	856	(1,142)	(27)	(9)	(1,319)
Balance, end of the year	$ 29,072	$ 6,991	$ 32,196	$ 14,872	$ 3,312	$ 1,166	$ 87,609

Intangible assets with definite useful life

Intangible assets with definite useful life are comprised of customer lists, non-compete and non-solicitation agreements, acquired software licenses, and other acquired intangible assets including developed technologies and trademarks. Aggregate amortization expense for intangible assets totaled $1,476 thousands and $896 thousands for the three-month periods ended September 30, 2020 and 2019, respectively, while aggregate amortization expense for intangible assets for the nine-month periods ended September 30, 2020 and 2019 amounted to $3,995 thousands and $3,045 thousands, respectively.

The following table summarizes the remaining amortization of intangible assets (in thousands of U.S. dollars) with definite useful life as of September 30, 2020:


For year ended 12/31/2020		$ 1,085
For year ended 12/31/2021		3,449
For year ended 12/31/2022		1,295
For year ended 12/31/2023		899
Thereafter		249
		$ 6,977

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7. Segment reporting

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

Segment reporting is based on geography as the main basis of segment breakdown in accordance with the criteria, as determined by Management, used to evaluate the Company’s performance. The Company’s segments include Brazil, Argentina, Mexico and other countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Honduras, Nicaragua, El Salvador, Bolivia, Guatemala, Panama, Paraguay, Peru, Uruguay and the United States of America).

Direct contribution consists of net revenues from external customers less direct costs, which include costs of net revenues, product and technology development expenses, sales and marketing expenses and general and administrative expenses over which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, allowances for doubtful accounts, payroll and third-party fees. All corporate related costs have been excluded from the Company’s direct contribution.

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

The Company has re-named and grouped by nature its Revenue streams breakdown, given the increasing importance of its financial business in current and expected future revenue composition, which Management considers shows more meaningful information about the business. As such, the breakdown by revenue stream previously labeled as “Enhanced Marketplace” and “Non-marketplace”, is now presented under the titles of “Commerce” and “Fintech”, respectively. Also, as a result, a group of other services, including classifieds fees, ad sales and other ancillary services, which had historically been included in the “Non-marketplace” line, have, as of January 1, 2020, been included as a part of the “Commerce” revenue stream. Prior-period corresponding figures have been changed accordingly for comparative purposes.

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


	Nine Months Ended September 30, 2020
	Brazil	Argentina	Mexico	Other Countries	Total
	(In thousands)
Net revenues	$ 1,473,466	$ 656,825	$ 371,085	$ 144,785	$ 2,646,161
Direct costs	(1,148,926)	(465,806)	(370,229)	(115,759)	(2,100,720)
Direct contribution	324,540	191,019	856	29,026	545,441

Operating expenses and indirect costs of net revenues					(392,623)
Income from operations					152,818

Other income (expenses):
Interest income and other financial gains					80,119
Interest expense and other financial losses					(75,083)
Foreign currency losses					(32,524)
Net income before income tax expense					$ 125,330

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	Nine Months Ended September 30, 2019
	Brazil	Argentina	Mexico	Other Countries	Total
	(In thousands)
Net revenues	$ 1,033,183	$ 323,892	$ 190,308	$ 74,660	$ 1,622,043
Direct costs	(871,964)	(239,943)	(254,318)	(70,733)	(1,436,958)
Direct contribution	161,219	83,949	(64,010)	3,927	185,085

Operating expenses and indirect costs of net revenues					(269,359)
Loss from operations					(84,274)

Other income (expenses):
Interest income and other financial gains					86,590
Interest expense and other financial losses					(44,689)
Foreign currency losses					(1,899)
Net loss before income tax expense					$ (44,272)


		Three Months Ended September 30, 2020
		Brazil	Argentina	Mexico	Other Countries	Total
		(In thousands)
Net revenues		$ 610,721	$ 284,746	$ 150,382	$ 69,852	$ 1,115,701
Direct costs		(501,544)	(193,373)	(144,914)	(53,212)	(893,043)
Direct contribution		109,177	91,373	5,468	16,640	222,658

Operating expenses and indirect costs of net revenues						(139,584)
Income from operations						83,074

Other income (expenses):
	Interest income and other financial gains					24,553
	Interest expense and other financial losses					(24,522)
	Foreign currency losses					(30,435)
Net income before income tax expense						$ 52,670


		Three Months Ended September 30, 2019
		Brazil	Argentina	Mexico	Other Countries	Total
		(In thousands)
Net revenues		$ 389,941	$ 116,203	$ 71,364	$ 25,523	$ 603,031
Direct costs		(370,704)	(88,542)	(103,517)	(25,845)	(588,608)
Direct contribution		19,237	27,661	(32,153)	(322)	14,423

Operating expenses and indirect costs of net revenues						(96,348)
Loss from operations						(81,925)

Other income (expenses):
	Interest income and other financial gains					28,462
	Interest expense and other financial losses					(14,451)
	Foreign currency gains					987
Net loss before income tax expense						$ (66,927)

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


	September 30,	December 31,
	2020	2019
	(In thousands)
US property and equipment, net	$ 1,395	$ 937
Other countries
Argentina	115,700	100,536
Brazil	121,724	103,571
Mexico	46,488	30,131
Other countries	17,182	9,082
	$ 301,094	$ 243,320
Total property and equipment, net	$ 302,489	$ 244,257

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


	September 30,	December 31,
	2020	2019
	(In thousands)
Other countries goodwill and intangible assets
Argentina	$ 13,223	$ 8,632
Brazil	18,793	30,142
Mexico	32,180	36,003
Chile	22,685	22,237
Other countries	6,413	4,870
Total goodwill and intangible assets	$ 93,294	$ 101,884

Consolidated net revenues by similar products and services for the nine and three-month periods ended September 30, 2020 and 2019 were as follows:


	Nine Months Ended September 30,		Three months Ended September 30,

Consolidated Net Revenues	2020	2019	2020	2019
	(In thousands)		(In thousands)
Commerce (*)	$ 1,686,879	$ 957,029	$ 724,466	$ 346,208
Fintech	959,282	665,014	391,235	256,823
Total	$ 2,646,161	$ 1,622,043	$ 1,115,701	$ 603,031

(*) Includes marketplace fees, shipping fees, ad sales, classified fees and other ancillary services.

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8. Fair value measurement of assets and liabilities

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019:


		Quoted Prices in				Quoted Prices in
	Balances as of	active markets for	Significant other	Unobservable	Balances as of	active markets for	Significant other	Unobservable
	September 30,	identical Assets	observable inputs	inputs	December 31,	identical Assets	observable inputs	inputs
Description	2020	(Level 1)	(Level 2)	(Level 3)	2019	(Level 1)	(Level 2)	(Level 3)
	(In thousands)
Assets
Cash and Cash Equivalents:
Money Market Funds	$ 322,829	$ 322,829	$ —	$ —	$ 688,760	$ 688,760	$ —	$ —
Sovereign Debt Securities	—	—	—	—	32,874	32,874	—	—
Restricted Cash and cash equivalents:
Money Market Funds	13,559	13,559	—	—	32,829	32,829	—	—
Sovereign Debt Securities	—	—	—	—	29,260	29,260	—	—
Investments:
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)	591,860	591,860	—	—	506,175	506,175	—	—
Sovereign Debt Securities	1,279,689	1,279,689	—	—	1,161,663	1,161,663	—	—
Corporate Debt Securities	—	—	—	—	236	178	58	—
Other Assets:
Derivative Instruments	11,858	—	—	11,858	1,249	—	—	1,249
Total Financial Assets	$ 2,219,795	$ 2,207,937	$ —	$ 11,858	$ 2,453,046	$ 2,451,739	$ 58	$ 1,249
Liabilities:
Contingent considerations	$ 4,555	$ —	$ —	$ 4,555	$ 2,201	$ —	$ —	$ 2,201
Long-term retention plan	86,608	—	86,608	—	60,958	—	60,958	—
Derivative Instruments	1,642	—	—	1,642	251	—	—	251
Total Financial Liabilities	$ 92,805	$ —	$ 86,608	$ 6,197	$ 63,410	$ —	$ 60,958	$ 2,452

As of September 30, 2020 and December 31, 2019, the Company’s financial assets valued at fair value consisted of assets valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets); ii) Level 2 inputs: obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date; and iii) Level 3 inputs: valuations based on unobservable inputs reflecting Company assumptions. Fair value of derivative instruments are determined considering the prevailing risk free interest rate and spot exchange rate.

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As of September 30, 2020 and December 31, 2019, the Company’s liabilities were valued at fair value using Level 2 inputs and Level 3 inputs (valuations based on unobservable inputs reflecting Company assumptions). Fair value of contingent considerations are determined based on the probability of achievement of the performance targets arising from each acquisition, as well as the Company’s historical experience with similar arrangements. Fair value of derivative instruments are determined considering the prevailing risk free interest rate and spot exchange rate.

The unrealized net gains or losses on short-term and long-term investments for which the Company has not elected the fair value option are reported as a component of other comprehensive (loss) income. The Company does not anticipate any significant realized losses associated with those investments in excess of the Company’s historical cost.

As of September 30, 2020 and December 31, 2019, the carrying value of the Company’s financial assets and liabilities measured at amortized cost approximated their fair value mainly because of their short-term maturity. These assets and liabilities included cash, cash equivalents, restricted cash and cash equivalents and short-term investments (excluding money markets funds and debt securities), accounts receivable, credit cards receivable and other means of payment, loans receivable, funds payable to customers, other assets (excluding derivative instruments), accounts payable, salaries and social security payable (excluding variable LTRP), taxes payable, provisions and other liabilities (excluding contingent considerations and derivative instruments). As of September 30, 2020 and December 31, 2019, the estimated fair value of the 2028 Notes (liability component), which is based on Level 2 inputs, is $674,991 thousands and $686,366 thousands, respectively, and were determined based on market interest rates. The rest of the loans payable and other financial liabilities approximate their fair value because the effective interest rates are not materially different from market interest rates.

The following table summarizes the fair value level for those financial assets and liabilities of the Company measured at amortized cost as of September 30, 2020 and December 31, 2019:



	Balances as of	Significant other	Balances as of	Significant other
	September 30,	observable inputs	December 31,	observable inputs
	2020	(Level 2)	2019	(Level 2)
	(In thousands)
Assets
Time Deposits	$ 315,930	$ 315,930	$ 189,660	$ 189,660
Accounts receivable, net	40,891	40,891	35,446	35,446
Credit Cards receivable and other means of payment, net	660,402	660,402	379,969	379,969
Loans receivable, net	254,208	254,208	188,544	188,544
Other assets	137,581	137,581	149,218	149,218
Total Assets	$ 1,409,012	$ 1,409,012	$ 942,837	$ 942,837
Liabilities
Accounts payable and accrued expenses	$ 509,095	$ 509,095	$ 372,309	$ 372,309
Funds payable to customers	1,421,825	1,421,825	894,057	894,057
Salaries and social security payable	99,719	99,719	67,686	67,686
Taxes payable	212,729	212,729	60,247	60,247
Loans payable and other financial liabilities (*)	1,236,501	1,320,251	817,491	927,903
Other liabilities	68,740	68,740	124,644	124,644
Total Liabilities	$ 3,548,609	$ 3,632,359	$ 2,336,434	$ 2,446,846

(*) The fair value of the 2028 Notes (including the equity component) is disclosed in Note 11.

As of September 30, 2020 and December 31, 2019, the Company held no direct investments in auction rate securities and does not have any non-financial assets or liabilities measured at fair value.

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As of September 30, 2020 and December 31, 2019, the fair value of money market funds, sovereign and corporate debt securities classified as available for sale securities are as follows:



	September 30, 2020
	Cost	Financial Gains	Financial Losses	Estimated Fair Value

	(In thousands)
Cash and cash equivalents
Money Market Funds	$ 322,829	$ —	$ —	$ 322,829
Total Cash and cash equivalents	$ 322,829	$ —	$ —	$ 322,829

Restricted cash and cash equivalents
Money Market Funds	$ 13,559	$ —	$ —	$ 13,559
Total Restricted cash and cash equivalents	$ 13,559	$ —	$ —	$ 13,559

Short-term investments
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee) (1)	$ 587,983	$ 3,877	$ —	$ 591,860
Sovereign Debt Securities (1)	1,274,654	5,089	(54)	1,279,689
Total Short-term investments	$ 1,862,637	$ 8,966	$ (54)	$ 1,871,549

Total	$ 2,199,025	$ 8,966	$ (54)	$ 2,207,937

(1) Measured at fair value with impact on the consolidated statement of income for the application of the fair value option. (See Note 2 – Fair value option applied to certain financial instruments.)

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	December 31, 2019
	Cost	Gross Unrealized Gains⁽¹⁾	Financial Gains	Financial Losses	Estimated Fair Value

	(In thousands)
Cash and cash equivalents
Money Market Funds	$ 688,760	$ —	$ —	$ —	$ 688,760
Sovereign Debt Securities	32,851	—	23	—	32,874
Total Cash and cash equivalents	$ 721,611	$ —	$ 23	$ —	$ 721,634

Restricted Cash and cash equivalents
Money Market Funds	$ 32,829	$ —	$ —	$ —	$ 32,829
Sovereign Debt Securities (2)	29,227	—	33	—	29,260
Total Restricted Cash and cash equivalents	$ 62,056	$ —	$ 33	$ —	$ 62,089

Short-term investments
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)(3)	$ 504,195	$ —	$ 1,980	$ —	$ 506,175
Sovereign Debt Securities (4)	898,922	2,080	400	(59)	901,343
Corporate Debt Securities	63	—	—	—	63
Total Short-term investments	$ 1,403,180	$ 2,080	$ 2,380	$ (59)	$ 1,407,581

Long-term investments
Sovereign Debt Securities (5)	$ 260,400	$ 2	$ 1	$ (83)	$ 260,320
Corporate Debt Securities	170	3	—	—	173
Total Long-term investments	$ 260,570	$ 5	$ 1	$ (83)	$ 260,493

Total	$ 2,447,417	$ 2,085	$ 2,437	$ (142)	$ 2,451,797

(1)Unrealized gains from securities are attributable to market price movements, net foreign exchange losses and foreign currency translation. Management does not believe any remaining significant unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of December 31, 2019.

(2)Held by the Company’s Argentine subsidiary in guarantee for secured lines of credit. (See Note 11 – Loans payable and other financial liabilities.)

(3)Brazilian government bonds measured at fair value with impact on the consolidated statement of income for the application of the fair value option. (See Note 2 – Investments - Fair value option applied to certain financial instruments.)

(4)Includes $627,842 thousands of U.S treasury notes measured at fair value with impact on the consolidated statement of income for the application of the fair value option (See Note 2 – Investments - Fair value option applied to certain financial instruments.) and $16,623 thousands held by the Company’s Argentine subsidiary in guarantee for secured lines of credit. (See Note 11 – Loans payable and other financial liabilities.)

(5)Includes $260,230 thousands of U.S treasury notes measured at fair value with impact on the consolidated statement of income for the application of the fair value option. (See Note 2 –Investments - Fair value option applied to certain financial instruments.)

The material portion of the Sovereign Debt Securities consists of U.S. Treasury Notes, which carry no significant risk.

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As of September 30, 2020, the estimated fair values (in thousands of U.S. dollars) of money market funds and sovereign debt securities classified by their effective maturities are as follows:


One year or less		2,207,937
Total		$ 2,207,937

9. Commitments and Contingencies

Litigation and Other Legal Matters

The Company is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it considers probable that future costs will be incurred and such costs can be reasonably estimated. Proceeding-related liabilities are based on developments to date and historical information related to actions filed against the Company. As of September 30, 2020, the Company had accounted for estimated liabilities involving proceeding-related contingencies and other estimated contingencies of $8,031 thousands to cover legal actions against the Company in which its Management has assessed the likelihood of a final adverse outcome as probable. Expected legal costs related to litigations are accrued when the legal service is actually provided.

In addition, as of September 30, 2020, the Company and its subsidiaries are subject to certain legal actions considered by the Company’s Management and its legal counsels to be reasonably possible for an estimated aggregate amount up to $21,035 thousands. No loss amounts have been accrued for such reasonably possible legal actions.

Brazilian preliminary injunction against the Brazilian tax authorities

On November 6, 2014, the Brazilian subsidiaries Mercadolivre.com Atividades de Internet Ltda., Ebazar.com.br Ltda, Mercado Pago.com Representações Ltda. and Mercado Libre S.R.L. filed a writ of mandamus and requested a preliminary injunction with the Federal Court of Osasco against the federal tax authority to avoid the IR (income tax) withholding over payments remitted by the Brazilian subsidiaries to the Argentine subsidiary, MercadoLibre S.R.L., for the provision of IT support and assistance services by the latter, and requested reimbursement of the amounts improperly withheld over the course of the preceding five (5) years. The preliminary injunction was granted on the grounds that such withholding violated the convention signed between Brazil and Argentina that prevents double taxation. In August 2015, the injunction was revoked by the first instance judge in an award favorable to the federal tax authority. The Company appealed the decision and deposited with the court the disputed amounts. As of September 30, 2020 the total amount of the deposits were $42,845 thousands (which includes $4,333 thousands of interest) included in non-current other assets of the consolidated balance sheet. In June 2020, the Company’s appeal was dismissed. The Company made a new filing before the same court in July 2020 and plans to appeal the case to the superior courts. Management’s opinion, based on the opinion of external legal counsel, is that the Company’s position is more likely than not to succeed in court based on the technical merits of the tax position. For that reason, the Company has not recorded any expense or liability for the disputed amounts.

Other third parties have from time to time claimed, and others may claim in the future, that the Company was responsible for fraud committed against them, or that the Company has infringed their intellectual property rights. The underlying laws with respect to the potential liability of online intermediaries like the Company are unclear in the jurisdictions where the Company operates. Management believes that additional lawsuits alleging that the Company has violated copyright or trademark laws will be filed against the Company in the future.

Intellectual property and regulatory claims, whether meritorious or not, are time consuming and costly to resolve, require significant amounts of management time, could require expensive changes in the Company’s methods of doing business, or could require the Company to enter into costly royalty or licensing agreements. The Company may be subject to patent disputes, and be subject to patent infringement claims as the Company’s services expand in scope and complexity. In particular, the Company may face additional patent infringement claims involving various aspects of the payments businesses.

From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. The number and significance of these disputes and inquiries are increasing as the Company’s business expands and the Company grows larger.

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Buyer protection program

The Company provides consumers with a buyer protection program (“BPP”) for all transactions completed through the Company’s online payment solution (“Mercado Pago”). This program is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance. The Company’s BPP provides protection to consumers by reimbursing them for the total value of a purchased item and the value of any shipping service paid if it does not arrive or does not match the seller’s description. The Company is entitled to recover from the third-party carrier companies performing the shipping service certain amounts paid under the BPP. Furthermore, in some specific circumstances (i.e. Black Friday, Hot Sale), the Company enters into insurance contracts with third-party insurance companies in order to cover contingencies that may arise from the BPP.

The maximum potential exposure under this program is estimated to be the volume of payments on the Marketplace, for which claims may be made under the terms and conditions of the Company’s BPP. Based on historical losses to date, the Company does not believe that the maximum potential exposure is representative of the actual potential exposure. The Company records a liability with respect to losses under this program when they are probable and the amount can be reasonably estimated.

As of September 30, 2020 and December 31, 2019, Management’s estimate of the maximum potential exposure related to the Company’s buyer protection program is $2,037,501 thousands and $1,365,815 thousands, respectively, for which the Company recorded an allowance of $7,363 thousands and $3,808 thousands, respectively.

Commitments

The Company entered into a purchase commitment with two U.S. suppliers in relation to the purchase of cloud platform services as follows:

a)for a total amount of $240,500 thousands to be fully paid off between June 1, 2020 and May 31, 2024. As of September 30, 2020, the Company paid $14,007 thousands; and

b)for a total amount of $30,000 thousands to be fully paid off between November 24, 2019 and March 23, 2023. As of September 30, 2020, the Company paid $2,392 thousands in relation thereto.

10. Long term retention program (“LTRP”)

The following table summarizes the 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020 long term retention program accrued compensation expense for the nine and three-month periods ended September 30, 2020 and 2019, which are payable in cash according to the decisions made by the Board of Directors:


		Nine Months Ended September 30,				Three Months Ended September 30,
		2020		2019	2020		2019
		(In thousands)			(In thousands)
LTRP 2011		—		26		—		—
LTRP 2012		69		1,827		—		411
LTRP 2013		—		97		—		—
LTRP 2014		125		3,726		—		903
LTRP 2015		6,338		6,410		1,453		1,548
LTRP 2016		13,010		10,063		2,955		2,456
LTRP 2017		13,892		9,530		3,332		2,554
LTRP 2018		6,941		4,708		1,578		1,385
LTRP 2019		16,061		11,926		5,741		6,848
LTRP 2020		18,706		—		8,176		—
Total LTRP	$	75,142	$	48,313	$	23,235	$	16,105

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11. Loans payable and other financial liabilities

The following table summarizes the Company’s Loans payable and other financial liabilities as of September 30, 2020 and December 31, 2019:


							Book value as of

Type of instrument	Currency	Interest	Weighted Average Interest ‎Rate		Maturity		September 30, 2020		December 31, 2019
							(In thousands)
Current loans payable and other financial liabilities:
Loans from banks
Chilean Subsidiary	Chilean Pesos	Fixed	1.68	%	October 2020	$	64,727	$	38,780
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.35	%	March 2021		63,902		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.90	%	October 2020		5,471		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.25	%	May 2021		39,915		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 2.9	%	December 2020		9,004		-
Mexican Subsidiary	Mexican Peso	Variable	TIIE + 2.55	%	October 2020		16,555		-
Argentine Subsidiary	Argentine Pesos	Fixed	32.50	%	November 2020		13,326		-
Uruguayan Subsidiary	Uruguayan Pesos	Fixed	7.51	%	March 2021		8,224		-

Secured lines of credit
Argentine Subsidiary	Argentine Pesos	-	-	%	-		-		49,499
Brazilian Subsidiary (*)	Brazilian Reais	Variable	CDI + 1.00	%	October 2020		100,692		-
Brazilian Subsidiary (*)	Brazilian Reais	Variable	CDI + 1.50	%	October 2020		97,140		-
Brazilian Subsidiary (**)	Brazilian Reais	Variable	CDI + 0.55	%	July 2021		53,516		-

Unsecured lines of credit
Uruguayan Subsidiary	Uruguayan Pesos	Fixed	8.21	%	October 2020		17,870		16,435
Argentine Subsidiary	Argentine Pesos	Fixed	24.06	%	October 2020		69,020		9,645
Chilean Subsidiary	Chilean Pesos	-	-	%	-		-		1,951

Convertible notes							2,249		6,649
Finance lease obligations							2,168		2,008
Credit card collateralized debt							10,679		17,309
Collateralized debt							43,589		43,862
Other lines of credit							117		-
						$	618,164	$	186,138

Non Current loans payable and other financial liabilities:
Convertible notes							588,993		569,305
Finance lease obligations							5,538		7,368
Collateralized debt							23,806		54,680
						$	618,337	$	631,353

(*)	Under the terms of the loans agreements, the Company transferred cash to deposit accounts owned by the Company but under the sole control and dominion of escrow agents as collaterals. These collaterals are shown in Restricted cash and cash equivalents of the consolidated balance sheet.
(**)	Under the terms of the loan agreement, the Company transferred U.S. treasury notes to an account owned by the Company but under the sole control and dominion of the escrow agent as collateral. This collateral is shown in Short-term investments of the consolidated balance sheet.

See Notes 13 and 14 to these interim condensed consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease obligations, respectively.
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Convertible Senior Notes

2.00% Convertible Senior Notes Due 2028

On August 24, 2018, the Company issued $800,000 thousands of 2.00% Convertible Senior Notes due 2028 and issued an additional $80,000 thousand of notes on August 31, 2018 pursuant to the partial exercise of the initial purchasers’ option to purchase such additional notes, for an aggregate principal amount of $880,000 thousands of 2.00% Convertible Senior Notes due 2028 (collectively, the “2028 Notes”). The 2028 Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on February 15 and August 15 of each year, at a rate of 2.00% per annum. The 2028 Notes will mature on August 15, 2028 unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The 2028 Notes may be converted, under specific conditions, based on an initial conversion rate of 2.2553 shares of common stock per $1,000 principal amount of the 2028 Notes (equivalent to an initial conversion price of $443.40 per share of common stock), subject to adjustment as described in the indenture governing the 2028 Notes. For additional information regarding the 2028 Notes please refer to Note 2 and Note 15 to the audited consolidated financial statements for the year ended December 31, 2019, contained in the Company’s Annual Report on Form 10-K filed with the SEC.

During the nine-month period ended September 30, 2020, two Notes were converted, for a total amount of $2 thousands. Additionally, during the third quarter of 2020, the conversion threshold was met and the Notes become convertible between October 1, 2020 and December 31, 2020. As of the date of issuance of these interim condensed consolidated financial statements, the Company received additional requests for conversion of $5 thousands. The determination of whether or not the Notes are convertible must continue to be performed on a quarterly basis. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The intention of the Company is to share-settle the total amount due upon conversion of the Notes.

In connection with the issuance of the 2028 Notes, the Company paid $91,784 thousands, $11,472 thousands, $88,362 thousands, $104,095 thousands and $82,682 thousands (including transaction expenses) in August 2018, November 2018, June 2019, June 2020 and August 2020, respectively, to enter into capped call transactions with respect to shares of the common stock with certain financial institutions (the “2028 Notes Capped Call Transactions”). In addition, the Company paid $8,005 thousands in November 2019 to amend the strike and cap prices of the capped call transaction purchased in November 2018. The 2028 Notes Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the 2028 Notes in the event that the market price of the Company’s common stock is greater than the strike price of the 2028 Notes Capped Call Transactions. The cost of the 2028 Notes Capped Call Transactions is included as a net reduction to additional paid-in capital in the stockholders’ equity section of the consolidated balance sheets.

The total estimated fair value of the 2028 Notes was $2,228,639 thousands and $1,338,014 thousands as of September 30, 2020 and December 31, 2019, respectively. The fair value was determined based on the closing trading price per $100 principal amount of the 2028 Notes as of the last day of trading for the period. The Company considered the fair value of the 2028 Notes as of September 30, 2020 and December 31, 2019 to be a Level 2 measurement. The fair value of the 2028 Notes is primarily affected by the trading price of the Company’s common stock and market interest rates. Based on the $1,082.48 closing price of the Company’s common stock on September 30, 2020, the if-converted value of the 2028 Notes exceeded their principal amount by $1,268,356 thousands.

The following table presents the carrying amounts of the liability and equity components related to the 2028 Notes as of September 30, 2020 and December 31, 2019:


	September 30, 2020		December 31, 2019
	(In thousands)
Amount of the equity component (1)	$	327,305	$	327,305

2.00% Convertible Senior Notes due 2028	$	879,998	$	880,000
Unamortized debt discount (2)		(281,958)		(301,227)
Unamortized transaction costs related to the debt component		(9,047)		(9,468)
Contractual coupon interest accrual		37,009		23,809
Contractual coupon interest payment		(34,760)		(17,160)
Net carrying amount	$	591,242	$	575,954

(1)Net of $6,163 thousands of transaction costs related to the equity component of the 2028 Notes.

(2)As of September 30, 2020, the remaining period over which the unamortized debt discount will be amortized is 8.0 years.

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The following table presents the interest expense for the contractual interest, the accretion of debt discount and the amortization of debt issuance costs:


	Nine month periods ended September 30,				Three month periods ended September 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
Contractual coupon interest expense	$	13,200	$	13,542	$	4,400	$	4,400
Amortization of debt discount		19,269		18,366		6,542		6,081
Amortization of debt issuance costs		421		362		146		123
Total interest expense related to the 2028 Notes	$	32,890	$	32,270	$	11,088	$	10,604

12. Equity Offerings

On March 15, 2019, the Company closed a public equity offering of approximately $1,150,000 thousands of common stock at a public offering price of $480 per share (the “Offering”). Pursuant to the Offering, the Company issued 2,395,834 shares of common stock, par value $0.001 per share (the “Common Stock”) which includes the exercise in full of the underwriters’ option to purchase $150 million of additional shares of common stock.

In addition, on March 15, 2019, the Company closed a concurrent private placement of $750,000 thousands. Pursuant to the private placement, the Company issued and sold 1,719,790 shares of Common Stock at a price of $436.10 per share.

On March 29, 2019, the Company issued and sold 100,000 shares of perpetual convertible preferred stock designated as Series A Perpetual Preferred Stock, par value $0.001 per share (the “Preferred Stock”) of the Company for $100,000 thousands in the aggregate. The Preferred Stock is a class of equity security that ranks senior to the Common Stock with respect to dividend rights or rights upon liquidation.

Each share of Preferred Stock has a stated value of $1,000, is entitled to a cash dividend of 4% per annum, and is convertible into shares of the Company’s Common Stock at an initial conversion price of $479.71 (subject to adjustment). The Company may require the conversion of any or all of the Preferred Stock beginning on March 29, 2023 if certain conditions set forth in the Certificate of Designation are met. The Company may redeem any or all of the Preferred Stock for cash, shares of its Common Stock or a combination thereof (at its election, subject to certain conditions) at any time beginning on March 29, 2026 for a percentage of the stated value of each share of Preferred Stock, plus any accrued and unpaid dividends at such time. On March 15, 2026, September 15, 2026 and March 15, 2027, the holders of the Preferred Stock shall have the right to redeem all of the outstanding shares of Preferred Stock for cash, shares of the Company’s Common Stock or a combination thereof (at the Company’s election, subject to certain conditions) to be determined by the formula set forth in the Certificate of Designation. Upon the occurrence of a change of control, the holders will have the right to redeem their shares of Preferred Stock for cash at a price set forth in the Certificate of Designation. The holders of the Preferred Stock have the right to vote on matters submitted to a vote of the holders of Common Stock on an as-converted basis unless required by applicable law.

In the aggregate, the Company raised funds in the amount of $1,965,903 thousands net of issuance costs paid in the amount of $34,097 thousands.

In September 2020, a holder converted 50,000 shares of Preferred Stock into 104,230 shares of the Company’s Common Stock.

13. Securitization Transactions

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

The Company securitizes financial assets associated with its credit cards and loans receivable portfolio. The Company’s securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote special purpose entities (“SPEs”) or the acquisition of loans receivable portfolios through SPEs. The Company generally retains economic interests in the collateralized securitization transactions, which are retained in the form of subordinated interests. For accounting purposes, the Company is precluded from recording the transfers of assets in securitization transactions as sales or is required to consolidate the SPE.

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Additionally, the Company securitizes certain credit cards receivable related to user’s purchases through Argentine SPEs. According to the SPE contracts, the Company has determined that it has no obligation to absorb losses or the right to receive benefits of the SPE that could be significant because it does not retain any equity certificate of participation or subordinated interest in the SPEs. As the Company does not control the vehicle, its assets, liabilities, and related results are not consolidated in the Company’s financial statements.

The Company securitizes certain loans receivable through Brazilian, Argentine and Mexican SPEs, formed to securitize loans receivable provided by the Company to its users or purchased from financial institutions that grant loans to the Company’s users through Mercado Pago. According to the SPE contracts, the Company has determined that it has both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant because it retains the equity certificates of participation, and would therefore also be consolidated. When the Company controls the vehicle, it accounts the securitization transactions as if they were secured financing and therefore the assets, liabilities, and related results are consolidated in its financial statements.

As of September 30, 2020, the carrying value of the Brazilian collateralized debt was $31,826 thousands, composed by: 1) $7,129 thousands bearing interest at a rate of Brazilian DI plus 3.5% per annum for a term of 36 months, due in June 2021 and 2) $24,697 thousands bearing interest at a rate of Brazilian DI plus 3.25% per annum for a term of 30 months, due in May 2021. The carrying value of the Argentine collateralized debt was $11,602 thousands, composed by: 1) $6,592 thousands bearing interest at a variable rate equivalent to the BADLAR rate plus 200 basis points with a minimum 27% and a maximum 37% nominal rate per annum for a term of 10 months, due in July 2021 and 2) $5,010 thousands bearing interest at a variable rate equivalent to the BADLAR rate plus 200 basis points with a minimum 27% and a maximum 37% nominal rate per annum for a term of 9 months due in March 2021. The carrying value of the Mexican collateralized debt was $23,967 thousands bearing interest at a variable rate equivalent to the equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.34% per annum for term of 36 months, due in November 2022.

This secured debt is issued by the SPEs and includes collateralized securities used to fund Mercado Credito business. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have recourse to the Company. Additionally, the cash flows generated by the SPEs are restricted to the payment of amounts due to third-party investors, but the Company retains the right to residual cash flows.

The assets and liabilities of the SPEs are included in the Company’s interim condensed consolidated financial statements as of September 30, 2020 and December 31, 2019 as follows:



	September 30,		December 31,
	2020		2019
Assets	(In thousands)
Current assets:
Restricted cash and cash equivalents	$	29,274	$	37,424
Loans receivable, net		67,986		104,419
Total current assets		97,260		141,843
Non-current assets:
Loans receivable, net		4,786		4,395
Total non-current assets		4,786		4,395
Total assets	$	102,046	$	146,238
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	67	$	128
Loans payable and other financial liabilities		43,589		43,862
Total current liabilities		43,656		43,990
Non-current liabilities:
Loans payable and other financial liabilities		23,806		54,680
Total non-current liabilities		23,806		54,680
Total liabilities	$	67,462	$	98,670

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14. Leases

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

Supplemental balance sheet information related to leases was as follows:


		September 30,		December 31,
		2020		2019
Operating Leases	(In thousands)
Operating lease right-of-use assets	$	225,345	$	200,449

Operating lease liabilities	$	228,718	$	199,932

Finance Leases
Property and equipment, at cost		12,357		10,952
Accumulated depreciation		(3,247)		(1,563)
Property and equipment, net	$	9,110	$	9,389

Loans payable and other financial liabilities	$	7,706	$	9,376

The following table summarizes the weighted average remaining lease term and the weighted average incremental borrowing rate for operating leases and the weighted average discount rate for finance leases at September 30, 2020:


Weighted average remaining lease term
Operating leases	8	Years
Finance leases	3	Years


Weighted average discount rate (*)
Operating leases	10	%
Finance leases	17	%

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

The components of lease expense were as follows:


		Nine months ended September 30,
		2020		2019
	(In thousands)
Operating lease cost	$	29,941	$	21,503

Finance lease cost:
Depreciation of property and equipment		1,564		1,024
Interest on lease liabilities		1,199		1,110
Total finance lease cost	$	2,763	$	2,134

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Supplemental cash flow information related to leases was as follows:


	Nine months ended September 30,
		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	(In thousands)
Operating cash flows from operating leases	$	28,705	$	17,315
Financing cash flows from finance leases		2,499		1,416


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	73,340	$	69,154
Finance leases		1,487		4,379

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


Period Ending September 30, 2020		Operating Leases		Finance Leases
	(In thousands)
One year or less	$	45,405	$	3,296
One year to two years		43,580		3,296
Two years to three years		40,915		3,110
Three years to four years		39,373		1,259
Four years to five years		35,551		—
Thereafter		113,885		—
Total lease payments	$	318,709	$	10,961
Less imputed interest		(89,991)		(3,255)
Total	$	228,718	$	7,706

15. Derivative instruments

The Company designates certain derivatives as hedges of particular risks associated with forecasted purchases. These transactions, mainly currency forward contracts, are classified as cash flow hedges.

As of September 30, 2020 the Company used foreign currency exchange contracts to hedge the foreign currency effects related to the forecasted purchase of MPOS devices in U.S. dollars owed by a Brazilian subsidiary whose functional currency is the Brazilian Reais. Pursuant to these contracts, the Company will buy a notional amount of $10,187 thousands in October 2020, $11,615 thousands in November 2020, $9,819 thousands in December 2020, $7,170 thousands in January 2021, $6,115 thousands in February 2021 and $6,015 thousands in March 2021, at fixed currency rates. The Company designated the foreign currency exchange contracts as cash flow hedges, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. As of September 30, 2020, the Company estimated that the whole amount of net derivative gains related to its cash flow hedges included in accumulated other comprehensive income will be reclassified into earnings within the next 12 months.

In addition, as of September 30, 2020, the Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S. dollars of a Brazilian subsidiary, whose functional currency is the Brazilian Reais, which were not designated as hedges for accounting purposes. Pursuant to these contracts, the Company will buy a notional amount of $10,000 thousands in October 2020, $20,000 thousands in November 2020, $76,000 thousands in December 2020 and $65,000 thousands in January 2021, at fixed currency rates.

Finally, the Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S. dollars of a Mexican subsidiary, whose functional currency is the Mexican Peso, which were not designated as hedges for accounting purposes. Pursuant to these contracts, the Company will buy a notional amount of $30,000 thousands in October 2020, $10,000 thousands in December 2020, $10,000 thousands in January 2021, $10,000 thousands in February in 2021 and $10,000 thousands in March 2021 at fixed currency rates.

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Foreign exchange contracts

The fair values of the Company’s outstanding derivative instruments as of September 30, 2020 and December 31, 2019 were as follows:


			September 30,		December 31,
	Balance sheet location		2020		2019
		(In thousands)
Derivatives
Foreign exchange contracts not designated as hedging instruments	Other current assets	$	10,594	$	1,249
Foreign exchange contracts designated as cash flow hedges	Other current assets		1,264		—
Foreign exchange contracts not designated as hedging instruments	Other current liabilities		1,642		—
Foreign exchange contracts designated as cash flow hedges	Other current liabilities		—		251

The effects of derivative contracts on unaudited interim condensed consolidated of comprehensive income as of September 30, 2020 were as follows:

Amount of

Amount of gain reclassified

December 31,

Gain (Loss) recognized

from accumulated

September 30,

2019

in other comprehensive loss

other comprehensive loss (income)

2020

(In thousands)

Foreign exchange contracts designated as cash flow hedges

$ (250)

$ 8,047

$ (5,985)

$ 1,812

The effects of derivative contracts on unaudited interim condensed consolidated statement of income for the nine and three-month periods ended September 30, 2020 and 2019 were as follows:


		Nine month periods ended September 30,				Three month periods ended September 30,
	2020		2019		2020		2019
		(In thousands)				(In thousands)
Foreign exchange contracts not designated as hedging instruments	$	26,535	$	3,308	$	4,709	$	3,239
Loss from foreign exchange contracts designated as fair value hedges		—		442		—		1,472
Gain from hedged items attributable to hedged risks		—		(442)		—		(1,472)

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16. Share repurchase program

On August 30, 2020, the Board of Directors of MercadoLibre authorized the Company to repurchase shares of the Company’s common stock, par value $0.001 per share, for aggregate consideration of up to $350,000 thousands.

The Company expects to purchase shares at any time and from time to time, in compliance with applicable federal securities laws, through open-market purchases, block trades, derivatives, trading plans established in accordance with SEC rules, or privately negotiated transactions. The timing of repurchases will depend on factors including market conditions and prices, the Company’s liquidity requirements and alternative uses of capital. The share repurchase program expires on August 31, 2021 and may be suspended from time to time or discontinued, and there is no assurance as to the number of shares that will be repurchased under the program or that there will be any repurchases.

As of September 30, 2020, the Company acquired under the share repurchase program 37,572 shares. The shares were acquired in the Argentine market and paid for in Argentine pesos, and the price of the share repurchase transaction has embedded the Blue Chip Swap Rate which differs significantly from the official exchange rate in Argentina. As a result, the Company recognized a foreign currency loss of $30,497 thousands derived from the difference between the Argentina’s official exchange rate and the Blue Chip Swap Rate at the moment of the repurchase transaction.

17. Impact of COVID-19 pandemic

In March 2020, the outbreak of a novel strain of the coronavirus, COVID-19 was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread around the world. Government-imposed total or partial lockdowns or curfews instituted throughout Latin America in late March, some of which have been subsequently extended, modified or rescinded, have led to a weakening of the macroeconomic environment, generating recession conditions and a devaluation of the local currencies in the countries in which the Company operates.

The Company has thus far not been required to suspend its operations in any country, but the Company’s business was, and may in the future again be, negatively affected by the pandemic in terms of operations, consumer buying trends, and consequently, net revenues. Despite the uncertainty generated by the pandemic, the Company’s revenues increased 63.1% for the nine-month period ended September 30, 2020 as compared to the same period in 2019.

Management believes that, given the uncertainty with respect to how long the pandemic will persist, what additional measures may be introduced by governments or private parties, what effect any such additional measures may have on our business or the macroeconomic impact of the pandemic in the countries where the Company operates, it is not possible to have certainty around business development and its cash generation until the outbreak of COVID-19 can be definitively contained. In terms of liquidity and cash management, relevant funding sources remain available and new credit facilities have been obtained at the geographical segment level. As of September 30, 2020, the Company’s main source of liquidity was $2,663,536 thousands of cash and cash equivalents and short-term investments, which excludes a $591,860 thousands investment related to the Central Bank of Brazil Mandatory Guarantee and a $71,786 thousands investment related to a guarantee for a secured line of credit in Brazil.

Lastly, the revenues sources of the Company’s subsidiaries are denominated in local currency. As a result, the weak macro-economic environment in 2020 in certain countries in which the Company operates coupled with the devaluations of certain local currencies in those countries against the U.S. dollar could cause a decline in year-over-year net revenues as measured in U.S. dollars.

Management has made its best estimation of the potential scenarios for the rest of 2020 and 2021. However it is not possible to predict at this time with certainty the impact that COVID-19 could have and its effects, including its impact on the economies of the countries in which the Company operates, and therefore the extent of the impact on the Company’s financial condition and results of operations if conditions persist or materially deviate from those currently used in its estimates.

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Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement 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 27 A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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. Forward-looking statements generally relate to information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, future economic, political and social conditions in the countries in which we operate and their possible impact on our business, and the effects of future regulation and the effects of competition. Such forward-looking statements reflect, among other things, our current expectations, plans, projections and strategies, anticipated financial results, future events and financial trends affecting our business, all of which 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. These risks and uncertainties include, among other things:

our expectations regarding the continued growth of online commerce and Internet usage in Latin America;

our ability to expand our operations and adapt to rapidly changing technologies;

our ability to attract new customers, retain existing customers and increase revenues;

the impact of government and central bank regulations on our business;

litigation and legal liability;

systems interruptions or failures;

our ability to attract and retain qualified personnel;

consumer trends;

security breaches and illegal uses of our services;

competition;

reliance on third-party service providers;

enforcement of intellectual property rights;

seasonal fluctuations;

political, social and economic conditions in Latin America; and

the current and potential impact of COVID-19 on our net revenues, gross profit margins, operating margins and liquidity due to future disruptions in operations as well as the macroeconomic instability caused by the pandemic.

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. They are subject to future events, risks and uncertainties–many of which are beyond our control– as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) on February 14, 2020, as updated by those described in “Item 1A — Risk Factors” in Part II of our report on Form10-Q for the quarter ended March 31, 2020 and on this Form 10-Q for the quarter ended September 30, 2020 and in other reports we file from time to time with the SEC.

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You should read that information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report, our unaudited interim condensed consolidated financial statements and related notes in Item 1 of Part I of this report and our audited consolidated financial statements and related notes in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2019. 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.

The discussion and analysis of our financial condition and results of operations has been organized to present the following:

a brief overview of our company;

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

a discussion of our principal trends and results of operations for the nine and three-month periods ended September 30, 2020 and 2019;

a discussion of the principal factors that influence our results of operations, financial condition and liquidity;

a discussion of our liquidity and capital resources and a discussion of our capital expenditures; and

a description of our non-GAAP financial measures.

Other Information

We routinely post important information for investors on our Investor Relations website, http://investor.mercadolibre.com. We use this 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. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this report.

Business Overview

MercadoLibre, Inc. (together with its subsidiaries “us”, “we”, “our” or the “Company”) is the largest online commerce ecosystem in Latin America. Our platform is designed to provide users with a complete portfolio of services to facilitate commercial transactions. We are a market leader in e-commerce in each of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru, Uruguay and Venezuela, based on the number of unique visitors and page views. We also operate online commerce platforms in the Dominican Republic, Honduras, Nicaragua, El Salvador, Panama, Bolivia, Guatemala and Paraguay.

Through our platform, we provide buyers and sellers with a robust environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 644 million people and with one of the fastest-growing Internet penetration rates in the world. We believe that we offer technological and commercial solutions that address the distinctive cultural and geographic challenges of operating an online commerce platform in Latin America.

We offer our users an ecosystem of six integrated e-commerce services: the Mercado Libre Marketplace, the Mercado Pago FinTech platform, the Mercado Envios logistics service, the MercadoLibre Classifieds service, the MercadoLibre advertising solution and the Mercado Shops online webstores solution.

The Mercado Libre Marketplace, which we sometimes refer to as our marketplace, is a fully-automated, topically-arranged and user-friendly online commerce platform, which can be accessed through our website and mobile app. This platform enables both businesses and individuals to list merchandise and conduct sales and purchases online.

Mercado Pago is our financial technology (FinTech) solution, designed to facilitate transactions both on and off our marketplaces by providing a mechanism that allows our users to securely, easily and promptly send and receive payments online. Outside of our marketplaces, Mercado Pago allows merchants to process transactions via their websites and mobile apps, as well as in their brick-and-mortar stores through QR codes and mobile points of sale (“MPOS”) devices. It also enables users to easily transfer money to each other. Through Mercado Fondo, our asset management product, our users are able to invest the outstanding balance on their Mercado Pago account at competitive rates and in a simple way. Mercado Credito, our lending solution, allows us to finance merchants’ working capital needs and consumers’ purchases.

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To further enhance our suite of e-commerce services, we launched the Mercado Envios shipping program in Brazil, Argentina, Mexico, Colombia, Chile and Uruguay. Through Mercado Envios, we offer a cost-efficient way to utilize our existing distribution chain to fulfill sales on our platform. Sellers that opt into the program are able to offer a uniform and seamlessly integrated shipping experience to their buyers at competitive prices. As of September 30, 2020, we also offer free shipping to buyers in Brazil, Argentina, Mexico, Chile and Colombia.

Through MercadoLibre Classifieds, our online classified listing service, our users can also list and purchase vehicles, real estate and services in the countries where we operate. Classifieds listings differ from Marketplace listings as they only charge optional placement fees and not final value fees. Our classifieds pages are also a major source of traffic to our platform.

Furthermore, we developed our MercadoLibre advertising platform to enable businesses to promote their products and services on the Internet. Through this platform, MercadoLibre’s sellers and large advertisers are able to display ads on our webpages.

Additionally, through Mercado Shops, our online store solution, users can set-up, manage and promote their own online store. These stores are hosted by MercadoLibre and offer integration with the marketplace, and payment and advertising services we offer. Users can pay monthly subscriptions for enhanced functionality and value added services on their store.

Reporting Segments and Geographic Information

Our segment reporting is based on geography, which is the criterion our Management currently uses to evaluate our segment performance. Our geographic segments are Brazil, Argentina, Mexico and Other Countries (including Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Bolivia, Honduras, Nicaragua, El Salvador, Guatemala, Paraguay, Uruguay and the United States of America). Although we discuss long-term trends in our business, it is our policy not to provide earnings guidance in the traditional sense. We believe that uncertain conditions make the forecasting of near-term results difficult. Further, we seek to make decisions focused primarily on the long-term welfare of our company and believe focusing on short-term earnings does not best serve the interests of our stockholders. We believe that execution of key strategic initiatives as well as our expectations for long-term growth in our markets will best create stockholder value. A long-term focus may make it more difficult for industry analysts and the market to evaluate the value of our Company, which could reduce the value of our common stock or permit competitors with short-term tactics to grow more rapidly than us. We, therefore, encourage potential investors to consider this strategy before making an investment in our common stock.

The following table sets forth the percentage of our consolidated net revenues by segment for the nine and three-month periods ended September 30, 2020 and 2019:


	Nine-month Periods Ended				Three-month Periods Ended
	September 30,				September 30,
(% of total consolidated net revenues) (*)	2020		2019		2020		2019
Brazil	55.7	%	63.7	%	54.7	%	64.7	%
Argentina	24.8		20.0		25.5		19.3
Mexico	14.0		11.7		13.5		11.8
Other Countries	5.5		4.6		6.3		4.2

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

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The following table summarizes the changes in our net revenues by segment for the nine and three-month periods ended September 30, 2020 and 2019:


	Nine-month Periods Ended				Change from 2019					Three-month Periods Ended			Change from 2019
	September 30,				to 2020 (*)					September 30,			to 2020 (*)
		2020		2019		in Dollars	in %			2020		2019	in Dollars		in %
	(in millions, except percentages)								(in millions, except percentages)
Net Revenues:
Brazil	$	1,473.5	$	1,033.2	$	440.3	42.6	%	$	610.7	$	389.9	$	220.8	56.6	%
Argentina		656.8		323.9		332.9	102.8			284.7		116.2		168.5	145.0
Mexico		371.1		190.3		180.8	95.0			150.4		71.4		79.0	110.7
Other Countries		144.8		74.7		70.1	93.9			69.9		25.5		44.3	173.7
Total Net Revenues	$	2,646.2	$	1,622.0	$	1,024.1	63.1	%	$	1,115.7	$	603.0	$	512.7	85.0	%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

Recent Developments

Capped call transactions related to the 2.00% Convertible Senior Notes 2028

In connection with the issuance of the 2028 Notes, we paid $82.7 million (including transaction expenses) in August 2020 to enter into the 2028 Notes Capped Call Transactions with certain financial institutions. The 2028 Notes Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the 2028 Notes in the event that the market price of our common stock is greater than the strike price of the 2028 Notes Capped Call Transactions. Please see note 11 to our unaudited condensed consolidated financial statements for further detail on the 2028 Notes Capped Call Transactions.

Share repurchase program

On August 30, 2020, our Board of Directors authorized to repurchase shares of our common stock, par value $0.001 per share, for aggregate consideration of up to $350 million. As of September 30, 2020, we acquired under the share repurchase program 37,572 shares. The shares were acquired in the Argentine market and paid for in Argentine pesos, and the price of the share repurchase transaction has embedded the Blue Chip Swap Rate which differs significantly from the official exchange rate in Argentina. As a result, we recognized a foreign currency loss of $30.5 million derived from the difference between the Argentina’s official exchange rate and the Blue Chip Swap Rate at the moment of the repurchase transaction.

Description of Line Items

Net revenues

We recognize revenues in each of our four geographical reporting segments. Within each of our segments, the services we provide generally fall into two distinct revenue streams: “Commerce” and “Fintech.”

In 2020, we have re-named and grouped by nature our Revenue streams breakdown, given the increasing importance of our financial business in current and expected future revenue composition, which our management considers shows more meaningful information about the business. As such, the breakdown by revenue stream previously labeled as “Enhanced Marketplace” and “Non-marketplace”, is now presented under the titles of “Commerce” and “Fintech”, respectively. Also, as a result, a group of other services, including classifieds fees, ad sales and other ancillary services, which had historically been included in the “Non-marketplace” line, have as of January 1, 2020, been included as a part of the “Commerce” Revenue stream. Prior-period corresponding figures have been changed accordingly for comparative purposes.

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The following table summarizes our consolidated net revenues by revenue stream for the nine and three-month periods ended September 30, 2020 and 2019:



	Nine-month Periods Ended					Three-month Periods Ended
	September 30, (*)					September 30, (*)
Consolidated net revenues by revenue stream	2020			2019		2020		2019
	(in millions)					(in millions)
Commerce (**)	$	1,686.9	$	957.0	$	724.5	$	346.2
Fintech		959.3		665.0		391.2		256.8
Total	$	2,646.2	$	1,622.0	$	1,115.7	$	603.0

(*) The table above may not total due to rounding.

(**) Includes marketplace fees, shipping fees, sales of goods, ad sales, classified fees and other ancillary services.

Revenues from Commerce transactions are mainly generated from:

marketplace fees that include final value fees and flat fees for transactions below a certain merchandise value;

shipping fees, net of the third-party carrier costs (when we act as an agent);

classifieds fees;

ad sales up-front fees;

sales of goods; and

fees from other ancillary businesses.

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

Shipping revenues are generated when a buyer elects to receive an item through our shipping service net of the third-party carrier costs.

Through our classifieds offerings in vehicles, real estate and services, we generate revenues from up-front fees. These fees are charged to sellers who opt to give their listings greater exposure throughout our websites.

Our Advertising revenues are generated by selling either display product and/or text link ads throughout our websites to interested advertisers.

Revenues from inventory sales are generated when control of the good is transferred to our customers.

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

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

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

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

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

revenues from the sale of mobile points of sale products.

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

When more than one service is included in one single arrangement with the same customer, we recognize revenue according to multiple element arrangements accounting, distinguishing between each of the services provided and allocating revenues based on their respective estimated selling prices.

We have a highly fragmented customer revenue base given the large numbers of sellers and buyers who use our platforms. For the nine-month periods ended September 30, 2020 and 2019, no single customer accounted for more than 5.0% of our net revenues.

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Our Mercado Libre Marketplace is available in 18 countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, Uruguay, Venezuela (deconsolidated as of December 1, 2017), Bolivia, Honduras, Nicaragua, El Salvador, Guatemala and Paraguay), and Mercado Pago is available in 7 countries (Argentina, Brazil, Chile, Peru, Colombia, Mexico and Uruguay). Additionally, Mercado Envios is available in 6 countries (Argentina, Brazil, Mexico, Colombia, Chile and Uruguay). The functional currency for each country’s operations is the country’s local currency, except for Argentina, where the functional currency is the U.S. dollar due to Argentina’s status as a highly inflationary economy. Our net revenues are generated in multiple foreign currencies and then translated into U.S. dollars at the average monthly exchange rate. Please refer to “Critical Accounting Policies and Estimates” in Note 2 of our unaudited interim condensed consolidated financial statements for further detail on foreign currency translation.

Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues, which are classified as a cost of net revenues. These taxes represented 8.0% of net revenues for the nine-month period ended September 30, 2020, as compared to 8.3% for the same period in 2019. For the three-month period ended September 30, 2020 these taxes represented 8.7% of net revenues, as compared to 8.1% for the same period in 2019.

Cost of net revenues

Cost of net revenues primarily includes bank and credit card processing charges for transactions and fees paid with credit cards and other payment methods, shipping operation costs (including warehousing costs), carrier and other operating costs, cost of sales of goods, fraud prevention fees, certain taxes on revenues, certain taxes on bank transactions, hosting and site operation fees, compensation for customer support personnel, ISP connectivity charges and depreciation and amortization.

Product and technology development expenses

Our product and technology development related expenses consist primarily of compensation for our engineering and web-development staff, depreciation and amortization costs related to product and technology development, telecommunications costs and payments to third-party suppliers who provide technology maintenance services to us.

Sales and marketing expenses

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

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

We also work intensively on attracting, developing and growing our seller community through our customer support efforts. We have dedicated professionals in most of our operations that work with sellers through trade show participation, seminars and meetings to provide them with important tools and skills to become effective sellers on our platform.

General and administrative expenses

Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of outside directors, long term retention program compensation, expenses for legal, audit and other professional services, insurance expenses, office space rental expenses, travel and business expenses, as well as depreciation and amortization costs. Our general and administrative expenses include the costs of the following areas: general management, finance, treasury, internal audit, administration, accounting, tax, legal and human resources.

Other income (expenses), net

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

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Income tax

We are subject to federal and state taxes in the United States, as well as foreign taxes in the multiple jurisdictions where we operate. Our tax obligations consist of current and deferred income taxes incurred in these jurisdictions. We account for income taxes following the liability method of accounting. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of our deferred tax assets will not be realized. Therefore, our income tax expense consists of taxes currently payable, if any (given that in certain jurisdictions we still have net operating loss carry-forwards), plus the change in our deferred tax assets and liabilities during each period.

Critical Accounting Policies and Estimates

The preparation of our unaudited interim condensed consolidated financial statements and related notes requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We have based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our Management has discussed the development, selection and disclosure of these estimates with our audit committee and our board of directors. Actual results may differ from these estimates under different assumptions or conditions.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our interim condensed consolidated financial statements. We believe that our critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our interim condensed consolidated financial statements.

There have been no significant changes in our critical accounting policies, Management estimates or accounting policies since the year ended December 31, 2019 and disclosed in the Form 10-K, see “Critical Accounting Policies and Estimates”, other than those discussed in Note 2 of our unaudited interim condensed consolidated financial statements in connection with the adoption of ASC 326 as of January 1, 2020.

Results of operations for the nine and three-month periods ended September 30, 2020 compared to the nine and three-month periods ended September 30, 2019

The selected financial data for the nine and three-month periods ended September 30, 2020 and 2019 discussed herein is derived from our unaudited interim condensed consolidated financial statements included in Item 1 of Part I of this report. These statements include all normal recurring adjustments that Management believes are necessary to fairly state our financial position, results of operations and cash flows. The results of operations for the nine and three-month periods ended September 30, 2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020 or for any other period.

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Statement of income data


	Nine-month Periods Ended ‎ September 30,					Three-months Periods Ended ‎ September 30,
(In millions)		2020 (*)		2019 (*)	2020 (*)		2019 (*)
		(Unaudited)				(Unaudited)
Net revenues	$	2,646.2	$	1,622.0	$	1,115.7	$	603.0
Cost of net revenues	(1,426.0)		(828.3)			(635.5)	(318.7)
Gross profit	1,220.2		793.8		480.2		284.3

Operating expenses:
Product and technology development		(235.5)		(165.8)		(88.8)		(59.5)
Sales and marketing		(620.2)		(564.3)		(229.6)		(252.9)
General and administrative		(211.7)		(148.0)		(78.7)		(53.9)
Total operating expenses	(1,067.4)			(878.0)		(397.1)	(366.3)
Income (loss) from operations	152.8		(84.3)			83.1	(81.9)

Other income (expenses):
Interest income and other financial gains		80.1		86.6		24.6		28.5
Interest expense and other financial losses		(75.1)		(44.7)		(24.5)		(14.5)
Foreign currency (losses) gains	(32.5)		(1.9)		(30.4)		1.0
Net income (loss) before income tax expense	125.3		(44.3)		52.7		(66.9)

Income tax expense	(75.5)		(73.7)			(37.6)	(79.2)
Net income (loss)	$	49.9	$	(118.0)	$	15.0	$	(146.1)

(*) The table above may not total due to rounding.

Principal trends in results of operations

Net revenues

Our net revenues maintained its growth trajectory during the third quarter of 2020, specifically related to the increase in our gross merchandise volume and the growth of our Fintech solution services (off-platform transactions through Mercado Pago, credits business, financing payment transactions, etc.). Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of operations— Net Revenues” section in the current document for further detail on net revenues trends for the nine and three-month periods ended September 30, 2020.

The COVID-19 pandemic has affected many companies and industries in Latin America, our Company included, especially during the end of first quarter of 2020 when government-imposed total or partial lockdowns and curfews throughout Latin America in late March, some of which have been subsequently extended, modified or rescinded.

Despite the fact that our second and third quarter of 2020 were characterized by the solid performance of our business and our belief that our long-term growth in net revenues will continue in the future, given our leadership in the region and the ongoing opportunities for e-commerce and Fintech solutions in Latin America, we are not able to predict the negative impacts that the COVID-19 pandemic may have on our business in the future.

Lastly, our sources of revenues are denominated in local currencies; therefore, the weak macro-economic environment in certain countries in which we operate coupled with the devaluations of certain local currencies in those countries against the U.S. dollar, could cause a decline in year-over-year net revenues, measured in U.S. dollars.

We continue to monitor the progress of the COVID-19 pandemic and will take additional measures to comply with the rapidly changing regulations of the countries where we operate and the related macroeconomic instability. However, we may see lower net revenues growth until COVID-19 is contained in the countries where we operate.

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Gross profit margins

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

Our gross profit trends are directly affected by our revenue, as stated above, and our cost of net revenues. In this sense, our main cost of net revenue are composed of bank and credit card processing charges for transactions and fees paid with credit cards and other payment methods, fraud prevention fees, sales taxes, shipping operation costs (including warehousing costs), carrier and other operating costs, cost of products sold, certain taxes on bank transactions, hosting and site operation fees, compensation for customer support personnel, ISP connectivity charges and depreciation and amortization. This cost structure is directly affected by the level of operations of our services, and our strategic plan on gross profit is built on factors such as an ample liquidity to fund expenses and investments and a cost-effective capital structure.

However, in the future, our gross profit margin could decline if we are not able to apply appropriate measures regarding our business to prevent potential negative impacts of the COVID-19 pandemic, if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues trend and we continue offering new shipping subsidies.

For the nine-month periods ended September 30, 2020 and 2019, our gross profit margins were 46.1% and 48.9%, respectively. The decrease in our gross profit margin resulted primarily from an increase in shipping operating costs, as a percentage of net revenues, partially offset by a decrease in collection fees and sales taxes, as a percentage of net revenues.

For the three-month periods ended September 30, 2020 and 2019, our gross profit margins were 43.0% and 47.2%, respectively. The decrease in our gross profit margin resulted primarily from an increase in shipping operating costs, as a percentage of net revenues.

Operating margins

Our operating margin is affected by our operating expenses structure, which mainly consists of our employees’s salaries, our sales and marketing expenses related to those activities we incurred to promote our services, product development expenses, etc. As we continue to grow and focus on expanding our leadership in the region, we will continue to invest in product development, sales and marketing and human resources in order to promote our services and capture long-term business opportunities. As a result, we may experience decreases in our operating margins.

The COVID-19 pandemic and its potential negative impacts on our business could also have negative impacts on our operating margins if we fail to closely monitor operating expenses on demand patterns and expenses are not adjusted in order to maintain an appropriate balance of such expenses with our actual rate of business development.

For the nine-month period ended September 30, 2020, as compared to the same period in 2019, our operating margin increased from a negative margin of 5.2% to a positive margin of 5.8%. This increase is primarily a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior.

For the three-month period ended September 30, 2020, as compared to the same period in 2019, our operating margin increased from a negative margin of 13.6% to a positive margin of 7.4%. This increase is primarily a consequence of marketing expenditures efficiencies we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior.
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Other Data


	Nine-month Periods Ended ‎ September 30,					Three-month Periods Ended ‎ September 30,
(in millions)	2020		2019			2020	2019

Unique active users⁽¹⁾		112.5		61.1		76.1		39.6
Number of confirmed new registered users during period ⁽²⁾		46.8		38.6		16.8		13.8
Gross merchandise volume⁽³⁾	$	14,361.4	$	10,126.1	$	5,902.4	$	3,640.7
Number of successful items sold ⁽⁴⁾		489.9		269.4		205.7		98.0
Number of successful items shipped⁽⁵⁾		435.2		214.3		187.6		81.2
Total payment volume⁽⁶⁾	$	33,814.8	$	19,721.7	$	14,506.0	$	7,565.2
Total volume of payments on marketplace⁽⁷⁾	$	13,615.4	$	9,393.7	$	5,648.9	$	3,377.6
Total payment transactions⁽⁸⁾		1,255.2		552.5		559.7		227.0
Capital expenditures	$	166.8	$	100.8	$	65.0	$	29.4
Depreciation and amortization	$	72.4	$	52.5	$	28.2	$	19.5

(1)New or existing user who performed at least one of the following actions during the reported period: (1) made one purchase, or reservation, or asked one question or MercadoLibre Marketplace or Classified Marketplace (2) maintained an active listing on MercadoLibre Marketplace or Classified Marketplace (3) maintained an active account in Mercado Shops (4) made a payment, money transfer, collection and/or advance using Mercado Pago (5) maintained an outstanding credit line through Mercado Credito or (6) maintained a balance of more than $5 invested in a Mercado Fondo asset management account. Management uses this metric to evaluate the size of our community of users who interact with the ecosystem and of which we have the opportunity to generate further engagement. With the changes in our business we believe it provides a better indication of our active user base rather than a registration metric that does not reflect any sort of interaction.

(2)Measure of the number of new users who have registered on the Mercado Libre Marketplace and confirmed their registration, excluding Classifieds users.

(3)Measure of the total U.S. dollar sum of all transactions completed through the Mercado Libre Marketplace, excluding Classifieds transactions.

(4)Measure of the number of items that were sold/purchased through the Mercado Libre Marketplace, excluding Classifieds items.

(5)Measure of the number of items that were shipped through our shipping service.

(6)Measure of the total U.S. dollar sum of all transactions paid for using Mercado Pago, including marketplace and non-marketplace transactions.

(7)Measure of the total U.S. dollar sum of all marketplace transactions paid for using Mercado Pago, excluding shipping and financing fees.

(8)Measure of the number of all transactions paid for using Mercado Pago.

Net revenues



	Nine-month Periods Ended					Change from 2019		Three-month Periods Ended					Change from 2019
	September 30,					to 2020 (*)		September 30,					to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
Total Net Revenues	$	2,646.2	$	1,622.0	$	1,024.1	63.1%	$	1,115.7	$	603.0	$	512.7	85.0%

(*) Percentages have been calculated using whole-dollar amounts rather than rounded amounts that appear in the table. The table above may not total due to rounding.

Our net revenues grew 63.1% and 85.0% for the nine and three-month periods ended September 30, 2020, respectively, as compared to the same periods in 2019. The increase in net revenues was primarily attributable to:

a)an increase of 76.3% and 109.3% in Commerce net revenues for the nine and three-month period resulting from increases in local currency gross merchandise volume in Argentina, Brazil and Mexico of 196%, 51% and 97%, respectively for the nine-month period ended September 30, 2020 and increases in local currency gross merchandise volume in Argentina, Brazil and Mexico of 242%, 74% and 109%, respectively, for the three-month period ended September 30, 2020, as compared to the same periods in 2019. The increase in our local currency gross merchandise volume for the nine and three-month periods ended September 30, 2020 was partially offset by the devaluation of the Brazilian Reais, the Mexican Peso and the Argentine Peso;

b)an increase of $101.3 million and $67.1 million for the nine and three-month periods ended September 30, 2020, as compared to the same periods in 2019, respectively, related to the sale of goods in Brazil, Argentina and Mexico;

c)a decrease of $87.6 million, or 42.4%, in shipping subsidies that are netted from revenues, during the nine-month period ended September 30, 2020 as compared to the same period in 2019. For the three-month period ended September 30, 2020, shipping subsidies that are netted from revenues decreased $29.1 million, or 41.1%, as compared to the same period in 2019;

d)an increase of $66.0 million and $28.3 million for the nine and three-month periods ended September 30, 2020, as compared to the same periods in 2019, respectively, related to the flat fee we charge for transactions below a certain merchandise value mainly in Brazil, Argentina and Mexico; and

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e)an increase of our Fintech revenues of 44.2%, from $665.0 million for the nine-month period ended September 30, 2019 to $959.3 million for the nine-month period ended September 30, 2020. An increased 52.3%, from $256.8 million for the three-month period ended September 30, 2019 to $391.2 million for the three-month period ended September 30, 2020. This increases are mainly generated by a 71.5% and 91.7% increase in our total payment volume, mainly associated with off-platform transactions, financing, other payment fees (as we started to monetize wallet funding operations in Brazil) and credits business for the nine and three-month periods ended September 30, 2020, respectively, as compared to the same periods in 2019.


	Nine-month Periods Ended				Change from 2019			Three-month Periods Ended				Change from 2019
	September 30,				to 2020 (*)			September 30,				to 2020 (*)
Consolidated Net Revenues by revenue stream		2020		2019	in Dollars		in %		2020		2019	in Dollars		in %
		(in millions, except percentages)							(in millions, except percentages)
Brazil
Commerce	$	901.2	$	564.8	$	336.4	59.6%	$	383.6	$	204.2	$	179.5	87.9%
Fintech		572.3		468.4		103.9	22.2%		227.1		185.8		41.3	22.2%
	$	1,473.5		1,033.2	$	440.3	42.6%	$	610.7	$	389.9	$	220.8	56.6%
Argentina
Commerce	$	369.3	$	170.0	$	199.3	117.2%	$	163.8	$	61.8	$	102.0	165.0%
Fintech		287.5		153.9		133.7	86.9%		120.9		54.4		66.6	122.4%
	$	656.8		323.9	$	332.9	102.8%	$	284.7	$	116.2	$	168.5	145.0%
Mexico
Commerce	$	307.8	$	161.8	$	146.0	90.3%	$	125.0	$	59.5	$	65.5	110.1%
Fintech		63.3		28.5		34.8	121.8%		25.4		11.9		13.5	114.0%
	$	371.1		190.3	$	180.8	95.0%	$	150.4	$	71.4	$	79.0	110.7%
Other countries
Commerce	$	108.6	$	60.5	$	48.2	79.6%	$	52.0	$	20.7	$	31.3	151.0%
Fintech		36.2		14.2		22.0	154.7%		17.8		4.8		13.0	271.4%
	$	144.8		74.7	$	70.1	93.9%	$	69.9	$	25.5	$	44.3	173.7%
Consolidated
Commerce	$	1,686.9	$	957.0	$	729.8	76.3%	$	724.5	$	346.2	$	378.3	109.3%
Fintech		959.3		665.0		294.3	44.2%		391.2		256.8		134.4	52.3%
Total	$	2,646.2	$	1,622.0	$	1,024.1	63.1%	$	1,115.7	$	603.0	$	512.7	85.0%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

Brazil

Commerce revenues in Brazil increased 59.6% in the nine-month period ended September 30, 2020 as compared to the same period in 2019. This increase was primarily a consequence of: i) a 51% increase in local currency gross merchandise volume (partially offset by a 23.4% approximate average devaluation of the local currency); ii) a $115.2 million decrease in shipping subsidies which are presented netted from revenues; iii) an increase of $43.5 million as a result of the flat fee for transactions below a certain merchandise value and; iv) an increase of $35.2 million related to the sale of goods. Fintech revenues grew by 22.2%, a $103.9 million increase, during the nine-month period ended September 30, 2020 as compared to the same period in 2019, mainly driven by a 58.2% increase in the off-platform payments volume (which is partially monetized as a strategy to expand our ecosystem), financing and credits business and other payment fees (as we started to monetize wallet funding operations in Brazil).

Commerce revenues in Brazil increased 87.9% in the three-month period ended September 30, 2020 as compared to the same period in 2019. This increase was primarily a consequence of: i) a 74% increase in local currency gross merchandise volume (partially offset by a 26.1% approximate average devaluation of the local currency); ii) a $50.1 million decrease in shipping subsidies which are presented netted from revenues; iii) an increase of $18.3 million as a result of the flat fee for transactions below a certain merchandise value and; iv) an increase of $26.2 million related to the sale of goods. Fintech revenues grew by 22.2%, a $41.3 million increase, during the three-month period ended September 30, 2020 as compared to the same period in 2019, mainly driven by a 67.0% increase in the off-platform payments volume (which is partially monetized as a strategy to expand our ecosystem) and other payment fees (as we started to monetize wallet funding operations in Brazil).

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Argentina

Commerce revenues in Argentina increased 117.2% in the nine-month period ended September 30, 2020 as compared to the same period in 2019. This increase was primarily a consequence of: i) a 196% increase in local currency gross merchandise volume (partially offset by a 34.0% approximate average devaluation of the local currency); ii) an increase of $7.6 million as a result of the flat fee for transactions below a certain merchandise value and; iii) an increase of $46.7 million related to the sale of goods. This increase was partially offset by a $19.0 million increase in shipping subsidies, which are presented netted from revenues. Fintech revenues grew 86.9%, a $133.7 million increase, during the nine-month period ended September 30, 2020 as compared to the same period in 2019, mainly driven by a 162.1% increase in the off-platform payments volume (which is partially monetized as a strategy to expand our ecosystem) and financing, partially offset by the aforementioned devaluation of the local currency.

Commerce revenues in Argentina increased 165.0% in the three-month period ended September 30, 2020 as compared to the same period in 2019. This increase was primarily a consequence of: i) a 242% increase in local currency gross merchandise volume (partially offset by a 31.1% approximate average devaluation of the local currency); ii) an increase of $3.2 million as a result of the flat fee for transactions below a certain merchandise value and; iii) an increase of $26.1 million related to the sale of goods. This increase was partially offset by a $15.4 million increase in shipping subsidies which are presented netted from revenues. Fintech revenues grew 122.4%, a $66.6 million increase, during the three-month period ended September 30, 2020 as compared to the same period in 2019, mainly driven by a 178.8% increase in the off-platform payments volume (which is partially monetized as a strategy to expand our ecosystem) and financing, partially offset by the aforementioned devaluation of the local currency.

Mexico

Commerce revenues in Mexico increased 90.3% in the nine-month period ended September 30, 2020, as compared to the same period in 2019, mainly due to: i) a 97% increase in local currency gross merchandise volume (partially offset by a 11.7% approximate average devaluation of the local currency); ii) an increase of $16.4 million related to the sale of goods and; iii) an increase of $12.9 million as a result of the flat fee for transactions below a certain merchandise value. Fintech revenues grew 121.8%, a $34.8 million increase, during the nine-month period ended September 30, 2020 as compared to the same period in 2019, mainly driven by a 112.8% increase in the off-platform payments volume (which is partially monetized as a strategy to expand our ecosystem), financing and credits business, partially offset by the aforementioned devaluation of the local currency.

Commerce revenues in Mexico increased 110.1% in the three-month period ended September 30, 2020, as compared to the same period in 2019, mainly due to: i) a 109% increase in local currency gross merchandise volume (partially offset by an 12.0% approximate average devaluation of the local currency); ii) an increase of $11.8 million related to the sale of goods and; iii) an increase of $5.2 million as a result of the flat fee for transactions below a certain merchandise value. Fintech revenues grew 114.0%, a $13.5 million increase, during the three-month period ended September 30, 2020 as compared to the same period in 2019, mainly driven by a 107.8% increase in the off-platform payments volume (which is partially monetized as a strategy to expand our ecosystem), financing and credits business, partially offset by the aforementioned devaluation of the local currency.
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The following table sets forth our total net revenues and the sequential quarterly growth of these net revenues for the periods described below:



	Quarter Ended
		March 31,		June 30,		September 30,		December 31,
		(in millions, except percentages)
		(*)
2020
Net revenues	$	652.1	$	878.4	$	1,115.7	$	n/a
Percent change from prior quarter		-3%		35%		27%
2019
Net revenues	$	473.8	$	545.2	$	603.0	$	674.3
Percent change from prior quarter		11%		15%		11%		12%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table.

The following table sets forth the growth in net revenues in local currencies, for the nine and three-month periods ended September 30, 2020 as compared to the same period in 2019:



	Changes from 2019 to 2020 (*)
(% of revenue growth in Local Currency)	Nine-month period	Three-month period
Brazil	87.7%	112.2%
Argentina	212.5%	259.5%
Mexico	122.1%	139.5%
Other Countries	123.4%	205.8%
Total Consolidated	117.3%	148.5%

(*) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2019 and applying them to the corresponding months in 2020, so as to calculate what our financial results would have been if exchange rates had remained stable from one year to the next. See also “Non-GAAP Financial Measures” section below for details on FX neutral measures.

In Argentina, the increase in local currency growth is due to an increase in our Argentine Commerce transactions volume, an increase in our shipped items volume, increases in our off-platform transactions business through Mercado Pago, an increase in our financing and a high level of inflation.

In Brazil, the increase in local currency growth is a consequence of an increase in our off-platform transactions through Mercado Pago, an increase in our financing and credits business, lower shipping subsidies and an increase in our Commerce transactions volume.

In Mexico, the increase in local currency growth is a consequence of an increase of our Commerce transactions volume, increases in our off-platform transactions through Mercado Pago, an increase in our financing and credits business, and an increase in our shipped items volume.

Cost of net revenues



		Nine-month Periods Ended				Change from 2019		Three-month Periods Ended					Change from 2019
		September 30,				to 2020 (*)		September 30,					to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
Total cost of net revenues	$	1,426.0	$	828.3	$	597.7	72.2%	$	635.5	$	318.7	$	316.8	99.4%
As a percentage of net revenues (*)		53.9%		51.1%					57.0%		52.8%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

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For the nine-month period ended September 30, 2020 as compared to the same period in 2019, the increase of $597.7 million in cost of net revenues was primarily attributable to: i) a $184.2 million increase in shipping operating costs; ii) a $141.0 million increase in collection fees, which was mainly attributable to our Argentine, Brazilian and Mexican operations as a result of the higher transactions volume of Mercado Pago in those countries; iii) a $104.5 million increase in cost of sales of goods in Brazil, Argentina and Mexico; iv) a $76.1 million increase in sales taxes; v) a $33.8 million increase in hosting expenses and; vi) a $22.3 million increase in customer support costs mainly associated to salaries and wages due to new hires and temporary customer support workers.

For the three-month period ended September 30, 2020 as compared to the same period in 2019, the increase of $316.8 million in cost of net revenues was primarily attributable to: i) a $84.0 million increase in shipping operating costs; ii) a $74.8 million increase in collection fees, which was mainly attributable to our Argentine, Brazilian and Mexican operations as a result of the higher transactions volume of Mercado Pago in those countries; iii) a $61.7 million increase in cost of sales of goods mainly in Brazil, Argentina and Mexico; iv) a $48.6 million increase in sales taxes; v) a $14.7 million increase in hosting expenses and; vi) a $15.1 million increase in customer support costs mainly associated to salaries and wages due to new hires and temporary customer support workers.

Product and technology development expenses



	Nine-month Periods Ended				Change from 2019			Three-month Periods Ended				Change from 2019
	September 30,				to 2020 (*)			September 30,				to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
Product and technology development	$	235.5	$	165.8	$	69.7	42.0%	$	88.8	$	59.5	$	29.3	49.3%
As a percentage of net revenues (*)		8.9%		10.2%					8.0%		9.9%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

For the nine-month period ended September 30, 2020, the increase in product and technology development expenses as compared to the same period in 2019 amounted to $69.7 million. This increase was primarily attributable to: i) a $45.0 million increase in salaries and wages mainly related to new hiring; ii) a $9.7 million increase in maintenance expenses mainly related to higher software licenses expenses and iii) a $8.4 million increase in depreciation and amortization expenses.

For the three-month period ended September 30, 2020, the increase in product and technology development expenses as compared to the same period in 2019 amounted to $29.3 million. This increase was primarily attributable to: i) a $16.9 million increase in salaries and wages mainly related to new hiring; ii) a $6.6 million increase in maintenance expenses mainly related to higher software licenses expenses and iii) a $3.0 million increase in depreciation and amortization expenses.

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

Sales and marketing expenses



	Nine-month Periods Ended				Change from 2019			Three-month Periods Ended				Change from 2019
	September 30,				to 2020 (*)			September 30,				to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
Sales and marketing	$	620.2	$	564.3	$	55.9	9.9%	$	229.6	$	252.9	$	(23.3)	-9.2%
As a percentage of net revenues (*)		23.4%		34.8%					20.6%		41.9%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

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For the nine-month period ended September 30, 2020, the $55.9 million increase in sales and marketing expenses as compared to the same period in 2019 was primarily attributable to: i) a $47.3 million increase in our buyer protection program expenses, mainly in Mexico, Brazil and Argentina; ii) a $32.0 million increase in bad debt expenses explained by the recognition of a charge of $27.0 million during the second quarter of 2020 related to accumulated accounts receivable from an unaffiliated entity in Argentina and the adoption of the ASC 326 effective January 1, 2020; iii) a $17.2 million increase in chargebacks from credit cards due to the increase in our Mercado Pago transactions volume; iv) a $11.7 million increase in salaries and wages and; v) a $ 10.7 million increase in other sales expenses mainly related to strategic marketing initiatives expenses. This increase was partially offset by a $65.7 million decrease in online and offline marketing expenses mainly in Brazil, Mexico and Argentina as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior.

For the three-month period ended September 30, 2020, the $23.3 million decrease in sales and marketing expenses as compared to the same period in 2019 was primarily attributable to: i) a $52.3 million decrease in online and offline marketing expenses mainly in Brazil, Mexico and Argentina as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior; and ii) a $ 11.0 million decrease in bad debt expenses mainly related to higher originations with better profitability. This decrease was partially offset by: i) a $26.9 million increase in our buyer protection program expenses, mainly in Mexico, Brazil and Argentina; ii) a $ 11.1 million increase in chargebacks from credit cards due to the increase in our Mercado Pago transactions volume; iii) a $5.2 million increase in salaries and wages.

General and administrative expenses



	Nine-month Periods Ended				Change from 2019			Three-month Periods Ended				Change from 2019
	September 30,				to 2020 (*)			September 30,				to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
General and administrative	$	211.7	$	148.0	$	63.7	43.0%	$	78.7	$	53.9	$	24.8	46.1%
As a percentage of net revenues (*)		8.0%		9.1%					7.1%		8.9%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

For the nine-month period ended September 30, 2020, the $63.7 million increase in general and administrative expenses as compared to the same period in 2019 was primarily attributable to: i) a $39.1 million increase in salaries and wages, mainly related to the LTRPs as a consequence of the increase in our common stock price; and ii) a $16.0 million increase in other general and administrative expenses mainly related to certain tax withholdings.

For the three-month period ended September 30, 2020, the $24.8 million increase in general and administrative expenses as compared to the same period in 2019 was primarily attributable to: i) a $13.6 million increase in salaries and wages, mainly related to the LTRPs as a consequence of the increase in our common stock price; and ii) a $13.0 million increase in other general and administrative expenses mainly related to certain tax withholdings. This increase was partially offset by a $2.7 million decrease in tax and other fees.

Other income (expense), net


	Nine-month Periods Ended				Change from 2019			Three-month Periods Ended				Change from 2019
	September 30,				to 2020 (*)			September 30,				to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
Other income (expense), net	$	(27.5)	$	40.0	$	(67.5)	-168.7%	$	(30.4)	$	15.0	$	(45.4)	-302.7%
As a percentage of net revenues (*)		-1.0%		2.5%					-2.7%		2.5%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

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For the nine-month period ended September 30, 2020, the $67.5 million decrease in other income (expense), net as compared to the same period in 2019 was primarily attributable to: i) a $30.6 million increase in our foreign currency loss mainly related to a loss of $30.5 million derived from the difference between the Argentina’s official exchange rate and the Blue Chip Swap Rate at the moment of the share repurchase transaction (referred to Note 16 of our unaudited interim condensed consolidated financial); ii) a $30.4 million increase in financial expenses mainly attributable to financial loans entered into during the second and third quarter of 2020, mainly in Brazil and Argentina and interest expenses from our trusts related to the factoring of our credit card receivables in Argentina and; iii) a $6.5 million decrease in interest income from our financial investments as a result of lower interest rates in our investments as a consequence of the pandemic, mainly offset by higher interest income in Argentina due to higher float.

For the three-month period ended September 30, 2020, the $45.4 million decrease in other income (expense), net as compared to the same period in 2019 was primarily attributable to: i) a $31.4 million increase in our foreign currency loss mainly related to a loss of $30.5 million derived from the difference between the Argentina’s official exchange rate and the Blue Chip Swap Rate at the moment of the share repurchase transaction (referred to Note 16 of our unaudited interim condensed consolidated financial); ii) a $10.1 million increase in financial expenses mainly attributable to financial loans entered into during the third quarter of 2020, mainly in Brazil and Argentina and interest expenses from our trusts related to the factoring of our credit card receivables in Argentina and; iii) a $3.9 million decrease in interest income from our financial investments as a result of lower interest rates in our investments as a consequence of the pandemic, mainly offset by higher interest income in Argentina due to higher float.

Income tax


	Nine-month Periods Ended				Change from 2019			Three-month Periods Ended				Change from 2019
	September 30,				to 2020 (*)			September 30,				to 2020 (*)
		2020		2019		in Dollars	in %		2020		2019		in Dollars	in %
	(in millions, except percentages)							(in millions, except percentages)
Income tax expense	$	(75.5)	$	(73.7)	$	(1.7)	2.3%	$	(37.6)	$	(79.2)	$	41.5	-52.5%
As a percentage of net revenues (*)		-2.9%		-4.5%					-3.4%		-13.1%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

During the nine-month period ended September 30, 2020 as compared to the same period in 2019, income tax expense increased by $1.7 million mainly as a result of: i) higher income tax expense in Argentina as a consequence of the temporary suspension of the knowledge-based economy promotional regime in 2020, which had a direct impact on the income tax rate for our Argentine business and higher income tax expense as a consequence of higher pre-tax gain in our Argentine segment in 2020; ii) higher income tax expense in Brazil, as a consequence of higher pre-tax gain in our Brazilian segment during 2020; and iii) higher income tax expense due to withholding tax on dividends. This increase was partially offset by lower income tax expense in Mexico and Colombia mainly as a result of valuation allowances accounted for on certain deferred tax assets in those countries during the third quarter of 2019.

During the three-month period ended September 30, 2020 as compared to the same period in 2019, income tax expense decreased by $41.5 million mainly as a result of valuation allowances accounted for on certain deferred tax assets in Mexico and Colombia during the third quarter of 2019. This decrease was partially offset by: i) higher income tax expense in Argentina as a consequence of the temporary suspension of the knowledge-based economy promotional regime in 2020, which had a direct impact on the income tax rate for our Argentine business and higher income tax expense as a consequence of higher pre-tax gain in our Argentine segment in 2020; ii) higher income tax expense in Brazil, as a consequence of higher pre-tax gain in our Brazilian segment during 2020; and iii) higher income tax expense due to withholding tax on dividends.

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

The following table summarizes our effective tax rates for the nine and three-month periods ended September 30, 2020 and 2019:


	Nine-month Periods Ended		Three-month Periods Ended
	September 30, (*)		September 30, (*)
	2020	2019	2020	2019

Effective tax rate	60.2%	-166.5%	71.5%	-118.3%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

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Our effective tax rate for the nine and three-month periods ended September 30, 2020 increased to a positive effective tax rate as compared to the same period in 2019, largely as a result of: i) an increase in our Argentine income tax rate mainly as a consequence of the temporary suspension of the knowledge-based economy promotional regime in 2020 by Argentine government until new rules for the application of the regime are issued, ii) the valuation allowances on certain accumulated deferred tax assets in Mexico and Colombia accounted for in the nine and three-month periods ended September 30, 2020, iii) the foreign exchange loss accounted for the purchase of own shares during the third quarter of 2020 which is considered a non-deductible expense, and iv) higher income tax expense due to withholding tax on dividends. For the nine and three-month periods ended September 30, 2019 the negative effective tax rate is a consequence of the valuation allowance accounted for on certain deferred tax assets in Mexico and Colombia.

The following table summarizes our effective tax rates for the nine and three-month periods ended September 30, 2020 and 2019:



	Nine-month Periods Ended		Three-month Periods Ended
	September 30,		September 30,
	2020	2019	2020	2019
Effective tax rate by country
Argentina	32.6%	9.1%	32.1%	12.6%
Brazil	22.7%	28.7%	9.7%	26.3%
Mexico	-3.1%	-55.5%	-7.6%	-169.3%

The increase in the effective income tax rate in our Argentine subsidiaries during the nine and three-month periods ended September 30, 2020 as compared to the same periods in 2019 was mainly a consequence of the temporary suspension of the knowledge-based economy promotional regime since 2020 by the Argentine government until new rules for the application of the regime are issued, which had a direct impact on the income tax rate for our Argentine business. For information regarding the benefits granted to the Company under the software development law and the status of the knowledge-based economy promotional regime, please see Note 2 to our interim unaudited condensed consolidated financial statements.

The decrease in our Brazilian effective income tax rate for the nine and three-month periods ended September 30, 2020 as compared to the same period in 2019, was mainly related to higher non-taxable pre-tax gains.

The decrease in our Mexican negative effective income tax rate for the nine and three-month periods ended September 30, 2020 as compared to the same periods in 2019, was mainly related to a higher valuation allowance accounted for in the period ended September 30, 2019 as compared with the valuation allowances accounted for in the periods ended September 30, 2020.

Segment information


(In millions, except for percentages)	Nine-month Period Ended September 30, 2020 (*)

	Brazil		Argentina		Mexico		Other Countries		Total
Net revenues	$	1,473.5	$	656.8	$	371.1	$	144.8	$	2,646.2
Direct costs		(1,148.9)		(465.8)		(370.2)		(115.8)		(2,100.7)
Direct contribution	$	324.5	$	191.0	$	0.9	$	29.0	$	545.4
Margin		22.0%		29.1%		0.2%		20.0%		20.6%


	Nine-month Period Ended September 30, 2019 (*)

	Brazil		Argentina		Mexico		Other Countries		Total
Net revenues	$	1,033.2	$	323.9	$	190.3	$	74.7	$	1,622.0
Direct costs		(872.0)		(239.9)		(254.3)		(70.7)		(1,437.1)
Direct contribution	$	161.2	$	83.9	$	(64.0)	$	3.9	$	185.1
Margin		15.6%		25.9%		-33.6%		5.3%		11.4%

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	Change from the Nine-month Period Ended September 30, 2019 to September 30, 2020 (*)

		Brazil		Argentina		Mexico		Other Countries		Total
Net revenues
in Dollars	$	440.3	$	332.9	$	180.8	$	70.1	$	1,024.1
in %		42.6%		102.8%		95.0%		93.9%		63.1%
Direct costs
in Dollars	$	(277.0)	$	(225.9)	$	(115.9)	$	(45.0)	$	(663.7)
in %		31.8%		94.1%		45.6%		63.7%		46.2%
Direct contribution
in Dollars	$	163.3	$	107.1	$	64.9	$	25.1	$	360.4
in %		101.3%		127.5%		101.3%		638.9%		194.7%


(In millions, except for percentages)	Three-month Period Ended September 30, 2020 (*)

	Brazil		Argentina		Mexico		Other Countries		Total
Net revenues	$	610.7	$	284.7	$	150.4	$	69.9	$	1,115.7
Direct costs		(501.5)		(193.4)		(144.9)		(53.2)		(893.0)
Direct contribution	$	109.2	$	91.4	$	5.5	$	16.6	$	222.7
Margin		17.9%		32.1%		3.6%		23.8%		20.0%



	Three-month Period Ended September 30, 2019 (*)

	Brazil		Argentina		Mexico		Other Countries		Total
Net revenues	$	389.9	$	116.2	$	71.4	$	25.5	$	603.0
Direct costs		(370.7)		(88.5)		(103.5)		(25.8)		(588.6)
Direct contribution	$	19.2	$	27.7	$	(32.2)	$	(0.3)	$	14.4
Margin		4.9%		23.8%		-45.1%		-1.3%		2.4%



	Change from the Three-month Period Ended September 30, 2019 to September 30, 2020 (*)

	Brazil		Argentina		Mexico		Other Countries		Total
Net revenues
in Dollars	$	220.8	$	168.5	$	79.0	$	44.3	$	512.7
in %		56.6%		145.0%		110.7%		173.7%		85.0%
Direct costs
in Dollars	$	(130.8)	$	(104.8)	$	(41.4)	$	(27.4)	$	(304.4)
in %		35.3%		118.4%		40.0%		105.9%		51.7%
Direct contribution
in Dollars	$	89.9	$	63.7	$	37.6	$	17.0	$	208.2
in %		467.6%		230.3%		117.0%		5,291.8%		1,443.9%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

Net revenues

Net revenues for the nine and three-month period ended September 30, 2020 as compared to the same periods in 2019 are described above in “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net revenues.”

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Direct costs

Brazil

For the nine-month period ended September 30, 2020, as compared to the same period in 2019, direct costs increased by 31.8%, mainly driven by: i) a 55.8% increase in cost of net revenues, mainly attributable to an increase in shipping operating costs, sales taxes, collection fees as a consequence of the higher transactions volume of our Mercado Pago business and cost of sale of goods as a consequence of an increase in sales of products; ii) a 43.1% increase in product and technology development expenses, mainly due to an increase in salaries and wages, maintenance expenses mostly related to higher software licenses expenses and depreciation and amortization expenses; and iii) a 48.0% increase in general and administrative expenses, mostly attributable to an increase in salaries and wages mainly related to the LTRPs and other general and administrative expenses principally related to certain tax withholdings. This increase was partially offset by a 6.1% decrease in sales and marketing expenses, mainly due to a decrease in online and offline marketing expenses as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior.

For the three-month period ended September 30, 2020, as compared to the same period in 2019, direct costs increased by 35.3%, mainly driven by: i) a 77.1% increase in cost of net revenues, mainly attributable to an increase in shipping operating costs, sales taxes, collection fees as a consequence of the higher transactions volume of our Mercado Pago business and cost of sale of goods as a consequence of an increase in sales of products; ii) a 56.7% increase in product and technology development expenses, mainly due to an increase in salaries and wages, maintenance expenses mostly related to higher software licenses expenses and depreciation and amortization expenses; and iii) a 46.6% increase in general and administrative expenses, mostly attributable to an increase in salaries, mainly related to the LTRPs and other general and administrative expenses principally related to certain tax withholdings. This increase was partially offset by a 17.9% decrease in sales and marketing expenses, mainly due to a decrease in online and offline marketing expenses as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior.

Argentina

For the nine-month period ended September 30, 2020, as compared to the same period in 2019, direct costs increased by 94.1%, mainly driven by: i) a 109.5% increase in cost of net revenues, mainly attributable to an increase in cost of sale of goods as a consequence of an increase in sales of products, an increase in collection fees as a consequence of the higher transactions volume of our Mercado Pago business, and an increase in shipping operating costs and sales taxes; ii) a 63.0% increase in sales and marketing expenses, mainly due to an increase in bad debt expenses explained by the recognition of a charge of $27.0 million related to accumulated accounts receivable from an unaffiliated entity in Argentina during the second quarter of 2020 and the adoption of the ASC 326 effective January 1, 2020, and buyer protection program expenses partially offset by a decrease in online and offline marketing expenses as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior; iii) a 59.7% increase in product and technology development expenses, mainly due to an increase in depreciation and amortization expenses; and iv) a 50.9% increase in general and administrative expenses, mostly attributable to an increase in salaries and wages, mainly related to the LTRPs and other general and administrative expenses principally related to certain tax withholdings.

For the three-month period ended September 30, 2020, as compared to the same period in 2019, direct costs increased by 118.4%, mainly driven by: i) a 162.7% increase in cost of net revenues, mainly attributable to an increase in collection fees as a consequence of the higher transactions volume of our Mercado Pago business, shipping operating costs, and an increase in cost of sale of goods as a consequence of an increase in sales of products and sales taxes; ii) a 18.2% increase in sales and marketing expenses, mainly due to buyer protection program expenses partially offset by a decrease in online and offline marketing expenses as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior; iii) a 115.4% increase in product and technology development expenses, mainly due to an increase in depreciation and amortization expenses; and iv) a 70.0% increase in general and administrative expenses, mostly attributable to an increase in salaries and wages, mainly related to the LTRPs and other general and administrative expenses principally related to certain tax withholdings.

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Mexico

For the nine-month period ended September 30, 2020, as compared to the same period in 2019, direct costs increased by 45.6%, mainly driven by: i) a 73.5% increase in cost of net revenues, mainly attributable to an increase in shipping operating costs, an increase in collection fees due to higher Mercado Pago penetration, cost of sale of goods as a consequence of an increase in sales of products and customer support costs; ii) a 11.0% increase in sales and marketing expenses, mainly due to buyer protection program expenses and bad debt expenses partially explained by the adoption of the ASC 326 effective January 1, 2020, partially offset by a decrease in online and offline marketing expenses as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior; iii) a 62.8% increase in product and technology development expenses, mainly attributable to depreciation and amortization expenses; and iv) a 55.5% increase in general and administrative expenses, mainly attributable to an increase in salaries and wages and other general and administrative expenses principally related to certain tax withholdings.

For the three-month period ended September 30, 2020, as compared to the same period in 2019, direct costs increased by 40.0%, mainly driven by: i) a 89.6% increase in cost of net revenues, mainly attributable to an increase in shipping operating costs, cost of sale of goods as a consequence of an increase in sales of products, an increase in collection fees due to higher Mercado Pago penetration and customer support costs; ii) a 138.8% increase in product and technology development expenses, mainly attributable to depreciation and amortization expenses and iii) a 62.6% increase in general and administrative expenses, mainly attributable to an increase in other general and administrative expenses mainly related to certain tax withholdings. This increase was partially offset by a 13.8% decrease in sales and marketing expenses, mainly due to a decrease in online and offline marketing expenses as a consequence of marketing expenditures efficiencies that we achieved as a result of the growth in organic demand brought about by the effects of the COVID-19 pandemic consumer behavior.

Liquidity and Capital Resources

Our main cash requirement has been working capital to fund Mercado Pago financing operations. We also require cash for capital expenditures relating to technology infrastructure, software applications, office space, business acquisitions, to fund our credit business, to build out our logistics capacity and the interest payments on our loans payable and other financial liabilities. We have entered into a purchase commitment in relation to the purchase of cloud services for a total amount of $240.5 million to be paid in the following 4 years. Please refer to Note 9 of our unaudited interim condensed consolidated financial statements for further detail on purchase commitments.

Since our inception, we have funded our operations primarily through contributions received from our stockholders during the first two years of operations, from funds raised during our initial public offering, and from cash generated from our operations. We issued the 2028 Notes for net proceeds of approximately $864.6 million. We have funded Mercado Pago mainly by discounting credit cards receivables and credit lines.

Additionally, we started to fund our Mercado Pago and Mercado Credito businesses through the securitization of credit cards receivable and certain loans through SPEs created in Brazil, Mexico and Argentina. Please refer to Note 13 of our unaudited interim condensed consolidated financial statements for further detail on securitization transactions.

Finally, we issued common and preferred stock in the securities offerings that closed on March 15, 2019 and March 29, 2019, respectively, for net aggregate proceeds of $1,965.9 million, which are intended to be used to fund the growth of our payment initiatives, build out our logistics capacity, drive the adoption of these services and for general corporate purposes. Please see note 12 to our unaudited condensed consolidated financial statements for additional information regarding our equity offerings.

Given the uncertain progress of the COVID-19 pandemic and the related macroeconomic instability in the countries where we operate, it is not possible to have certainty around business development and cash generation for the remainder of the year 2020 and 2021. In terms of liquidity and cash management, our relevant sources of funding remain available and new credit facilities have been obtained at the geographic segment level. Please refer to Note 17 to our unaudited condensed consolidated financial statements for further detail on COVID-19 impacts.

As of September 30, 2020, our main source of liquidity was $2,663.5 million of cash and cash equivalents and short-term investments, which excludes a $591.9 million investment related to the Central Bank of Brazil Mandatory Guarantee and $71.8 million investment related to restricted escrow accounts regarding financial loans taken out in Brazil, and consists of cash generated from operations, proceeds from loans, from the issuance of the 2028 Notes and proceeds from the issuance of common and preferred stock.

The significant components of our working capital are cash and cash equivalents, restricted cash and cash equivalents, short-term investments, accounts receivable, loans receivable, inventory, accounts payable and accrued expenses, funds receivable from and payable to Mercado Pago users, and short-term debt.

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As of September 30, 2020, cash and cash equivalents, restricted cash and cash equivalents and investments of our non-U.S. subsidiaries amounted to $2,058.0 million, 53.9% of our consolidated cash and cash equivalents, restricted cash and cash equivalents and investments, and our non-U.S. dollar-denominated cash and investments amounted to approximately 51.6% of our consolidated cash and investments. Our non-U.S. dollar-denominated cash and investments are located primarily in Brazil.

The following table presents our cash flows from operating activities, investing activities and financing activities for the nine-month periods ended September 30, 2020 and 2019:


	Nine-month Periods Ended
	September 30, (*)
(In millions)		2020	2019
Net cash (used in) provided by:
Operating activities	$	926.0	$	372.8
Investing activities		(838.1)		(1,273.4)
Financing activities		242.4		1,941.1
Effect of exchange rates on cash and cash equivalents, restricted cash and cash equivalents		(157.5)		(48.2)
Net increase in cash and cash equivalents, restricted cash and cash equivalents	$	172.7	$	992.3

(*) The table above may not total due to rounding.

Net cash provided by operating activities

Cash provided by operating activities consists of net income adjusted for certain non-cash items, and the effect of changes in working capital and other activities:



		Nine-month Periods Ended			Change from 2019
		September 30, (*)			to 2020 (*)
		2020		2019	in Dollars		in %
		(in millions, except percentages)
Net Cash provided by:
Operating activities	$	926.0	$	372.8	$	553.2	148.4%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

The $553.2 million increase in net cash provided by operating activities during the nine-month period ended September 30, 2020, as compared to the same period in 2019, was primarily driven by a $616.9 million increase in funds payable to customers, a $268.9 million increase in payables and accrued expenses and a $167.9 million increase in net income, partially offset by a decrease of $417.4 million in credit cards receivable and other means of payment and a $87.9 million decrease in other liabilities.

Net cash used in investing activities



		Nine-month Periods Ended			Change from 2019
		September 30, (*)			to 2020 (*)
		2020		2019	in Dollars		in %
		(in millions, except percentages)
Net Cash used in:
Investing activities	$	(838.1)	$	(1,273.4)	$	435.3	-34.2%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

Net cash used in investing activities in the nine-month period ended September 30, 2020 resulted mainly from purchases of investments of $3,600.7 million, which was partially offset by proceeds from the sale and maturity of investments of $3,081.6 million, consistent with our treasury strategy of investing part of our available liquidity, principally, in U.S treasury securities. We also used: a) $159.8 million in the purchase of property and equipment (mainly in information technology assets in Argentina, Brazil and Mexico), b) $170.3 million in principal of loans receivable granted to merchants and consumers under our Mercado Credito solution and c) $6.9 million in payments related to the acquisition of Kiserty S.A. The cash used in investing activities in the nine-month period ended September 30, 2020 was partially offset by receipts from settlements of derivative instruments for $17.8 million.
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Net cash provided by financing activities



		Nine-month Periods Ended			Change from 2019
		September 30, (*)			to 2020 (*)
		2020		2019	in Dollars		in %
		(in millions, except percentages)
Net Cash provided by:
Financing activities	$	242.4	$	1,941.1	$	(1,698.7)	-87.5%

(*) Percentages have been calculated using whole-dollar amounts rather than the rounded amounts that appear in the table. The table above may not total due to rounding.

For the nine-month period ended September 30, 2020, our cash provided by financing activities was primarily derived from $474.3 million in net proceeds from loans payable and other financial liabilities partially offset by the payment of $186.8 million for the purchase of capped calls and $39.7 million for the Common Stock repurchased.

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

Debt

Convertible Senior Notes

On August 24, 2018, we issued $800 million of 2.00% Convertible Senior Notes due 2028 and on August 31, 2018 we issued an additional $80 million of notes pursuant to the partial exercise of the initial purchasers’ option to purchase such additional notes, resulting in an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028. The 2028 Notes are unsecured, unsubordinated obligations, which pay interest in cash semi-annually, on February 15 and August 15, at a rate of 2.00% per annum. The 2028 Notes will mature on August 15, 2028 unless earlier repurchased or converted in accordance with their terms prior to such date. The 2028 Notes may be converted, under specific conditions, based on an initial conversion rate of 2.2553 shares of common stock per $1,000 principal amount of the 2028 Notes (equivalent to an initial conversion price of $443.40 per share of common stock), subject to adjustment as described in the indenture governing the 2028 Notes.

Please refer to note 11 to our unaudited interim condensed consolidated financial statements for additional information regarding the 2028 Notes and the related capped call transactions.

Financial loans in Brazil

Due to the COVID-19 pandemic situation, we have obtained new credit facilities at the geographic segment level. As of September 30, 2020, we obtained credit facilities in Brazil with an outstanding amount of $369.6 million. Please refer to Note 11 of our unaudited interim condensed consolidated financial statements for further information on our loans and Note 17 for further detail on COVID-19 impacts.

Mercado Pago Funding

In 2020, we, through our subsidiaries, continued obtaining certain lines of credit in Argentina, Chile and Uruguay primarily to fund the Mercado Pago business. Additionally, we continue to securitize certain loans and credit card receivables through our Argentine, Mexican and Brazilian SPEs, formed to securitize loans provided by us to our users and credit cards receivable. Please refer to Note 13 to our interim unaudited condensed consolidated financial statements for additional detail.

Capital expenditures

Our capital expenditures (composed of our payments for property and equipment (as fulfillment centers), intangible assets and acquired businesses) for the nine-month periods ended September 30, 2020 and 2019 amounted to $166.8 million and $100.8 million, respectively.

During the nine-month period ended September 30, 2020 we invested $102.6 million in information technology in Brazil, Argentina and Mexico, and $48.1 million in our Argentine, Brazilian and Mexican offices.

We are continually increasing our level of investment in hardware and software licenses necessary to improve and update our platform’s technology and computer software developed internally. We anticipate continued investments in capital expenditures related to information technology and logistic network capacity in the future as we strive to maintain our position in the Latin American e-commerce market.

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

Off-balance sheet arrangements

As of September 30, 2020, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

Recently issued accounting pronouncements

See Item 1 of Part I, “Unaudited Interim Condensed Consolidated Financial Statements-Note 2-Summary of significant accounting policies— Recently Adopted Accounting Standards and Recently issued accounting pronouncements not yet adopted.”

Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use foreign exchange (“FX”) neutral measures as a non-GAAP measure.

This non-GAAP measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. This non-GAAP financial measure should only be used to evaluate our results of operations in conjunction with the most comparable U.S. GAAP financial measures.

Reconciliation of this non-GAAP financial measure to the most comparable U.S. GAAP financial measure can be found in the table included in this quarterly report.

We believe that reconciliation of FX neutral measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future. Specifically, we believe this FX neutral non-GAAP measure provide useful information to both Management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.

The FX neutral measures were calculated by using the average monthly exchange rates for each month during 2019 and applying them to the corresponding months in 2020, so as to calculate what our results would have been if exchange rates had remained stable from one year to the next. The table below excludes intercompany allocation FX effects. Finally, these measures do not include any other macroeconomic effect such as local currency inflation effects, the impact on impairment calculations or any price adjustment to compensate local currency inflation or devaluations.

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The following table sets forth the FX neutral measures related to our reported results of the operations for the nine and three-month periods ended September 30, 2020:



	Nine-month Periods Ended ‎September 30, (*)
	As reported			FX Neutral Measures	As reported
(In millions, except percentages)	2020	2019	Percentage Change	2020	2019	Percentage Change
	(Unaudited)			(Unaudited)
Net revenues	$ 2,646.2	$ 1,622.0	63.1%	$ 3,524.4	$ 1,622.0	117.3%
Cost of net revenues	(1,426.0)	(828.3)	72.2%	(1,866.8)	(828.3)	125.4%
Gross profit	1,220.2	793.8	53.7%	1,657.6	793.8	108.8%

Operating expenses	(1,067.4)	(878.0)	21.6%	(1,427.3)	(878.0)	62.6%
Income (loss) from operations	152.8	(84.3)	281.3%	230.3	(84.3)	373.3%


	Three-month Periods Ended ‎September 30, (*)
	As reported			FX Neutral Measures	As reported
(In millions, except percentages)	2020	2019	Percentage Change	2020	2019	Percentage Change
	(Unaudited)			(Unaudited)
Net revenues	$ 1,115.7	$ 603.0	85.0%	$ 1,498.4	$ 603.0	148.5%
Cost of net revenues	(635.5)	(318.7)	99.4%	(839.8)	(318.7)	163.5%
Gross profit	480.2	284.3	68.9%	658.6	284.3	131.6%

Operating expenses	(397.1)	(366.3)	8.4%	(532.4)	(366.3)	45.4%
Income (loss) from operations	83.1	(81.9)	201.4%	126.2	(81.9)	253.9%

(*) The table above may not total due to rounding.

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Item 3 — Qualitative and Quantitative Disclosure About Market Risk

We are exposed to market risks arising from our business operations. These market risks arise mainly from the possibility that changes in interest rates and the U.S. dollar exchange rate with local currencies, particularly the Brazilian Reais and Argentine Peso due to Brazil’s and Argentine’s respective share of our revenues, may affect the value of our financial assets and liabilities. Latin American countries in which we operate have been negatively affected by the outbreak of COVID-19, which has generated macroeconomic instability and led to the devaluation of certain Latin American currencies.

Foreign currencies

We have significant operations internationally that are denominated in foreign currencies, primarily the Brazilian Reais, Argentine Peso, Mexican Peso, Colombian Peso and Chilean Peso, subjecting us to foreign currency risk, which may adversely impact our financial results. We transact business in various foreign currencies and have significant international revenues and costs. In addition, we charge our international subsidiaries for their use of intellectual property and technology and for certain corporate services. Our cash flows, results of operations and certain of our intercompany balances that are exposed to foreign exchange rate fluctuations may differ materially from expectations and we may record significant gains or losses due to foreign currency fluctuations and related hedging activities.

As of September 30, 2020, we hold cash and cash equivalents in local currencies in our subsidiaries, and have receivables denominated in local currencies in all of our operations. Our subsidiaries generate revenues and incur most of their expenses in the respective local currencies of the countries in which they operate. As a result, our subsidiaries use their local currency as their functional currency except for our Argentine subsidiaries, whose functional currency is the U.S. dollar due to the inflationary environment. As of September 30, 2020, the total cash, cash equivalents, restricted cash and cash equivalent denominated in foreign currencies totaled $951.2 million, short-term investments denominated in foreign currencies totaled $1,010.7 million and accounts receivable, credit cards receivable and other means of payment and loans receivable in foreign currencies totaled $954.9 million. As of September 30, 2020, we had no long-term investments denominated in foreign currencies. To manage exchange rate risk, our treasury policy is to transfer most cash and cash equivalents in excess of working capital requirements into U.S. dollar-denominated accounts in the United States and to enter into certain foreign exchange derivatives, as forwards, in order to mitigate our exposure to foreign exchange risk. As of September 30, 2020, our U.S. dollar-denominated cash and cash equivalents, restricted cash and cash equivalents and short-term investments totaled $1,849.8 million and our U.S. dollar-denominated long-term investments totaled $6.9 million.

For the nine-month period ended September 30, 2020, we had a consolidated loss on foreign currency of $32.5 million mainly related to a loss of $30.5 million derived from the difference between the Argentina’s official exchange rate and the Blue Chip Swap Rate at the moment of the share repurchase transaction. For the three-month period ended September 30, 2020, we had a consolidated loss on foreign currency of $30.4 million mainly related to a loss of $30.5 million derived from the difference between the Argentina’s official exchange rate and the Blue Chip Swap Rate at the moment of the share repurchase transaction (See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of operations—Other income (expenses), net” for more information).

The following table sets forth the percentage of consolidated net revenues by segment for the nine and three-month periods ended September 30, 2020 and 2019:


	Nine-month Periods Ended				Three-month Periods Ended
	September 30,				September 30,
(% of total consolidated net revenues) (*)	2020		2019		2020		2019
Brazil	55.7	%	63.7	%	54.7	%	64.7	%
Argentina	24.8		20.0		25.5		19.3
Mexico	14.0		11.7		13.5		11.8
Other Countries	5.5		4.6		6.3		4.2

(*) Percentages have been calculated using whole-dollar amounts.

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Foreign Currency Sensitivity Analysis

The table below shows the impact on our net revenues, cost of net revenues, operating expenses, other expenses and income tax, net income and equity for a positive and a negative 10% fluctuation on all the foreign currencies to which we are exposed at the moment of translating our financial statements to U.S. dollar as of September 30, 2020:



Foreign Currency Sensitivity Analysis (*)
(In millions)	-10%	Actual	+10%
	(1)		(2)
Net revenues	$ 2,940.1	$ 2,646.2	$ 2,405.7
Expenses	(2,761.0)	(2,493.3)	(2,284.5)
Income from operations	179.1	152.8	121.1

Other income/(expenses) and income tax related to P&L items	(77.5)	(70.4)	(64.7)

Foreign Currency impact related to the remeasurement of our Net Asset position	(32.6)	(32.5)	(32.5)
Net Income	69.1	49.9	24.0

Total Shareholders' Equity	$ 1,780.0	$ 1,746.1	$ 1,635.3

(1)Appreciation of the subsidiaries’ local currency against U.S. Dollar

(2)Depreciation of the subsidiaries’ local currency against U.S. Dollar

(*) The table above may not total due to rounding.

The table above shows an increase in our net income when the U.S. dollar weakens against foreign currencies because of the positive impact of the increase in income from operations. On the other hand, the table above shows a decrease in our net income when the U.S. dollar strengthens against foreign currencies because of the negative impact of the decrease in income from operations.

Argentine Segment

In accordance with U.S. GAAP, we have classified our Argentine operations as highly inflationary since July 1, 2018, using the U.S. dollar as the functional currency for purposes of reporting our financial statements. Therefore, no translation effect has been accounted for in other comprehensive income related to our Argentine operations since July 1, 2018.

As of September 30, 2020, the Argentine Peso exchange rate against the U.S. dollar was 76.18.

If we had used the Blue Chip Swap Rate since January 1, 2020 to account for the net revenues of the Argentine subsidiaries, the reported Argentine segment net revenues for the nine and three-month periods ended September 30, 2020 would have amounted to $413.5 million and $168.1 million, respectively.

Brazilian Segment

Considering a hypothetical devaluation of 10% of the Brazilian Reais against the U.S. dollar on September 30, 2020, the reported net assets in our Brazilian subsidiaries would have decreased by approximately $64.7 million with the related impact in Other Comprehensive Income. Additionally, we would have recorded a foreign currency loss amounting to approximately $15.5 million in our Brazilian subsidiaries.

Mexican Segment

Considering a hypothetical devaluation of 10% of the Mexican peso against the U.S. dollar on September 30, 2020, the reported net assets in our Mexican subsidiaries would have decreased by approximately $20.6 million with the related impact in Other Comprehensive Income. Additionally, we would have recorded a foreign currency loss amounting to approximately $6.8 million in our Mexican subsidiaries.

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Interest

Our earnings and cash flows are also affected by changes in interest rates. These changes could have an impact on the interest rates that financial institutions charge us prior to the time we sell our Mercado Pago receivables. As of September 30, 2020, Mercado Pago’s receivables totaled $660.4 million. Interest rate fluctuations could also impact interest earned through our Mercado Credito solution. As of September 30, 2020, loans receivable from our Mercado Credito solution totaled $254.2 million. Interest rate fluctuations could also negatively affect certain of our fixed rate and floating rate investments comprised primarily of time deposits, money market funds and sovereign debt securities. Investments in both fixed rate and floating rate interest earning products carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall.

Under our current policies, we do not use interest rate derivative instruments to manage exposure to interest rate changes. As of September 30, 2020, the average duration of our available for sale securities, defined as the approximate percentage change in price for a 100-basis-point change in yield, was 0.4%. If interest rates were to instantaneously increase (decrease) by 100 basis points, the fair value of our available for sale securities as of September 30, 2020 could decrease (increase) by approximately $4.4 million.

As of September 30, 2020, our short-term investments amounted to $2,187.5 million and our long-term investments amounted to $6.9 million. Our short-term investments, except for the $591.9 million investment related to the Central Bank of Brazil Mandatory Guarantee and $71.8 million investment related to restricted escrow accounts regarding financial loans taken in Brazil, can be readily converted at any time into cash or into securities with a shorter remaining time to maturity. We determine the appropriate classification of our investments at the time of purchase and re-evaluate such designations as of each balance sheet date.

Equity Price Risk

Our board of directors, upon the recommendation of the compensation committee, approved the 2015, 2016, 2017, and 2018 Long Term Retention Program (the “2015, 2016, 2017 and 2018 LTRPs”), respectively.

In order to receive an award under the 2015, 2016, 2017 and/or 2018 LTRP, each eligible employee must satisfy the performance conditions established by the Board of Directors for such employee. If these conditions are satisfied, the eligible employee will, subject to his or her continued employment as of each applicable payment date, receive the full amount of his or her 2015, 2016, 2017, and/or 2018 LTRP award, payable as follows:

the eligible employee will receive a fixed payment, equal to 8.333% of his or her 2015, 2016, 2017, and/or 2018 LTRP bonus once a year for a period of six years starting in or about the first quarter of 2016, 2017, 2018 and/or 2019 respectively (the “2015, 2016, 2017, or 2018 Annual Fixed Payment”, respectively); and

on each date we pay the respective Annual Fixed Payment to an eligible employee, he or she will also receive a payment (the “2015, 2016, 2017, or 2018 Variable Payment”, respectively) equal to the product of (i) 8.333% of the applicable 2015, 2016, 2017, and/or 2018 LTRP award and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the 2014 (with respect to the 2015 LTRP), 2015 (with respect to the 2016 LTRP), 2016 (with respect to the 2017 LTRP) and 2017 (with respect to the 2018 LTRP) Stock Price, defined as $127.29, $111.02, $164.17 and $270.84 for the 2015, 2016, 2017 and 2018 LTRP, respectively, which was the average closing price of our common stock on the NASDAQ Global Select Market during the final 60 trading days of 2014, 2015, 2016 and 2017, respectively. The “Applicable Year Stock Price” shall equal the average closing price of our common stock on the NASDAQ Global Select Market during the final 60 trading days of the year preceding the applicable payment date.

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Our board of directors, upon the recommendation of the compensation committee, approved the 2019 and 2020 Long Term Retention Program (the “2019 and 2020 LTRPs”), respectively, under which certain eligible employees have the opportunity to receive cash payments annually for a period of six years (with the first payment occurring in or about the first quarter of 2020 and 2021, respectively). In order to receive the full target award under the 2019 and/or 2020 LTRP, each eligible employee must remain employed as of each applicable payment date. The 2019 and 2020 LTRP awards are payable as follows:

the eligible employee will receive 16.66% of half of his or her target 2019 and/or 2020 LTRP bonus once a year for a period of six years, with the first payment occurring in or about the first quarter of 2020 and 2021 (the “2019 or 2020 Annual Fixed Payment”, respectively); and

on each date we pay the respective Annual Fixed Payment to an eligible employee, he or she will also receive a payment (the “2019 or 2020 Variable Payment”) equal to the product of (i) 16.66 % of half of the target 2019 or 2020 LTRP award and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the average closing price of our common stock on the NASDAQ Global Select Market during the final 60 trading days of 2018 and 2019 defined as $322.91 and $553.45 for the 2019 and 2020 LTRP, respectively. The “Applicable Year Stock Price” shall equal the average closing price of our common stock on the NASDAQ Global Select Market during the final 60 trading days of the year preceding the applicable payment date.

At September 30, 2020, the total contractual obligation fair value of our 2015, 2016, 2017, 2018, 2019 and 2020 LTRP Variable Payment obligation amounted to $273.2 million. As of September 30, 2020, the accrued liability related to the 2015, 2016, 2017, 2018, 2019 and 2020 Variable Payment of the LTRP included in Salaries and Social security payable in our condensed consolidated balance sheet amounted to $86.6 million. The following table shows a sensitivity analysis of the risk associated with our total contractual obligation fair value related to the 2015, 2016, 2017, 2018, 2019 and 2020 LTRP Variable Payment if our common stock price per share were to increase or decrease by up to 40%:



		As of September 30, 2020
		MercadoLibre, Inc	2015, 2016, 2017, 2018, 2019 and 2020
		Equity Price	LTRP Variable contractual obligation
(In thousands, except equity price)
Change in equity price in percentage

40%		1,516.00	382,507
30%		1,407.72	355,185
20%		1,299.43	327,863
10%		1,191.15	300,541
Static	(*)	1,082.86	273,219
-10%		974.57	245,897
-20%		866.29	218,575
-30%		758.00	191,253
-40%		649.72	163,932

(*) Present value of average closing stock price for the last 60 trading days of the year preceding the applicable payment date.

Item 4 — Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our Management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting that was disclosed in our quarterly report on Form 10-Q for the quarter ended June 30, 2020.

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Remediation Plan

As previously described in Part I, Item 4 of our quarterly report on Form 10-Q for the quarter ended June 30, 2020, management has begun implementing a remediation plan to address the material weakness referred to above. The remediation plan includes the following: i) changes to the control owners of the specific controls impacted by the material weakness, ii) an increase in the frequency of these controls, iii) implementation of new IT applications to support the performance of the reconciliation controls on accounts receivable from means of payments, and iv) hiring of competent outsourced personnel and expertise to assist in the execution of these controls.

We expect that the remediation plan will be completed prior to the end of fiscal year 2020. The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and our management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Controls Over Financial Reporting

Other than as described above under the caption “Remediation Plan”, there were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Most of our employees are working remotely due to the COVID-19 pandemic, and we continue to monitor and assess the impact of the COVID-19 pandemic on our internal controls.

PART II. OTHER INFORMATION

Item 1 — Legal Proceedings

See Item 1 of Part I, “Financial Statements—Note 9 Commitments and Contingencies—Litigation and other Legal Matters.”

Item 1A — Risk Factors

We previously disclosed risk factors under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) and our Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (the “First Quarter Form 10-Q”). The following information supplements and, to the extent inconsistent, supersedes some of the information appearing in the Risk Factors section of our 2019 Form 10-K and First Quarter Form 10-Q. In addition to those risk factors and the other information included elsewhere in this report, you should also carefully consider the risk factor discussed below. The risk described below and in our 2019 Form 10-K and First Quarter Form 10-Q, are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations:

The outbreak of COVID-19 has had, and may in the future have, a negative impact on the global economy and on our business, operations and results

The outbreak of COVID-19, a novel strain of coronavirus, was recognized as a pandemic by the World Health Organization in March 2020, and has now spread around the world. The outbreak has resulted in government authorities and businesses throughout the world implementing numerous measures to contain or mitigate it, including travel bans and restrictions, quarantines, shelter in place and lock-down orders and business limitations and shutdowns. These measures have had dramatic adverse consequences for the global economy, including on demand, operations, supply chains and financial markets, and have significantly contributed to deteriorating macroeconomic conditions. The full extent of the nature and scope of the consequences to date are difficult to evaluate precisely, and their future course is impossible to predict with confidence.

The COVID-19 crisis has had, and may in the future have, negative effects on our business, affecting our level of operations, consumer buying trends, and consequently, our net revenues. The factors adversely affecting our operations include, but are not limited to, lockdowns imposed by Latin American governments that have restricted merchants from operating resulting at times, in our logistics business, in order backlogs and cancellations for orders delivered through drop ship and cross-docking networks; lower foot traffic in physical retail that has caused Mercado Pago to experience at times a deceleration in the number of payments processed, resulting in lower mobile point of sale and QR total payment volume growth and; weak macro-economic conditions in certain countries in which the Company operates, coupled with devaluations of certain local currencies in those countries against the U.S. dollar, which could cause a decline in year-over-year net revenues as measured in U.S. dollars.

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The future impact of the COVID-19 crisis on our business, operations, or financial results is highly uncertain and will depend on numerous evolving factors that we cannot predict, including, but not limited to:

the duration, scope, and severity of the COVID-19 pandemic;

disruption of our logistics network;

disruption or delay of the activity of our merchants;

a shift in consumer behavior;

the impact of travel bans, work-from-home policies, or shelter-in-place orders;

the temporary or prolonged shutdown of manufacturing facilities or retail stores and decreased retail traffic;

staffing shortages;

general economic, financial, and industry conditions, particularly conditions relating to liquidity, financial performance, and related credit issues in the retail sector, which may be amplified by the effects of COVID-19;

the long-term effects of COVID-19 on the national and global economy, including on consumer confidence and spending, financial markets and the availability of credit for us, our suppliers and our customers; and

increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt to profit from the disruption in light of increased online-banking, e-commerce and other online activity.

A sustained or prolonged COVID-19 outbreak, a resurgence or the emergence of a new strain of coronavirus, could exacerbate the factors described above and intensify the impact on our business. In addition, if the adverse effects of the COVID-19 outbreak are sustained, they could have accounting consequences, such as impairments of fixed assets or goodwill. It could also affect our ability to execute our expansion plans or invest in products and development. The resumption of economic activity and business operations to pre-pandemic levels may be delayed or constrained by lingering effects on our merchants and consumers. Accordingly, these factors may adversely affect our business, financial condition and results of operations, even after the COVID-19 outbreak has subsided.

The COVID-19 outbreak has accelerated the shift from in-store shopping and traditional in-store payment methods (e.g., credit cards, debit cards, cash) towards e-commerce and online payments. Our business has benefited from these behavioral shifts, which have mainly resulted in a significant increase in active users and payments volume. To the extent that consumer preferences revert to pre-COVID-19 behaviors as mitigation measures to limit the spread of COVID-19 are eased or lifted, our business, financial condition and results of operations could be adversely impacted.

The COVID-19 outbreak has required and is likely to continue to require management to devote time and attention, as well as increased investments of resources across our enterprise, including as a result of our continued efforts to monitor the progress of the COVID-19 pandemic and any additional measures we may have to take to comply with the rapidly changing regulations of the countries in which we operate. The spread of COVID-19 has caused us to implement modifications to our business practices, including work-from-home policies and strict health and safety precautions for our offices and fulfillment centers. These modifications to our business practices, which may continue for an extended period of time, and subsequent reintroduction into the workplace could pose operational risk, increase cybersecurity risk, strain our business continuity plans, negatively impact productivity, give rise to claims by employees, and impair our ability to manage our business or otherwise adversely affect our business. Additionally, COVID-19 could negatively affect our ability to operate effective internal controls over financial reporting given that a significant number of our employees are required to work from home and therefore new or modified processes, procedures, and controls could be required to respond to changes in our business environment and practices. We may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, and business partners. There is no certainty that those measures will be sufficient to mitigate the risks posed by COVID-19 or will otherwise be satisfactory to government authorities.

‎

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We have identified a material weakness in our internal control over financial reporting which, if not remediated, could result in loss of investor confidence and adversely affect our business or stock price

As described in Part I, Item 4, we identified a deficiency in the effectiveness of a control intended to properly document and review receivables accumulated from an unaffiliated entity in Argentina. Management has concluded that the deficiency identified constitutes a material weakness in our internal control over financial reporting and, as a result, internal control over financial reporting was not effective as of December 31, 2019.

We have developed and are implementing remedial actions to address the material weakness, but there can be no assurance that our efforts will be successful. Implementing these remedial actions could result in additional costs. If we are unable to remediate the material weakness, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected. As a result, the existence of the material weakness or any other material weaknesses identified in the future could adversely affect investor confidence in our financial statements and adversely affect our business or stock price.

Item 6 — Exhibits

The information set forth under “Index to Exhibits” below is incorporated herein by reference.

MercadoLibre, Inc.

INDEX TO EXHIBITS


3.1		Registrant’s Amended and Restated Certificate of Incorporation. ⁽¹⁾
3.2		Registrant’s Amended and Restated Bylaws. ⁽¹⁾
3.3		Registrant’s Certificate of Designation of Series A Perpetual Preferred Stock. ⁽²⁾
4.1		Form of Specimen Certificate for the Registrant’s Common Stock. ⁽³⁾
4.2		Indenture with respect to the Registrant’s 2.00% Convertible Senior Notes due 2028, dated as of August 24, 2018, between the Registrant and Wilmington Trust, National Association, as trustee. ⁽⁴⁾
31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in Inline XBRL: (i) Interim Condensed Consolidated Balance Sheets, (ii) Interim Condensed Consolidated Statements of Income, (iii) Interim Condensed Consolidated Statements of Comprehensive Income, (iv) Interim Condensed Statements of Equity, (v) Interim Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Interim Condensed Consolidated Financial Statements.
104		The cover page from the Company’s Form 10-Q for the quarterly period ended September 30, 2020, formatted in Inline XBRL and contained in Exhibit 101


*	Filed or furnished herewith, as applicable.
(1)	Incorporated by reference to the Registration Statement on Form S-1 filed on May 11, 2007.
(2)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed on March 29, 2019.
(3)	Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009.
(4)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed on August 24, 2018.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	MERCADOLIBRE, INC.
	Registrant

Date: November 5, 2020.	By:	/s/ Marcos Galperin
		Marcos Galperin
		President and Chief Executive Officer

	By:	/s/ Pedro Arnt
		Pedro Arnt
		Executive Vice President and Chief Financial Officer

Exhibit 311

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marcos Galperin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MercadoLibre, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 312

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Pedro Arnt, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MercadoLibre, Inc. (the “registrant”);

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 321

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of MercadoLibre, Inc. (the “Company”) for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marcos Galperin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Marcos Galperin

Marcos Galperin

President and Chief Executive Officer

(Principal Executive Officer)

November 5, 2020

The foregoing certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 322

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of MercadoLibre, Inc. (the “Company”) for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Pedro Arnt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Pedro Arnt

Pedro Arnt

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

November 5, 2020

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 03, 2020
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-33647
Entity Registrant Name	MercadoLibre, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	98-0212790
Entity Address, Address Line One	Arias 3751
Entity Address, Address Line Two	7th Floor
Entity Address, City or Town	Buenos Aires
Entity Address, Country	AR
Entity Address, Postal Zip Code	C1430CRG
City Area Code	5411
Local Phone Number	4640-8000
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	MELI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		49,776,613
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001099590
Amendment Flag	false

Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,139,703	$ 1,384,740
Restricted cash and cash equivalents	484,426	66,684
Short-term investments (663,646 and 522,798 held in guarantee)	2,187,479	1,597,241
Accounts receivable, net	40,891	35,446
Credit cards receivable and other means of payments, net	660,402	379,969
Loans receivable, net	239,135	182,105
Prepaid expenses	28,387	45,309
Inventory	46,644	8,626
Other assets	96,824	88,736
Total current assets	4,923,891	3,788,856
Non-current assets:
Long-term investments	6,890	263,983
Loans receivable, net	15,073	6,439
Property and equipment, net	302,489	244,257
Operating lease right-of-use assets	225,345	200,449
Goodwill	79,064	87,609
Intangible assets, net	14,230	14,275
Deferred tax assets	125,012	117,582
Other assets	45,725	58,241
Total non-current assets	813,828	992,835
Total assets	5,737,719	4,781,691
Current liabilities:
Accounts payable and accrued expenses	509,095	372,309
Funds payable to customers	1,421,825	894,057
Salaries and social security payable	157,127	101,841
Taxes payable	212,729	60,247
Loans payable and other financial liabilities	618,164	186,138
Operating lease liabilities	39,620	23,259
Other liabilities	48,700	114,469
Total current liabilities	3,007,260	1,752,320
Non-current liabilities:
Salaries and social security payable	29,200	26,803
Loans payable and other financial liabilities	618,337	631,353
Operating lease liabilities	189,098	176,673
Deferred tax liabilities	72,061	99,952
Other liabilities	26,237	12,627
Total non-current liabilities	934,933	947,408
Total liabilities	3,942,193	2,699,728
Commitments and Contingencies (Note 9)
Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares authorized, 50,000 and 100,000 shares issued and outstanding at September 30, 2020 and December 31, 2019	49,427	98,843
Equity
Common stock, $0.001 par value, 110,000,000 shares authorized, 49,776,613 and 49,709,955 shares issued and outstanding at September 30, 2020 and December 31, 2019	50	50
Additional paid-in capital	1,930,984	2,067,869
Treasury stock	(40,391)	(720)
Retained earnings	364,967	322,592
Accumulated other comprehensive loss	(509,511)	(406,671)
Total Equity	1,746,099	1,983,120
Total Liabilities, Redeemable convertible preferred stock and Equity	$ 5,737,719	$ 4,781,691

Interim Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Interim Condensed Consolidated Balance Sheets [Abstract]
Short-term investments, held in guarantee	$ 663,646	$ 522,798
Redeemable convertible preferred stock, Par Value	$ 0.001	$ 0.001
Redeemable convertible preferred stock, Shares Authorized	40,000,000	40,000,000
Redeemable convertible preferred stock, Shares Issued	50,000	100,000
Redeemable convertible preferred stock, Shares Outstanding	50,000	100,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	110,000,000	110,000,000
Common stock, shares issued	49,776,613	49,709,955
Common stock, shares outstanding	49,776,613	49,709,955

Interim Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interim Condensed Consolidated Statements of Income [Abstract]
Net revenues	$ 1,115,701	$ 603,031	$ 2,646,161	$ 1,622,043
Cost of net revenues	(635,511)	(318,689)	(1,425,985)	(828,267)
Gross profit	480,190	284,342	1,220,176	793,776
Operating expenses:
Product and technology development	(88,796)	(59,495)	(235,485)	(165,787)
Sales and marketing	(229,621)	(252,903)	(620,204)	(564,271)
General and administrative	(78,699)	(53,869)	(211,669)	(147,992)
Total operating expenses	(397,116)	(366,267)	(1,067,358)	(878,050)
Income (loss) from operations	83,074	(81,925)	152,818	(84,274)
Other income (expenses):
Interest income and other financial gains	24,553	28,462	80,119	86,590
Interest expense and other financial losses	(24,522)	(14,451)	(75,083)	(44,689)
Foreign currency (losses) gains	(30,435)	987	(32,524)	(1,899)
Net income (loss) before income tax expense	52,670	(66,927)	125,330	(44,272)
Income tax expense	(37,635)	(79,155)	(75,457)	(73,729)
Net income (loss)	$ 15,035	$ (146,082)	$ 49,873	$ (118,001)
Basic EPS: Basic net income (loss)
Available to shareholders per common share	$ 0.28	$ (2.96)	$ 0.94	$ (2.60)
Weighted average of outstanding common shares	49,720,854	49,710,723	49,713,621	48,350,165
Diluted EPS: Diluted net income (loss)
Available to shareholders per common share	$ 0.28	$ (2.96)	$ 0.94	$ (2.60)
Weighted average of outstanding common shares	49,720,854	49,710,723	49,713,621	48,350,165

Interim Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interim Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income (loss)	$ 15,035	$ (146,082)	$ 49,873	$ (118,001)
Other comprehensive (loss) income, net of income tax:
Currency translation adjustment	(2,113)	(25,548)	(102,763)	(22,195)
Unrealized gains on hedging activities	572		5,550
Unrealized net gains (loss) on available for sale investments	(1,061)	(442)		2,062
Less: Reclassification adjustment for gains from accumulated other comprehensive (loss) income	1,548		5,627	2,729
Net change in accumulated other comprehensive (loss) income, net of income tax	(4,150)	(25,990)	(102,840)	(22,862)
Total Comprehensive (loss) income	$ 10,885	$ (172,072)	$ (52,967)	$ (140,863)

Interim Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Cumulative Effect Period Of Adoption Adjustment [Member] Retained Earnings [Member]	Cumulative Effect Period Of Adoption Adjustment [Member]	Cumulative Effect Period Of Adoption Adjusted Balance [Member] Common Stock [Member]	Cumulative Effect Period Of Adoption Adjusted Balance [Member] Additional Paid-in Capital [Member]	Cumulative Effect Period Of Adoption Adjusted Balance [Member] Treasury Stock [Member]	Cumulative Effect Period Of Adoption Adjusted Balance [Member] Retained Earnings [Member]	Cumulative Effect Period Of Adoption Adjusted Balance [Member] Accumulated Other Comprehensive Loss [Member]	Cumulative Effect Period Of Adoption Adjusted Balance [Member]	Common Stock [Member]	Common Stock Outstanding [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Beginning Balance at Dec. 31, 2018									$ 45		$ 224,800		$ 503,432	$ (391,577)	$ 336,700
Beginning Balance (in shares) at Dec. 31, 2018									45,203
Common Stock issued									$ 4		1,866,496				1,866,500
Common Stock issued (in shares)									4,116
Exercise of convertible notes											2				2
Unwind Capped Call											3				3
Net income (loss)													11,864		11,864
Amortization of Preferred Stock discount											5,841		(5,841)
Other comprehensive income (loss)														(1,011)	(1,011)
Ending Balance at Mar. 31, 2019									$ 49		2,097,142		509,455	(392,588)	2,214,058
Ending Balance (in shares) at Mar. 31, 2019									49,319
Beginning Balance at Dec. 31, 2018									$ 45		224,800		503,432	(391,577)	336,700
Beginning Balance (in shares) at Dec. 31, 2018									45,203
Redeemable convertible preferred stock dividend distribution ($9.99 per share)															(2,000)
Net income (loss)															(118,001)
Ending Balance at Sep. 30, 2019									$ 50		2,075,693	$ (720)	377,590	(414,439)	2,038,174
Ending Balance (in shares) at Sep. 30, 2019									49,710
Beginning Balance at Mar. 31, 2019									$ 49		2,097,142		509,455	(392,588)	2,214,058
Beginning Balance (in shares) at Mar. 31, 2019									49,319
Transaction Costs											715				715
Exercise of convertible notes											2				2
Capped Call											(88,362)				(88,362)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)													(1,000)		(1,000)
Net income (loss)													16,217		16,217
Other comprehensive income (loss)														4,139	4,139
Ending Balance at Jun. 30, 2019									$ 49		2,009,497		524,672	(388,449)	2,145,769
Ending Balance (in shares) at Jun. 30, 2019									49,319
Exercise of convertible notes									$ 1		65,952				65,953
Exercise of convertible notes (in shares)									523
Exercise of capped call option - shares retirement											30				30
Exercise of capped call option - shares retirement, (in shares)									(132)
Stock-based compensation - restricted shares issued											214				214
Stock-based compensation - restricted shares issued (in shares)									1
Common Stock repurchased												(720)			(720)
Common Stock repurchased (in shares)										(1)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)													(1,000)		(1,000)
Net income (loss)													(146,082)		(146,082)
Other comprehensive income (loss)														(25,990)	(25,990)
Ending Balance at Sep. 30, 2019									$ 50		2,075,693	(720)	377,590	(414,439)	2,038,174
Ending Balance (in shares) at Sep. 30, 2019									49,710
Beginning Balance at Dec. 31, 2019	$ (4,570)	$ (4,570)	$ 50	$ 2,067,869	$ (720)	$ 318,022	$ (406,671)	$ 1,978,550	$ 50		2,067,869	(720)	322,592	(406,671)	1,983,120
Beginning Balance (in shares) at Dec. 31, 2019			49,710						49,710
Stock-based compensation - restricted shares issued											179				179
Redeemable convertible preferred stock dividend distribution ($9.99 per share)													(1,000)		(1,000)
Net income (loss)													(21,109)		(21,109)
Other comprehensive income (loss)														(90,053)	(90,053)
Ending Balance at Mar. 31, 2020									$ 50		2,068,048	(720)	295,913	(496,724)	1,866,567
Ending Balance (in shares) at Mar. 31, 2020									49,710
Beginning Balance at Dec. 31, 2019	$ (4,570)	$ (4,570)	$ 50	$ 2,067,869	$ (720)	$ 318,022	$ (406,671)	$ 1,978,550	$ 50		2,067,869	(720)	322,592	(406,671)	1,983,120
Beginning Balance (in shares) at Dec. 31, 2019			49,710						49,710
Redeemable convertible preferred stock dividend distribution ($9.99 per share)															(2,928)
Net income (loss)															49,873
Ending Balance at Sep. 30, 2020									$ 50		1,930,984	(40,391)	364,967	(509,511)	1,746,099
Ending Balance (in shares) at Sep. 30, 2020									49,777
Beginning Balance at Mar. 31, 2020									$ 50		2,068,048	(720)	295,913	(496,724)	1,866,567
Beginning Balance (in shares) at Mar. 31, 2020									49,710
Stock-based compensation - restricted shares issued											187				187
Stock-based compensation - restricted shares issued (in shares)									1
Common Stock repurchased												(720)			(720)
Common Stock repurchased (in shares)									(1)
Capped Call											(104,095)				(104,095)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)													(1,000)		(1,000)
Net income (loss)													55,947		55,947
Other comprehensive income (loss)														(8,637)	(8,637)
Ending Balance at Jun. 30, 2020									$ 50		1,964,140	(1,440)	350,860	(505,361)	1,808,249
Ending Balance (in shares) at Jun. 30, 2020									49,710
Common Stock issued											49,344				49,344
Common Stock issued (in shares)									104
Stock-based compensation - restricted shares issued											182				182
Common Stock repurchased												(38,951)			(38,951)
Common Stock repurchased (in shares)										(37)
Capped Call											(82,682)				(82,682)
Redeemable convertible preferred stock dividend distribution ($9.99 per share)													(928)		(928)
Net income (loss)													15,035		15,035
Other comprehensive income (loss)														(4,150)	(4,150)
Ending Balance at Sep. 30, 2020									$ 50		$ 1,930,984	$ (40,391)	$ 364,967	$ (509,511)	$ 1,746,099
Ending Balance (in shares) at Sep. 30, 2020									49,777

Interim Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019
Interim Condensed Consolidated Statements of Equity [Abstract]
Redeemable convertible preferred stock dividend distribution, price per share	$ 9.99	$ 9.99	$ 9.99	$ 9.99	$ 9.99

Interim Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Cash flows from operations:

Net income (loss)

$ 49,873

$ (118,001)

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

Unrealized devaluation loss, net

59,471

45,857

Depreciation and amortization

72,436

52,518

Accrued interest

(37,550)

(39,550)

Non cash interest, convertible notes amortization of debt discount and amortization of debt issuance costs and other charges

94,492

73,077

Financial results on derivative instruments

(26,535)

(3,308)

Stock-based compensation expense - restricted shares

548

214

LTRP accrued compensation

75,142

48,313

Sale of fixed assets and intangible assets

3,814

Deferred income taxes

(58,485)

29,640

Changes in assets and liabilities:

Accounts receivable

51,250

1,464

Credit cards receivables and other means of payments

(351,397)

65,968

Prepaid expenses

15,627

9,338

Inventory

(40,322)

(5,939)

Other assets

(18,240)

(24,259)

Payables and accrued expenses

357,804

88,918

Funds payable to customers

711,987

95,079

Other liabilities

(69,829)

18,113

Interest received from investments

35,909

35,375

Net cash provided by operating activities

925,995

372,817

Cash flows from investing activities:

Purchase of investments

(3,600,715)

(3,262,637)

Proceeds from sale and maturity of investments

3,081,643

2,240,468

Receipts from settlements of derivative instruments

17,779

Payment for acquired businesses, net of cash acquired

(6,937)

Receipts from the sale of fixed assets and intangible assets

274

Purchases of intangible assets

(93)

(50)

Changes in principal of loans receivable, net

(170,284)

(150,442)

Purchases of property and equipment

(159,797)

(100,732)

Net cash used in investing activities

(838,130)

(1,273,393)

Cash flows from financing activities:

Proceeds from loans payable and other financial liabilities

1,890,156

171,603

Payments on loans payable and other financing liabilities

(1,415,845)

(104,062)

Payment of finance lease obligations

(2,499)

(1,416)

Purchase of convertible note capped call

(186,777)

(88,362)

Dividends paid of preferred stock

(3,000)

(1,844)

Common Stock repurchased

(39,671)

(720)

Payments on convertible notes

(25)

Proceeds from issuance of convertible redeemable preferred stock, net

98,688

Proceeds from issuance of common stock, net

1,867,215

Net cash provided by financing activities

242,364

1,941,077

Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents

(157,524)

(48,231)

Net increase in cash, cash equivalents, restricted cash and cash equivalents

172,705

992,270

Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period

1,451,424

^[1]

464,695

Cash, cash equivalents, restricted cash and cash equivalents, end of the period

$ 1,624,129

^[1]

$ 1,456,965

[1]	Cash, cash equivalents, restricted cash and cash equivalents as reported in the consolidated statements of cash flow.

Nature of Business	9 Months Ended
Nature of Business	Sep. 30, 2020
Nature of Business [Abstract]
Nature of Business	1. Nature of Business MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in the state of Delaware, in the United States of America in October 1999. MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of necessary online and technology tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for vehicles, services and real estate), which allows users to buy and sell in most of Latin America. Through Mercado Pago, the FinTech solution, MercadoLibre enables individuals and businesses to send and receive online payments; through Mercado Envios, MercadoLibre facilitates the shipping of goods from sellers to buyers; through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their product and services on the web; through Mercado Shops, MercadoLibre allows users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model; through Mercado Credito, MercadoLibre extends loans to certain merchants and consumers; and through Mercado Fondo, MercadoLibre allows users to invest funds deposited in their Mercado Pago accounts. As of September 30, 2020, MercadoLibre, through its wholly-owned subsidiaries, operated online ecommerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates its FinTech solution in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia, Chile and Uruguay.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of significant accounting policies

Basis of presentation

‎

Revenue recognition

Contract Balances

Allowances for doubtful accounts on accounts receivable and loans receivable

Measurement of current expected credit losses

Loans Receivable

Loans Receivable in this portfolio include the products that the company offers to: 1) on-line merchant, 2) in-store merchant and 3) consumers.

‎

The Company writes off loans receivable when the customer balance becomes 90 days past due.

Accounts Receivable

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

Cash and cash equivalents, restricted cash and cash equivalents, short-term investments and credit cards receivable and other means of payment

Foreign currency translation

Argentine currency status

‎


	September 30,	December 31,
	2020	2019
	(In thousands)
Assets	$ 1,213,172	$ 805,605
Liabilities	997,615	580,402
Net Assets	$ 215,557	$ 225,203

Derivative Financial Instruments

Treasury Stock

Income taxes

The Company is currently assessing whether it will be eligible to benefit from the new law and related tax benefits, such eligibility remaining subject to Argentine government approval.

Fair value option applied to certain financial instruments

Accumulated other comprehensive loss

The following table sets forth the Company’s accumulated other comprehensive loss as of September 30, 2020 and December 31, 2019:


	September 30,	December 31,
	2020	2019
	(In thousands)
Accumulated other comprehensive loss:
Foreign currency translation	$ (510,862)	$ (408,099)
Unrealized gains on investments	—	2,029
Unrealized gains (losses) on hedging activities	1,812	(250)
Estimated tax expense on unrealized gains	(461)	(351)
	$ (509,511)	$ (406,671)

The following tables summarize the changes in accumulated balances of other comprehensive loss for the nine-months ended September 30, 2020:



	Unrealized	Unrealized	Foreign	Estimated tax
	(Losses) Gains on	(Losses) Gains on	Currency	(expense)
	hedging activities, net	Investments	Translation	benefit	Total
		(In thousands)
Balances as of December 31, 2019	$ (250)	$ 2,029	$ (408,099)	$ (351)	$ (406,671)
Other comprehensive income (loss) before reclassifications	8,047	—	(102,763)	(2,497)	(97,213)
Amount of loss (gain) reclassified from accumulated other comprehensive loss	(5,985)	(2,029)	—	2,387	(5,627)
Net current period other comprehensive income (loss)	2,062	(2,029)	(102,763)	(110)	(102,840)
Ending balance	$ 1,812	$ —	$ (510,862)	$ (461)	$ (509,511)



	Amount of (Loss) Gain
	Reclassified from
Details about Accumulated	Accumulated Other
Other Comprehensive Loss	Comprehensive	Affected Line Item
Components	Loss	in the Statement of Income
	(In thousands)
Unrealized gains on investments	$ 2,029	Interest income and other financial gains
Unrealized gains on hedging activities	5,985	Cost of net revenues
Estimated tax expense on unrealized gains	(2,387)	Income tax expense
Total reclassifications for the period	$ 5,627	Total, net of income taxes

Use of estimates

Recently Adopted Accounting Standards

Recently issued accounting pronouncements not yet adopted

Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2020

Net Income (Loss) Per Share [Abstract]

Net Income (Loss) Per Share

3. Net income (loss) per share

Net income (loss) per share of common stock is as follows for the nine and three-month periods ended September 30, 2020 and 2019:


	Nine Months Ended September 30,				Three Months Ended September 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
	Basic	Diluted	Basic	Diluted	Basic	Diluted	Basic	Diluted
Net income (loss) per common share	$ 0.94	$ 0.94	$ (2.60)	$ (2.60)	$ 0.28	$ 0.28	$ (2.96)	$ (2.96)

Numerator:
Net income (loss)	$ 49,873	$ 49,873	$ (118,001)	$ (118,001)	$ 15,035	$ 15,035	$ (146,082)	$ (146,082)
Amortization of redeemable convertible preferred stock	—	—	(5,841)	(5,841)	—	—	—	—
Dividends on preferred stock	(2,928)	(2,928)	(2,000)	(2,000)	(928)	(928)	(1,000)	(1,000)
Net income corresponding to common stock	$ 46,945	$ 46,945	$ (125,842)	$ (125,842)	$ 14,107	$ 14,107	$ (147,082)	$ (147,082)

Denominator:
Weighted average of common stock outstanding for Basic earnings per share	49,713,621	—	48,350,165	—	49,720,854	—	49,710,723	—
Adjusted weighted average of common stock outstanding for Diluted earnings per share	—	49,713,621	—	48,350,165	—	49,720,854	—	49,710,723

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments

9 Months Ended

Sep. 30, 2020

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments [Abstract]

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments

4. Cash, cash equivalents, restricted cash and cash equivalent and investments

The composition of cash, cash equivalents, restricted cash and cash equivalents, short-term and long-term investments is as follows:


	September 30,	December 31,
	2020	2019
	(In thousands)
Cash and cash equivalents	$ 1,139,703	$ 1,384,740
Restricted cash and cash equivalents
Securitization Transactions	$ 29,274	$ 37,424
Sovereign Debt Securities (Secured lines of credit guarantee)	—	29,260
Bank account (Argentine Central Bank regulation)	226,689	—
Bank collateral account (*)	224,995	—
Time Deposits	3,333	—
Cash in bank account	135	—
Total restricted cash and cash equivalents	$ 484,426	$ 66,684
Total cash, cash equivalents, restricted cash and cash equivalents (**)	$ 1,624,129	$ 1,451,424

Short-term investments
Time Deposits	$ 315,930	$ 189,660
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)	591,860	506,175
Sovereign Debt Securities (Secured lines of credit guarantee)	71,786	16,623
Sovereign Debt Securities	1,207,903	884,720
Corporate Debt Securities	—	63
Total short-term investments	$ 2,187,479	$ 1,597,241

Long-term investments
Sovereign Debt Securities	$ —	$ 260,320
Corporate Debt Securities	—	173
Other Investments	6,890	3,490
Total long-term investments	$ 6,890	$ 263,983

(*) Cash deposited and owned by the Company under the sole control and dominion of escrow agents as collateral of loans granted to a Brazilian subsidiary with due date in October 2020.

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

Regulation issued by Central Bank of Argentina (“CBA”)

Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)

Loans Receivable, Net

9 Months Ended

Sep. 30, 2020

Loans Receivable, Net [Abstract]

Loans Receivable, Net

5. Loans receivable, net

The Company manages loans receivable as “On-line merchant”, “Consumer” and “In-store merchant”. As of September 30, 2020 and December 31, 2019, Loans receivable, net were as follows:



		September 30,		December 31,
		2020		2019
	(In thousands)
On-line merchant	$	137,386	$	130,102
Consumer		117,540		60,179
In-store merchant		29,284		18,707
Loans receivable		284,210		208,988
Allowance for uncollectible accounts		(30,002)		(20,444)
Loans receivable, net	$	254,208	$	188,544

Current	$	239,135	$	182,105
Non-current		15,073		6,439
Loans receivable, net	$	254,208	$	188,544

The credit quality analysis of loans receivable was as follows:


		September 30,		December 31,
		2020		2019
	(In thousands)
1-30 days past due	$	18,734	$	20,430
31-60 days past due		5,275		6,916
61 -90 days past due		4,937		7,580
Total past due		28,946		34,926
To become due		255,264		174,062
Total	$	284,210	$	208,988

The following table summarizes the allowance for uncollectible accounts activity during the nine-month period ended September 30, 2020 and 2019:



	September 30,
		2020		2019 (1)
	(In thousands)
Balance at beginning of year	$	20,444	$	6,636
Adoption of ASC 326 (2)		4,977		-
Charged/credited to Net income (loss)		49,033		48,892
Charges/Utilized /Currency translation adjustments/Write-offs		(44,452)		(10,934)
Balance at end of period	$	30,002	$	44,594


(1)	The comparative information has not been restated and continues to be reported under the accounting standard in effect during 2019.
(2)	Cumulative pre-tax adjustments recorded to retained earnings as of January 1, 2020.

Business Combinations, Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Business Combinations, Goodwill and Intangible Assets [Abstract]

Business Combinations, Goodwill and Intangible Assets

6. Business combinations, goodwill and intangible assets

Business combinations

Acquisition of a software development company

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

Goodwill and intangible assets

The composition of goodwill and intangible assets is as follows:


	September 30,	December 31,
	2020	2019
	(In thousands)
Goodwill	$ 79,064	$ 87,609
Intangible assets with indefinite lives
- Trademarks	7,253	8,366
Amortizable intangible assets
- Licenses and others	4,715	5,320
- Non-compete agreement	3,276	2,703
- Customer list	12,909	13,900
- Trademarks	7,187	4,723
Total intangible assets	$ 35,340	$ 35,012
Accumulated amortization	(21,110)	(20,737)
Total intangible assets, net	$ 14,230	$ 14,275

‎

Goodwill

The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2020 and the year ended December 31, 2019 are as follows:


	Nine Months Ended September 30, 2020
	Brazil	Argentina	Mexico	Chile	Colombia	Other Countries	Total
	(In thousands)
Balance, beginning of the period	$ 29,072	$ 6,991	$ 32,196	$ 14,872	$ 3,312	$ 1,166	$ 87,609
Business Acquisitions	—	3,603	1,062	1,241	1,246	748	7,900
Disposals	(3,480)	—	—	—	—	—	(3,480)
Effect of exchange rates changes	(7,048)	—	(4,495)	(705)	(613)	(104)	(12,965)
Balance, end of the period	$ 18,544	$ 10,594	$ 28,763	$ 15,408	$ 3,945	$ 1,810	$ 79,064


	Year Ended December 31, 2019
	Brazil	Argentina	Mexico	Chile	Colombia	Other Countries	Total
	(In thousands)
Balance, beginning of the year	$ 30,069	$ 6,946	$ 31,340	$ 16,014	$ 3,339	$ 1,175	$ 88,883
Purchase price allocations adjustments	—	45	—	—	—	—	45
Effect of exchange rates changes	(997)	—	856	(1,142)	(27)	(9)	(1,319)
Balance, end of the year	$ 29,072	$ 6,991	$ 32,196	$ 14,872	$ 3,312	$ 1,166	$ 87,609

Intangible assets with definite useful life

The following table summarizes the remaining amortization of intangible assets (in thousands of U.S. dollars) with definite useful life as of September 30, 2020:


For year ended 12/31/2020		$ 1,085
For year ended 12/31/2021		3,449
For year ended 12/31/2022		1,295
For year ended 12/31/2023		899
Thereafter		249
		$ 6,977

‎

Segment Reporting

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

7. Segment reporting

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


	Nine Months Ended September 30, 2020
	Brazil	Argentina	Mexico	Other Countries	Total
	(In thousands)
Net revenues	$ 1,473,466	$ 656,825	$ 371,085	$ 144,785	$ 2,646,161
Direct costs	(1,148,926)	(465,806)	(370,229)	(115,759)	(2,100,720)
Direct contribution	324,540	191,019	856	29,026	545,441

Operating expenses and indirect costs of net revenues					(392,623)
Income from operations					152,818

Other income (expenses):
Interest income and other financial gains					80,119
Interest expense and other financial losses					(75,083)
Foreign currency losses					(32,524)
Net income before income tax expense					$ 125,330

‎



	Nine Months Ended September 30, 2019
	Brazil	Argentina	Mexico	Other Countries	Total
	(In thousands)
Net revenues	$ 1,033,183	$ 323,892	$ 190,308	$ 74,660	$ 1,622,043
Direct costs	(871,964)	(239,943)	(254,318)	(70,733)	(1,436,958)
Direct contribution	161,219	83,949	(64,010)	3,927	185,085

Operating expenses and indirect costs of net revenues					(269,359)
Loss from operations					(84,274)

Other income (expenses):
Interest income and other financial gains					86,590
Interest expense and other financial losses					(44,689)
Foreign currency losses					(1,899)
Net loss before income tax expense					$ (44,272)


		Three Months Ended September 30, 2020
		Brazil	Argentina	Mexico	Other Countries	Total
		(In thousands)
Net revenues		$ 610,721	$ 284,746	$ 150,382	$ 69,852	$ 1,115,701
Direct costs		(501,544)	(193,373)	(144,914)	(53,212)	(893,043)
Direct contribution		109,177	91,373	5,468	16,640	222,658

Operating expenses and indirect costs of net revenues						(139,584)
Income from operations						83,074

Other income (expenses):
	Interest income and other financial gains					24,553
	Interest expense and other financial losses					(24,522)
	Foreign currency losses					(30,435)
Net income before income tax expense						$ 52,670


		Three Months Ended September 30, 2019
		Brazil	Argentina	Mexico	Other Countries	Total
		(In thousands)
Net revenues		$ 389,941	$ 116,203	$ 71,364	$ 25,523	$ 603,031
Direct costs		(370,704)	(88,542)	(103,517)	(25,845)	(588,608)
Direct contribution		19,237	27,661	(32,153)	(322)	14,423

Operating expenses and indirect costs of net revenues						(96,348)
Loss from operations						(81,925)

Other income (expenses):
	Interest income and other financial gains					28,462
	Interest expense and other financial losses					(14,451)
	Foreign currency gains					987
Net loss before income tax expense						$ (66,927)

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


	September 30,	December 31,
	2020	2019
	(In thousands)
US property and equipment, net	$ 1,395	$ 937
Other countries
Argentina	115,700	100,536
Brazil	121,724	103,571
Mexico	46,488	30,131
Other countries	17,182	9,082
	$ 301,094	$ 243,320
Total property and equipment, net	$ 302,489	$ 244,257

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


	September 30,	December 31,
	2020	2019
	(In thousands)
Other countries goodwill and intangible assets
Argentina	$ 13,223	$ 8,632
Brazil	18,793	30,142
Mexico	32,180	36,003
Chile	22,685	22,237
Other countries	6,413	4,870
Total goodwill and intangible assets	$ 93,294	$ 101,884

Consolidated net revenues by similar products and services for the nine and three-month periods ended September 30, 2020 and 2019 were as follows:


	Nine Months Ended September 30,		Three months Ended September 30,

Consolidated Net Revenues	2020	2019	2020	2019
	(In thousands)		(In thousands)
Commerce (*)	$ 1,686,879	$ 957,029	$ 724,466	$ 346,208
Fintech	959,282	665,014	391,235	256,823
Total	$ 2,646,161	$ 1,622,043	$ 1,115,701	$ 603,031

(*) Includes marketplace fees, shipping fees, ad sales, classified fees and other ancillary services.

‎

Fair Value Measurement of Assets and Liabilities

9 Months Ended

Sep. 30, 2020

Fair Value Measurement of Assets and Liabilities [Abstract]

Fair Value Measurement of Assets and Liabilities

8. Fair value measurement of assets and liabilities

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019:


		Quoted Prices in				Quoted Prices in
	Balances as of	active markets for	Significant other	Unobservable	Balances as of	active markets for	Significant other	Unobservable
	September 30,	identical Assets	observable inputs	inputs	December 31,	identical Assets	observable inputs	inputs
Description	2020	(Level 1)	(Level 2)	(Level 3)	2019	(Level 1)	(Level 2)	(Level 3)
	(In thousands)
Assets
Cash and Cash Equivalents:
Money Market Funds	$ 322,829	$ 322,829	$ —	$ —	$ 688,760	$ 688,760	$ —	$ —
Sovereign Debt Securities	—	—	—	—	32,874	32,874	—	—
Restricted Cash and cash equivalents:
Money Market Funds	13,559	13,559	—	—	32,829	32,829	—	—
Sovereign Debt Securities	—	—	—	—	29,260	29,260	—	—
Investments:
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)	591,860	591,860	—	—	506,175	506,175	—	—
Sovereign Debt Securities	1,279,689	1,279,689	—	—	1,161,663	1,161,663	—	—
Corporate Debt Securities	—	—	—	—	236	178	58	—
Other Assets:
Derivative Instruments	11,858	—	—	11,858	1,249	—	—	1,249
Total Financial Assets	$ 2,219,795	$ 2,207,937	$ —	$ 11,858	$ 2,453,046	$ 2,451,739	$ 58	$ 1,249
Liabilities:
Contingent considerations	$ 4,555	$ —	$ —	$ 4,555	$ 2,201	$ —	$ —	$ 2,201
Long-term retention plan	86,608	—	86,608	—	60,958	—	60,958	—
Derivative Instruments	1,642	—	—	1,642	251	—	—	251
Total Financial Liabilities	$ 92,805	$ —	$ 86,608	$ 6,197	$ 63,410	$ —	$ 60,958	$ 2,452

‎

The following table summarizes the fair value level for those financial assets and liabilities of the Company measured at amortized cost as of September 30, 2020 and December 31, 2019:



	Balances as of	Significant other	Balances as of	Significant other
	September 30,	observable inputs	December 31,	observable inputs
	2020	(Level 2)	2019	(Level 2)
	(In thousands)
Assets
Time Deposits	$ 315,930	$ 315,930	$ 189,660	$ 189,660
Accounts receivable, net	40,891	40,891	35,446	35,446
Credit Cards receivable and other means of payment, net	660,402	660,402	379,969	379,969
Loans receivable, net	254,208	254,208	188,544	188,544
Other assets	137,581	137,581	149,218	149,218
Total Assets	$ 1,409,012	$ 1,409,012	$ 942,837	$ 942,837
Liabilities
Accounts payable and accrued expenses	$ 509,095	$ 509,095	$ 372,309	$ 372,309
Funds payable to customers	1,421,825	1,421,825	894,057	894,057
Salaries and social security payable	99,719	99,719	67,686	67,686
Taxes payable	212,729	212,729	60,247	60,247
Loans payable and other financial liabilities (*)	1,236,501	1,320,251	817,491	927,903
Other liabilities	68,740	68,740	124,644	124,644
Total Liabilities	$ 3,548,609	$ 3,632,359	$ 2,336,434	$ 2,446,846

(*) The fair value of the 2028 Notes (including the equity component) is disclosed in Note 11.

As of September 30, 2020 and December 31, 2019, the Company held no direct investments in auction rate securities and does not have any non-financial assets or liabilities measured at fair value.

‎

As of September 30, 2020 and December 31, 2019, the fair value of money market funds, sovereign and corporate debt securities classified as available for sale securities are as follows:



	September 30, 2020
	Cost	Financial Gains	Financial Losses	Estimated Fair Value

	(In thousands)
Cash and cash equivalents
Money Market Funds	$ 322,829	$ —	$ —	$ 322,829
Total Cash and cash equivalents	$ 322,829	$ —	$ —	$ 322,829

Restricted cash and cash equivalents
Money Market Funds	$ 13,559	$ —	$ —	$ 13,559
Total Restricted cash and cash equivalents	$ 13,559	$ —	$ —	$ 13,559

Short-term investments
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee) (1)	$ 587,983	$ 3,877	$ —	$ 591,860
Sovereign Debt Securities (1)	1,274,654	5,089	(54)	1,279,689
Total Short-term investments	$ 1,862,637	$ 8,966	$ (54)	$ 1,871,549

Total	$ 2,199,025	$ 8,966	$ (54)	$ 2,207,937

‎


	December 31, 2019
	Cost	Gross Unrealized Gains⁽¹⁾	Financial Gains	Financial Losses	Estimated Fair Value

	(In thousands)
Cash and cash equivalents
Money Market Funds	$ 688,760	$ —	$ —	$ —	$ 688,760
Sovereign Debt Securities	32,851	—	23	—	32,874
Total Cash and cash equivalents	$ 721,611	$ —	$ 23	$ —	$ 721,634

Restricted Cash and cash equivalents
Money Market Funds	$ 32,829	$ —	$ —	$ —	$ 32,829
Sovereign Debt Securities (2)	29,227	—	33	—	29,260
Total Restricted Cash and cash equivalents	$ 62,056	$ —	$ 33	$ —	$ 62,089

Short-term investments
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)(3)	$ 504,195	$ —	$ 1,980	$ —	$ 506,175
Sovereign Debt Securities (4)	898,922	2,080	400	(59)	901,343
Corporate Debt Securities	63	—	—	—	63
Total Short-term investments	$ 1,403,180	$ 2,080	$ 2,380	$ (59)	$ 1,407,581

Long-term investments
Sovereign Debt Securities (5)	$ 260,400	$ 2	$ 1	$ (83)	$ 260,320
Corporate Debt Securities	170	3	—	—	173
Total Long-term investments	$ 260,570	$ 5	$ 1	$ (83)	$ 260,493

Total	$ 2,447,417	$ 2,085	$ 2,437	$ (142)	$ 2,451,797

(2)Held by the Company’s Argentine subsidiary in guarantee for secured lines of credit. (See Note 11 – Loans payable and other financial liabilities.)

The material portion of the Sovereign Debt Securities consists of U.S. Treasury Notes, which carry no significant risk.

‎

As of September 30, 2020, the estimated fair values (in thousands of U.S. dollars) of money market funds and sovereign debt securities classified by their effective maturities are as follows:


One year or less		2,207,937
Total		$ 2,207,937

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Litigation and Other Legal Matters

Brazilian preliminary injunction against the Brazilian tax authorities

Buyer protection program

Commitments

The Company entered into a purchase commitment with two U.S. suppliers in relation to the purchase of cloud platform services as follows:

a)for a total amount of $240,500 thousands to be fully paid off between June 1, 2020 and May 31, 2024. As of September 30, 2020, the Company paid $14,007 thousands; and

b)for a total amount of $30,000 thousands to be fully paid off between November 24, 2019 and March 23, 2023. As of September 30, 2020, the Company paid $2,392 thousands in relation thereto.

Long Term Retention Program

9 Months Ended

Sep. 30, 2020

Long Term Retention Program [Abstract]

Long Term Retention Program

10. Long term retention program (“LTRP”)


		Nine Months Ended September 30,				Three Months Ended September 30,
		2020		2019	2020		2019
		(In thousands)			(In thousands)
LTRP 2011		—		26		—		—
LTRP 2012		69		1,827		—		411
LTRP 2013		—		97		—		—
LTRP 2014		125		3,726		—		903
LTRP 2015		6,338		6,410		1,453		1,548
LTRP 2016		13,010		10,063		2,955		2,456
LTRP 2017		13,892		9,530		3,332		2,554
LTRP 2018		6,941		4,708		1,578		1,385
LTRP 2019		16,061		11,926		5,741		6,848
LTRP 2020		18,706		—		8,176		—
Total LTRP	$	75,142	$	48,313	$	23,235	$	16,105

‎

Loans Payable And Other Financial Liabilities

9 Months Ended

Sep. 30, 2020

Loans Payable And Other Financial Liabilities [Abstract]

Loans Payable And Other Financial Liabilities

11. Loans payable and other financial liabilities

The following table summarizes the Company’s Loans payable and other financial liabilities as of September 30, 2020 and December 31, 2019:


							Book value as of

Type of instrument	Currency	Interest	Weighted Average Interest ‎Rate		Maturity		September 30, 2020		December 31, 2019
							(In thousands)
Current loans payable and other financial liabilities:
Loans from banks
Chilean Subsidiary	Chilean Pesos	Fixed	1.68	%	October 2020	$	64,727	$	38,780
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.35	%	March 2021		63,902		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.90	%	October 2020		5,471		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.25	%	May 2021		39,915		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 2.9	%	December 2020		9,004		-
Mexican Subsidiary	Mexican Peso	Variable	TIIE + 2.55	%	October 2020		16,555		-
Argentine Subsidiary	Argentine Pesos	Fixed	32.50	%	November 2020		13,326		-
Uruguayan Subsidiary	Uruguayan Pesos	Fixed	7.51	%	March 2021		8,224		-

Secured lines of credit
Argentine Subsidiary	Argentine Pesos	-	-	%	-		-		49,499
Brazilian Subsidiary (*)	Brazilian Reais	Variable	CDI + 1.00	%	October 2020		100,692		-
Brazilian Subsidiary (*)	Brazilian Reais	Variable	CDI + 1.50	%	October 2020		97,140		-
Brazilian Subsidiary (**)	Brazilian Reais	Variable	CDI + 0.55	%	July 2021		53,516		-

Unsecured lines of credit
Uruguayan Subsidiary	Uruguayan Pesos	Fixed	8.21	%	October 2020		17,870		16,435
Argentine Subsidiary	Argentine Pesos	Fixed	24.06	%	October 2020		69,020		9,645
Chilean Subsidiary	Chilean Pesos	-	-	%	-		-		1,951

Convertible notes							2,249		6,649
Finance lease obligations							2,168		2,008
Credit card collateralized debt							10,679		17,309
Collateralized debt							43,589		43,862
Other lines of credit							117		-
						$	618,164	$	186,138

Non Current loans payable and other financial liabilities:
Convertible notes							588,993		569,305
Finance lease obligations							5,538		7,368
Collateralized debt							23,806		54,680
						$	618,337	$	631,353

(*)	Under the terms of the loans agreements, the Company transferred cash to deposit accounts owned by the Company but under the sole control and dominion of escrow agents as collaterals. These collaterals are shown in Restricted cash and cash equivalents of the consolidated balance sheet.
(**)	Under the terms of the loan agreement, the Company transferred U.S. treasury notes to an account owned by the Company but under the sole control and dominion of the escrow agent as collateral. This collateral is shown in Short-term investments of the consolidated balance sheet.

Convertible Senior Notes

2.00% Convertible Senior Notes Due 2028

The following table presents the carrying amounts of the liability and equity components related to the 2028 Notes as of September 30, 2020 and December 31, 2019:


	September 30, 2020		December 31, 2019
	(In thousands)
Amount of the equity component (1)	$	327,305	$	327,305

2.00% Convertible Senior Notes due 2028	$	879,998	$	880,000
Unamortized debt discount (2)		(281,958)		(301,227)
Unamortized transaction costs related to the debt component		(9,047)		(9,468)
Contractual coupon interest accrual		37,009		23,809
Contractual coupon interest payment		(34,760)		(17,160)
Net carrying amount	$	591,242	$	575,954

(1)Net of $6,163 thousands of transaction costs related to the equity component of the 2028 Notes.

(2)As of September 30, 2020, the remaining period over which the unamortized debt discount will be amortized is 8.0 years.

‎

The following table presents the interest expense for the contractual interest, the accretion of debt discount and the amortization of debt issuance costs:


	Nine month periods ended September 30,				Three month periods ended September 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
Contractual coupon interest expense	$	13,200	$	13,542	$	4,400	$	4,400
Amortization of debt discount		19,269		18,366		6,542		6,081
Amortization of debt issuance costs		421		362		146		123
Total interest expense related to the 2028 Notes	$	32,890	$	32,270	$	11,088	$	10,604

Equity Offerings

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Equity Offerings

12. Equity Offerings

In the aggregate, the Company raised funds in the amount of $1,965,903 thousands net of issuance costs paid in the amount of $34,097 thousands.

In September 2020, a holder converted 50,000 shares of Preferred Stock into 104,230 shares of the Company’s Common Stock.

Securitization Transactions

9 Months Ended

Sep. 30, 2020

Securitization Transactions [Abstract]

Securitization Transactions

13. Securitization Transactions

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

The assets and liabilities of the SPEs are included in the Company’s interim condensed consolidated financial statements as of September 30, 2020 and December 31, 2019 as follows:



	September 30,		December 31,
	2020		2019
Assets	(In thousands)
Current assets:
Restricted cash and cash equivalents	$	29,274	$	37,424
Loans receivable, net		67,986		104,419
Total current assets		97,260		141,843
Non-current assets:
Loans receivable, net		4,786		4,395
Total non-current assets		4,786		4,395
Total assets	$	102,046	$	146,238
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	67	$	128
Loans payable and other financial liabilities		43,589		43,862
Total current liabilities		43,656		43,990
Non-current liabilities:
Loans payable and other financial liabilities		23,806		54,680
Total non-current liabilities		23,806		54,680
Total liabilities	$	67,462	$	98,670

‎

Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

14. Leases

Supplemental balance sheet information related to leases was as follows:


		September 30,		December 31,
		2020		2019
Operating Leases	(In thousands)
Operating lease right-of-use assets	$	225,345	$	200,449

Operating lease liabilities	$	228,718	$	199,932

Finance Leases
Property and equipment, at cost		12,357		10,952
Accumulated depreciation		(3,247)		(1,563)
Property and equipment, net	$	9,110	$	9,389

Loans payable and other financial liabilities	$	7,706	$	9,376


Weighted average remaining lease term
Operating leases	8	Years
Finance leases	3	Years


Weighted average discount rate (*)
Operating leases	10	%
Finance leases	17	%

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

The components of lease expense were as follows:


		Nine months ended September 30,
		2020		2019
	(In thousands)
Operating lease cost	$	29,941	$	21,503

Finance lease cost:
Depreciation of property and equipment		1,564		1,024
Interest on lease liabilities		1,199		1,110
Total finance lease cost	$	2,763	$	2,134

‎

Supplemental cash flow information related to leases was as follows:


	Nine months ended September 30,
		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	(In thousands)
Operating cash flows from operating leases	$	28,705	$	17,315
Financing cash flows from finance leases		2,499		1,416


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	73,340	$	69,154
Finance leases		1,487		4,379


Period Ending September 30, 2020		Operating Leases		Finance Leases
	(In thousands)
One year or less	$	45,405	$	3,296
One year to two years		43,580		3,296
Two years to three years		40,915		3,110
Three years to four years		39,373		1,259
Four years to five years		35,551		—
Thereafter		113,885		—
Total lease payments	$	318,709	$	10,961
Less imputed interest		(89,991)		(3,255)
Total	$	228,718	$	7,706

Derivative Instruments

9 Months Ended

Sep. 30, 2020

Derivative Instruments [Abstract]

Derivative Instruments

15. Derivative instruments

‎

Foreign exchange contracts

The fair values of the Company’s outstanding derivative instruments as of September 30, 2020 and December 31, 2019 were as follows:


			September 30,		December 31,
	Balance sheet location		2020		2019
		(In thousands)
Derivatives
Foreign exchange contracts not designated as hedging instruments	Other current assets	$	10,594	$	1,249
Foreign exchange contracts designated as cash flow hedges	Other current assets		1,264		—
Foreign exchange contracts not designated as hedging instruments	Other current liabilities		1,642		—
Foreign exchange contracts designated as cash flow hedges	Other current liabilities		—		251

The effects of derivative contracts on unaudited interim condensed consolidated of comprehensive income as of September 30, 2020 were as follows:

Amount of

Amount of gain reclassified

December 31,

Gain (Loss) recognized

from accumulated

September 30,

2019

in other comprehensive loss

other comprehensive loss (income)

2020

(In thousands)

Foreign exchange contracts designated as cash flow hedges

$ (250)

$ 8,047

$ (5,985)

$ 1,812

The effects of derivative contracts on unaudited interim condensed consolidated statement of income for the nine and three-month periods ended September 30, 2020 and 2019 were as follows:


		Nine month periods ended September 30,				Three month periods ended September 30,
	2020		2019		2020		2019
		(In thousands)				(In thousands)
Foreign exchange contracts not designated as hedging instruments	$	26,535	$	3,308	$	4,709	$	3,239
Loss from foreign exchange contracts designated as fair value hedges		—		442		—		1,472
Gain from hedged items attributable to hedged risks		—		(442)		—		(1,472)

Share Repurchase Program

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Share Repurchase Program

16. Share repurchase program

Impact of COVID-19 Pandemic

9 Months Ended

Sep. 30, 2020

Impact of COVID-19 Pandemic [Abstract]

Impact of COVID-19 Pandemic

17. Impact of COVID-19 pandemic

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation

Revenue Recognition

Revenue recognition

Contract Balances

Allowances for Doubtful Accounts on Accounts Receivable and Loans Receivable

Allowances for doubtful accounts on accounts receivable and loans receivable

Measurement of current expected credit losses

Loans Receivable

Loans Receivable in this portfolio include the products that the company offers to: 1) on-line merchant, 2) in-store merchant and 3) consumers.

‎

The Company writes off loans receivable when the customer balance becomes 90 days past due.

Accounts Receivable

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

Cash and cash equivalents, restricted cash and cash equivalents, short-term investments and credit cards receivable and other means of payment

Foreign Currency Translation

Foreign currency translation

Argentine currency status

‎


	September 30,	December 31,
	2020	2019
	(In thousands)
Assets	$ 1,213,172	$ 805,605
Liabilities	997,615	580,402
Net Assets	$ 215,557	$ 225,203

Derivative Financial Instruments

Treasury Stock

Income Taxes

Income taxes

The Company is currently assessing whether it will be eligible to benefit from the new law and related tax benefits, such eligibility remaining subject to Argentine government approval.

Fair Value Option Applied to Certain Financial Instruments

Fair value option applied to certain financial instruments

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss

The following table sets forth the Company’s accumulated other comprehensive loss as of September 30, 2020 and December 31, 2019:


	September 30,	December 31,
	2020	2019
	(In thousands)
Accumulated other comprehensive loss:
Foreign currency translation	$ (510,862)	$ (408,099)
Unrealized gains on investments	—	2,029
Unrealized gains (losses) on hedging activities	1,812	(250)
Estimated tax expense on unrealized gains	(461)	(351)
	$ (509,511)	$ (406,671)

The following tables summarize the changes in accumulated balances of other comprehensive loss for the nine-months ended September 30, 2020:



	Unrealized	Unrealized	Foreign	Estimated tax
	(Losses) Gains on	(Losses) Gains on	Currency	(expense)
	hedging activities, net	Investments	Translation	benefit	Total
		(In thousands)
Balances as of December 31, 2019	$ (250)	$ 2,029	$ (408,099)	$ (351)	$ (406,671)
Other comprehensive income (loss) before reclassifications	8,047	—	(102,763)	(2,497)	(97,213)
Amount of loss (gain) reclassified from accumulated other comprehensive loss	(5,985)	(2,029)	—	2,387	(5,627)
Net current period other comprehensive income (loss)	2,062	(2,029)	(102,763)	(110)	(102,840)
Ending balance	$ 1,812	$ —	$ (510,862)	$ (461)	$ (509,511)



	Amount of (Loss) Gain
	Reclassified from
Details about Accumulated	Accumulated Other
Other Comprehensive Loss	Comprehensive	Affected Line Item
Components	Loss	in the Statement of Income
	(In thousands)
Unrealized gains on investments	$ 2,029	Interest income and other financial gains
Unrealized gains on hedging activities	5,985	Cost of net revenues
Estimated tax expense on unrealized gains	(2,387)	Income tax expense
Total reclassifications for the period	$ 5,627	Total, net of income taxes

Use of Estimates

Use of estimates

Recently Adopted Accounting Standards & Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Standards

Recently issued accounting pronouncements not yet adopted

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Summary of Significant Accounting Policies [Abstract]

Assets, Liabilities and Net Assets of Company's Argentinean Subsidiaries


	September 30,	December 31,
	2020	2019
	(In thousands)
Assets	$ 1,213,172	$ 805,605
Liabilities	997,615	580,402
Net Assets	$ 215,557	$ 225,203

Accumulated Other Comprehensive Loss


	September 30,	December 31,
	2020	2019
	(In thousands)
Accumulated other comprehensive loss:
Foreign currency translation	$ (510,862)	$ (408,099)
Unrealized gains on investments	—	2,029
Unrealized gains (losses) on hedging activities	1,812	(250)
Estimated tax expense on unrealized gains	(461)	(351)
	$ (509,511)	$ (406,671)

Summary of Changes in Accumulated Balances of Other Comprehensive Loss



	Unrealized	Unrealized	Foreign	Estimated tax
	(Losses) Gains on	(Losses) Gains on	Currency	(expense)
	hedging activities, net	Investments	Translation	benefit	Total
		(In thousands)
Balances as of December 31, 2019	$ (250)	$ 2,029	$ (408,099)	$ (351)	$ (406,671)
Other comprehensive income (loss) before reclassifications	8,047	—	(102,763)	(2,497)	(97,213)
Amount of loss (gain) reclassified from accumulated other comprehensive loss	(5,985)	(2,029)	—	2,387	(5,627)
Net current period other comprehensive income (loss)	2,062	(2,029)	(102,763)	(110)	(102,840)
Ending balance	$ 1,812	$ —	$ (510,862)	$ (461)	$ (509,511)

Reclassifications Out of Accumulated Other Comprehensive Loss



	Amount of (Loss) Gain
	Reclassified from
Details about Accumulated	Accumulated Other
Other Comprehensive Loss	Comprehensive	Affected Line Item
Components	Loss	in the Statement of Income
	(In thousands)
Unrealized gains on investments	$ 2,029	Interest income and other financial gains
Unrealized gains on hedging activities	5,985	Cost of net revenues
Estimated tax expense on unrealized gains	(2,387)	Income tax expense
Total reclassifications for the period	$ 5,627	Total, net of income taxes

Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Net Income (Loss) Per Share [Abstract]

Net (Loss) Income Per Share of Common Stock


	Nine Months Ended September 30,				Three Months Ended September 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
	Basic	Diluted	Basic	Diluted	Basic	Diluted	Basic	Diluted
Net income (loss) per common share	$ 0.94	$ 0.94	$ (2.60)	$ (2.60)	$ 0.28	$ 0.28	$ (2.96)	$ (2.96)

Numerator:
Net income (loss)	$ 49,873	$ 49,873	$ (118,001)	$ (118,001)	$ 15,035	$ 15,035	$ (146,082)	$ (146,082)
Amortization of redeemable convertible preferred stock	—	—	(5,841)	(5,841)	—	—	—	—
Dividends on preferred stock	(2,928)	(2,928)	(2,000)	(2,000)	(928)	(928)	(1,000)	(1,000)
Net income corresponding to common stock	$ 46,945	$ 46,945	$ (125,842)	$ (125,842)	$ 14,107	$ 14,107	$ (147,082)	$ (147,082)

Denominator:
Weighted average of common stock outstanding for Basic earnings per share	49,713,621	—	48,350,165	—	49,720,854	—	49,710,723	—
Adjusted weighted average of common stock outstanding for Diluted earnings per share	—	49,713,621	—	48,350,165	—	49,720,854	—	49,710,723

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments (Tables)

9 Months Ended

Sep. 30, 2020

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments [Abstract]

Components Of Cash, Cash Equivalents, Restricted Cash And Cash Equivalents And Investments


	September 30,	December 31,
	2020	2019
	(In thousands)
Cash and cash equivalents	$ 1,139,703	$ 1,384,740
Restricted cash and cash equivalents
Securitization Transactions	$ 29,274	$ 37,424
Sovereign Debt Securities (Secured lines of credit guarantee)	—	29,260
Bank account (Argentine Central Bank regulation)	226,689	—
Bank collateral account (*)	224,995	—
Time Deposits	3,333	—
Cash in bank account	135	—
Total restricted cash and cash equivalents	$ 484,426	$ 66,684
Total cash, cash equivalents, restricted cash and cash equivalents (**)	$ 1,624,129	$ 1,451,424

Short-term investments
Time Deposits	$ 315,930	$ 189,660
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)	591,860	506,175
Sovereign Debt Securities (Secured lines of credit guarantee)	71,786	16,623
Sovereign Debt Securities	1,207,903	884,720
Corporate Debt Securities	—	63
Total short-term investments	$ 2,187,479	$ 1,597,241

Long-term investments
Sovereign Debt Securities	$ —	$ 260,320
Corporate Debt Securities	—	173
Other Investments	6,890	3,490
Total long-term investments	$ 6,890	$ 263,983

(*) Cash deposited and owned by the Company under the sole control and dominion of escrow agents as collateral of loans granted to a Brazilian subsidiary with due date in October 2020.

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

Loans Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2020

Loans Receivable, Net [Abstract]

Components Of Loan Receivable



		September 30,		December 31,
		2020		2019
	(In thousands)
On-line merchant	$	137,386	$	130,102
Consumer		117,540		60,179
In-store merchant		29,284		18,707
Loans receivable		284,210		208,988
Allowance for uncollectible accounts		(30,002)		(20,444)
Loans receivable, net	$	254,208	$	188,544

Current	$	239,135	$	182,105
Non-current		15,073		6,439
Loans receivable, net	$	254,208	$	188,544

Schedule Of Credit Quality Analysis Of Loans Receivables


		September 30,		December 31,
		2020		2019
	(In thousands)
1-30 days past due	$	18,734	$	20,430
31-60 days past due		5,275		6,916
61 -90 days past due		4,937		7,580
Total past due		28,946		34,926
To become due		255,264		174,062
Total	$	284,210	$	208,988

Summary Of Allowance For Uncollectible Accounts Activity



	September 30,
		2020		2019 (1)
	(In thousands)
Balance at beginning of year	$	20,444	$	6,636
Adoption of ASC 326 (2)		4,977		-
Charged/credited to Net income (loss)		49,033		48,892
Charges/Utilized /Currency translation adjustments/Write-offs		(44,452)		(10,934)
Balance at end of period	$	30,002	$	44,594


(1)	The comparative information has not been restated and continues to be reported under the accounting standard in effect during 2019.
(2)	Cumulative pre-tax adjustments recorded to retained earnings as of January 1, 2020.

Business Combinations, Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations, Goodwill and Intangible Assets [Abstract]

Composition of Goodwill and Intangible Assets


	September 30,	December 31,
	2020	2019
	(In thousands)
Goodwill	$ 79,064	$ 87,609
Intangible assets with indefinite lives
- Trademarks	7,253	8,366
Amortizable intangible assets
- Licenses and others	4,715	5,320
- Non-compete agreement	3,276	2,703
- Customer list	12,909	13,900
- Trademarks	7,187	4,723
Total intangible assets	$ 35,340	$ 35,012
Accumulated amortization	(21,110)	(20,737)
Total intangible assets, net	$ 14,230	$ 14,275

Changes in Carrying Amount of Goodwill


	Nine Months Ended September 30, 2020
	Brazil	Argentina	Mexico	Chile	Colombia	Other Countries	Total
	(In thousands)
Balance, beginning of the period	$ 29,072	$ 6,991	$ 32,196	$ 14,872	$ 3,312	$ 1,166	$ 87,609
Business Acquisitions	—	3,603	1,062	1,241	1,246	748	7,900
Disposals	(3,480)	—	—	—	—	—	(3,480)
Effect of exchange rates changes	(7,048)	—	(4,495)	(705)	(613)	(104)	(12,965)
Balance, end of the period	$ 18,544	$ 10,594	$ 28,763	$ 15,408	$ 3,945	$ 1,810	$ 79,064


	Year Ended December 31, 2019
	Brazil	Argentina	Mexico	Chile	Colombia	Other Countries	Total
	(In thousands)
Balance, beginning of the year	$ 30,069	$ 6,946	$ 31,340	$ 16,014	$ 3,339	$ 1,175	$ 88,883
Purchase price allocations adjustments	—	45	—	—	—	—	45
Effect of exchange rates changes	(997)	—	856	(1,142)	(27)	(9)	(1,319)
Balance, end of the year	$ 29,072	$ 6,991	$ 32,196	$ 14,872	$ 3,312	$ 1,166	$ 87,609

Expected Intangible Asset Amortization Expense


For year ended 12/31/2020		$ 1,085
For year ended 12/31/2021		3,449
For year ended 12/31/2022		1,295
For year ended 12/31/2023		899
Thereafter		249
		$ 6,977

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Financial Performance of Company's Reporting Segments


	Nine Months Ended September 30, 2020
	Brazil	Argentina	Mexico	Other Countries	Total
	(In thousands)
Net revenues	$ 1,473,466	$ 656,825	$ 371,085	$ 144,785	$ 2,646,161
Direct costs	(1,148,926)	(465,806)	(370,229)	(115,759)	(2,100,720)
Direct contribution	324,540	191,019	856	29,026	545,441

Operating expenses and indirect costs of net revenues					(392,623)
Income from operations					152,818

Other income (expenses):
Interest income and other financial gains					80,119
Interest expense and other financial losses					(75,083)
Foreign currency losses					(32,524)
Net income before income tax expense					$ 125,330

‎



	Nine Months Ended September 30, 2019
	Brazil	Argentina	Mexico	Other Countries	Total
	(In thousands)
Net revenues	$ 1,033,183	$ 323,892	$ 190,308	$ 74,660	$ 1,622,043
Direct costs	(871,964)	(239,943)	(254,318)	(70,733)	(1,436,958)
Direct contribution	161,219	83,949	(64,010)	3,927	185,085

Operating expenses and indirect costs of net revenues					(269,359)
Loss from operations					(84,274)

Other income (expenses):
Interest income and other financial gains					86,590
Interest expense and other financial losses					(44,689)
Foreign currency losses					(1,899)
Net loss before income tax expense					$ (44,272)


		Three Months Ended September 30, 2020
		Brazil	Argentina	Mexico	Other Countries	Total
		(In thousands)
Net revenues		$ 610,721	$ 284,746	$ 150,382	$ 69,852	$ 1,115,701
Direct costs		(501,544)	(193,373)	(144,914)	(53,212)	(893,043)
Direct contribution		109,177	91,373	5,468	16,640	222,658

Operating expenses and indirect costs of net revenues						(139,584)
Income from operations						83,074

Other income (expenses):
	Interest income and other financial gains					24,553
	Interest expense and other financial losses					(24,522)
	Foreign currency losses					(30,435)
Net income before income tax expense						$ 52,670


		Three Months Ended September 30, 2019
		Brazil	Argentina	Mexico	Other Countries	Total
		(In thousands)
Net revenues		$ 389,941	$ 116,203	$ 71,364	$ 25,523	$ 603,031
Direct costs		(370,704)	(88,542)	(103,517)	(25,845)	(588,608)
Direct contribution		19,237	27,661	(32,153)	(322)	14,423

Operating expenses and indirect costs of net revenues						(96,348)
Loss from operations						(81,925)

Other income (expenses):
	Interest income and other financial gains					28,462
	Interest expense and other financial losses					(14,451)
	Foreign currency gains					987
Net loss before income tax expense						$ (66,927)

Allocation of Long-Lived Tangible Assets Based on Geography


	September 30,	December 31,
	2020	2019
	(In thousands)
US property and equipment, net	$ 1,395	$ 937
Other countries
Argentina	115,700	100,536
Brazil	121,724	103,571
Mexico	46,488	30,131
Other countries	17,182	9,082
	$ 301,094	$ 243,320
Total property and equipment, net	$ 302,489	$ 244,257

Allocation of Goodwill and Intangible Assets Based on Geography


	September 30,	December 31,
	2020	2019
	(In thousands)
Other countries goodwill and intangible assets
Argentina	$ 13,223	$ 8,632
Brazil	18,793	30,142
Mexico	32,180	36,003
Chile	22,685	22,237
Other countries	6,413	4,870
Total goodwill and intangible assets	$ 93,294	$ 101,884

Consolidated Net Revenues by Similar Products and Services


	Nine Months Ended September 30,		Three months Ended September 30,

Consolidated Net Revenues	2020	2019	2020	2019
	(In thousands)		(In thousands)
Commerce (*)	$ 1,686,879	$ 957,029	$ 724,466	$ 346,208
Fintech	959,282	665,014	391,235	256,823
Total	$ 2,646,161	$ 1,622,043	$ 1,115,701	$ 603,031

(*) Includes marketplace fees, shipping fees, ad sales, classified fees and other ancillary services.

Fair Value Measurement of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Measurement of Assets and Liabilities [Abstract]

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis


		Quoted Prices in				Quoted Prices in
	Balances as of	active markets for	Significant other	Unobservable	Balances as of	active markets for	Significant other	Unobservable
	September 30,	identical Assets	observable inputs	inputs	December 31,	identical Assets	observable inputs	inputs
Description	2020	(Level 1)	(Level 2)	(Level 3)	2019	(Level 1)	(Level 2)	(Level 3)
	(In thousands)
Assets
Cash and Cash Equivalents:
Money Market Funds	$ 322,829	$ 322,829	$ —	$ —	$ 688,760	$ 688,760	$ —	$ —
Sovereign Debt Securities	—	—	—	—	32,874	32,874	—	—
Restricted Cash and cash equivalents:
Money Market Funds	13,559	13,559	—	—	32,829	32,829	—	—
Sovereign Debt Securities	—	—	—	—	29,260	29,260	—	—
Investments:
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)	591,860	591,860	—	—	506,175	506,175	—	—
Sovereign Debt Securities	1,279,689	1,279,689	—	—	1,161,663	1,161,663	—	—
Corporate Debt Securities	—	—	—	—	236	178	58	—
Other Assets:
Derivative Instruments	11,858	—	—	11,858	1,249	—	—	1,249
Total Financial Assets	$ 2,219,795	$ 2,207,937	$ —	$ 11,858	$ 2,453,046	$ 2,451,739	$ 58	$ 1,249
Liabilities:
Contingent considerations	$ 4,555	$ —	$ —	$ 4,555	$ 2,201	$ —	$ —	$ 2,201
Long-term retention plan	86,608	—	86,608	—	60,958	—	60,958	—
Derivative Instruments	1,642	—	—	1,642	251	—	—	251
Total Financial Liabilities	$ 92,805	$ —	$ 86,608	$ 6,197	$ 63,410	$ —	$ 60,958	$ 2,452

Fair Value of Financial Assets and Liabilities Measured at Amortized Cost



	Balances as of	Significant other	Balances as of	Significant other
	September 30,	observable inputs	December 31,	observable inputs
	2020	(Level 2)	2019	(Level 2)
	(In thousands)
Assets
Time Deposits	$ 315,930	$ 315,930	$ 189,660	$ 189,660
Accounts receivable, net	40,891	40,891	35,446	35,446
Credit Cards receivable and other means of payment, net	660,402	660,402	379,969	379,969
Loans receivable, net	254,208	254,208	188,544	188,544
Other assets	137,581	137,581	149,218	149,218
Total Assets	$ 1,409,012	$ 1,409,012	$ 942,837	$ 942,837
Liabilities
Accounts payable and accrued expenses	$ 509,095	$ 509,095	$ 372,309	$ 372,309
Funds payable to customers	1,421,825	1,421,825	894,057	894,057
Salaries and social security payable	99,719	99,719	67,686	67,686
Taxes payable	212,729	212,729	60,247	60,247
Loans payable and other financial liabilities (*)	1,236,501	1,320,251	817,491	927,903
Other liabilities	68,740	68,740	124,644	124,644
Total Liabilities	$ 3,548,609	$ 3,632,359	$ 2,336,434	$ 2,446,846

(*) The fair value of the 2028 Notes (including the equity component) is disclosed in Note 11.

Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities



	September 30, 2020
	Cost	Financial Gains	Financial Losses	Estimated Fair Value

	(In thousands)
Cash and cash equivalents
Money Market Funds	$ 322,829	$ —	$ —	$ 322,829
Total Cash and cash equivalents	$ 322,829	$ —	$ —	$ 322,829

Restricted cash and cash equivalents
Money Market Funds	$ 13,559	$ —	$ —	$ 13,559
Total Restricted cash and cash equivalents	$ 13,559	$ —	$ —	$ 13,559

Short-term investments
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee) (1)	$ 587,983	$ 3,877	$ —	$ 591,860
Sovereign Debt Securities (1)	1,274,654	5,089	(54)	1,279,689
Total Short-term investments	$ 1,862,637	$ 8,966	$ (54)	$ 1,871,549

Total	$ 2,199,025	$ 8,966	$ (54)	$ 2,207,937

‎


	December 31, 2019
	Cost	Gross Unrealized Gains⁽¹⁾	Financial Gains	Financial Losses	Estimated Fair Value

	(In thousands)
Cash and cash equivalents
Money Market Funds	$ 688,760	$ —	$ —	$ —	$ 688,760
Sovereign Debt Securities	32,851	—	23	—	32,874
Total Cash and cash equivalents	$ 721,611	$ —	$ 23	$ —	$ 721,634

Restricted Cash and cash equivalents
Money Market Funds	$ 32,829	$ —	$ —	$ —	$ 32,829
Sovereign Debt Securities (2)	29,227	—	33	—	29,260
Total Restricted Cash and cash equivalents	$ 62,056	$ —	$ 33	$ —	$ 62,089

Short-term investments
Sovereign Debt Securities (Central Bank of Brazil mandatory guarantee)(3)	$ 504,195	$ —	$ 1,980	$ —	$ 506,175
Sovereign Debt Securities (4)	898,922	2,080	400	(59)	901,343
Corporate Debt Securities	63	—	—	—	63
Total Short-term investments	$ 1,403,180	$ 2,080	$ 2,380	$ (59)	$ 1,407,581

Long-term investments
Sovereign Debt Securities (5)	$ 260,400	$ 2	$ 1	$ (83)	$ 260,320
Corporate Debt Securities	170	3	—	—	173
Total Long-term investments	$ 260,570	$ 5	$ 1	$ (83)	$ 260,493

Total	$ 2,447,417	$ 2,085	$ 2,437	$ (142)	$ 2,451,797

(2)Held by the Company’s Argentine subsidiary in guarantee for secured lines of credit. (See Note 11 – Loans payable and other financial liabilities.)

Estimated Fair Values of Cash Equivalents, Short-Term and Long-Term Investments, Effective Maturities


One year or less		2,207,937
Total		$ 2,207,937

Long Term Retention Program (Tables)

9 Months Ended

Sep. 30, 2020

Long Term Retention Program [Abstract]

Long Term Retention Plans Accrued Compensation Expense


		Nine Months Ended September 30,				Three Months Ended September 30,
		2020		2019	2020		2019
		(In thousands)			(In thousands)
LTRP 2011		—		26		—		—
LTRP 2012		69		1,827		—		411
LTRP 2013		—		97		—		—
LTRP 2014		125		3,726		—		903
LTRP 2015		6,338		6,410		1,453		1,548
LTRP 2016		13,010		10,063		2,955		2,456
LTRP 2017		13,892		9,530		3,332		2,554
LTRP 2018		6,941		4,708		1,578		1,385
LTRP 2019		16,061		11,926		5,741		6,848
LTRP 2020		18,706		—		8,176		—
Total LTRP	$	75,142	$	48,313	$	23,235	$	16,105

Loans Payable And Other Financial Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Loans Payable And Other Financial Liabilities [Abstract]

Summary Of Loans Payable And Other Financial Liabilities


							Book value as of

Type of instrument	Currency	Interest	Weighted Average Interest ‎Rate		Maturity		September 30, 2020		December 31, 2019
							(In thousands)
Current loans payable and other financial liabilities:
Loans from banks
Chilean Subsidiary	Chilean Pesos	Fixed	1.68	%	October 2020	$	64,727	$	38,780
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.35	%	March 2021		63,902		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.90	%	October 2020		5,471		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 3.25	%	May 2021		39,915		-
Brazilian Subsidiary	Brazilian Reais	Variable	CDI + 2.9	%	December 2020		9,004		-
Mexican Subsidiary	Mexican Peso	Variable	TIIE + 2.55	%	October 2020		16,555		-
Argentine Subsidiary	Argentine Pesos	Fixed	32.50	%	November 2020		13,326		-
Uruguayan Subsidiary	Uruguayan Pesos	Fixed	7.51	%	March 2021		8,224		-

Secured lines of credit
Argentine Subsidiary	Argentine Pesos	-	-	%	-		-		49,499
Brazilian Subsidiary (*)	Brazilian Reais	Variable	CDI + 1.00	%	October 2020		100,692		-
Brazilian Subsidiary (*)	Brazilian Reais	Variable	CDI + 1.50	%	October 2020		97,140		-
Brazilian Subsidiary (**)	Brazilian Reais	Variable	CDI + 0.55	%	July 2021		53,516		-

Unsecured lines of credit
Uruguayan Subsidiary	Uruguayan Pesos	Fixed	8.21	%	October 2020		17,870		16,435
Argentine Subsidiary	Argentine Pesos	Fixed	24.06	%	October 2020		69,020		9,645
Chilean Subsidiary	Chilean Pesos	-	-	%	-		-		1,951

Convertible notes							2,249		6,649
Finance lease obligations							2,168		2,008
Credit card collateralized debt							10,679		17,309
Collateralized debt							43,589		43,862
Other lines of credit							117		-
						$	618,164	$	186,138

Non Current loans payable and other financial liabilities:
Convertible notes							588,993		569,305
Finance lease obligations							5,538		7,368
Collateralized debt							23,806		54,680
						$	618,337	$	631,353

(*)	Under the terms of the loans agreements, the Company transferred cash to deposit accounts owned by the Company but under the sole control and dominion of escrow agents as collaterals. These collaterals are shown in Restricted cash and cash equivalents of the consolidated balance sheet.
(**)	Under the terms of the loan agreement, the Company transferred U.S. treasury notes to an account owned by the Company but under the sole control and dominion of the escrow agent as collateral. This collateral is shown in Short-term investments of the consolidated balance sheet.

Carrying Amounts of Liability and Equity Components


	September 30, 2020		December 31, 2019
	(In thousands)
Amount of the equity component (1)	$	327,305	$	327,305

2.00% Convertible Senior Notes due 2028	$	879,998	$	880,000
Unamortized debt discount (2)		(281,958)		(301,227)
Unamortized transaction costs related to the debt component		(9,047)		(9,468)
Contractual coupon interest accrual		37,009		23,809
Contractual coupon interest payment		(34,760)		(17,160)
Net carrying amount	$	591,242	$	575,954

(1)Net of $6,163 thousands of transaction costs related to the equity component of the 2028 Notes.

(2)As of September 30, 2020, the remaining period over which the unamortized debt discount will be amortized is 8.0 years.

Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount


	Nine month periods ended September 30,				Three month periods ended September 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
Contractual coupon interest expense	$	13,200	$	13,542	$	4,400	$	4,400
Amortization of debt discount		19,269		18,366		6,542		6,081
Amortization of debt issuance costs		421		362		146		123
Total interest expense related to the 2028 Notes	$	32,890	$	32,270	$	11,088	$	10,604

Securitization Transactions (Tables)

9 Months Ended

Sep. 30, 2020

Securitization Transactions [Abstract]

Assets And Liabilities Of The Trust



	September 30,		December 31,
	2020		2019
Assets	(In thousands)
Current assets:
Restricted cash and cash equivalents	$	29,274	$	37,424
Loans receivable, net		67,986		104,419
Total current assets		97,260		141,843
Non-current assets:
Loans receivable, net		4,786		4,395
Total non-current assets		4,786		4,395
Total assets	$	102,046	$	146,238
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	67	$	128
Loans payable and other financial liabilities		43,589		43,862
Total current liabilities		43,656		43,990
Non-current liabilities:
Loans payable and other financial liabilities		23,806		54,680
Total non-current liabilities		23,806		54,680
Total liabilities	$	67,462	$	98,670

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Supplemental Balance Sheet Information Related To Leases


		September 30,		December 31,
		2020		2019
Operating Leases	(In thousands)
Operating lease right-of-use assets	$	225,345	$	200,449

Operating lease liabilities	$	228,718	$	199,932

Finance Leases
Property and equipment, at cost		12,357		10,952
Accumulated depreciation		(3,247)		(1,563)
Property and equipment, net	$	9,110	$	9,389

Loans payable and other financial liabilities	$	7,706	$	9,376

Summary Of Weighted Average Remaining Lease Term And Discount Rate


Weighted average remaining lease term
Operating leases	8	Years
Finance leases	3	Years


Weighted average discount rate (*)
Operating leases	10	%
Finance leases	17	%

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

Components Of Lease Expense


		Nine months ended September 30,
		2020		2019
	(In thousands)
Operating lease cost	$	29,941	$	21,503

Finance lease cost:
Depreciation of property and equipment		1,564		1,024
Interest on lease liabilities		1,199		1,110
Total finance lease cost	$	2,763	$	2,134

Supplemental Cash Flow Information Related To Leases


	Nine months ended September 30,
		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	(In thousands)
Operating cash flows from operating leases	$	28,705	$	17,315
Financing cash flows from finance leases		2,499		1,416


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	73,340	$	69,154
Finance leases		1,487		4,379

Maturities Of Lease Liabilities


Period Ending September 30, 2020		Operating Leases		Finance Leases
	(In thousands)
One year or less	$	45,405	$	3,296
One year to two years		43,580		3,296
Two years to three years		40,915		3,110
Three years to four years		39,373		1,259
Four years to five years		35,551		—
Thereafter		113,885		—
Total lease payments	$	318,709	$	10,961
Less imputed interest		(89,991)		(3,255)
Total	$	228,718	$	7,706

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments [Abstract]

Summary Of Outstanding Derivative Instruments


			September 30,		December 31,
	Balance sheet location		2020		2019
		(In thousands)
Derivatives
Foreign exchange contracts not designated as hedging instruments	Other current assets	$	10,594	$	1,249
Foreign exchange contracts designated as cash flow hedges	Other current assets		1,264		—
Foreign exchange contracts not designated as hedging instruments	Other current liabilities		1,642		—
Foreign exchange contracts designated as cash flow hedges	Other current liabilities		—		251

Effect Of Derivative Contracts

Amount of

Amount of gain reclassified

December 31,

Gain (Loss) recognized

from accumulated

September 30,

2019

in other comprehensive loss

other comprehensive loss (income)

2020

(In thousands)

Foreign exchange contracts designated as cash flow hedges

$ (250)

$ 8,047

$ (5,985)

$ 1,812

Fair Value Of Derivative Instruments


		Nine month periods ended September 30,				Three month periods ended September 30,
	2020		2019		2020		2019
		(In thousands)				(In thousands)
Foreign exchange contracts not designated as hedging instruments	$	26,535	$	3,308	$	4,709	$	3,239
Loss from foreign exchange contracts designated as fair value hedges		—		442		—		1,472
Gain from hedged items attributable to hedged risks		—		(442)		—		(1,472)

Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Significant Accounting Policies [Line Items]
Long-lived assets, intangible assets and goodwill located in the foreign operations	$ 394,388		$ 394,388				$ 345,204
Allowance for doubtful accounts, loan receivables and chargebacks	86,076		86,076				38,079
Deferred Revenue	27,573		27,573				16,590			$ 5,918
Deferred Revenue, Revenue Recognized			$ 11,229	$ 4,954
Percentage on relief of total income tax			60.00%
Percentage on relief of payroll tax			70.00%
Income tax expense (benefit)	37,635	$ 79,155	$ 75,457	73,729
Recognized gains in interest income and other financial gains			8,912	3,157
Stockholders' Equity Attributable to Parent	1,746,099	$ 2,038,174	1,746,099	$ 2,038,174	$ 1,808,249	$ 1,866,567	1,983,120	$ 2,145,769	$ 2,214,058	$ 336,700
Aggregate per share effect of the Argentine tax holiday		$ 0.24		$ 0.33
Loans receivable	284,210		284,210				208,988
Allowance for doubtful accounts, loan receivables and chargebacks	30,002		$ 30,002				20,444
Argentina [Member]
Significant Accounting Policies [Line Items]
Gap between official exchange rate and implicit exchange rate			91.20%
New Software Development Law [Member]
Significant Accounting Policies [Line Items]
Income tax expense (benefit)		$ (11,842)		$ (15,935)
Software development law audit fees		958		1,569
Labor cost benefit		$ 1,836		$ 6,473
Mexico Segment [Member]
Significant Accounting Policies [Line Items]
Valuation allowance in certain subsidiaries	7,529		$ 24,840
Cumulative Effect Period Of Adoption Adjustment [Member]
Significant Accounting Policies [Line Items]
Stockholders' Equity Attributable to Parent							$ (4,570)
Credit Cards Receivable And Other Means Of Payment [Member]
Significant Accounting Policies [Line Items]
Allowance for doubtful accounts, loan receivables and chargebacks	$ 27,006		$ 27,006

Summary of Significant Accounting Policies (Assets, Liabilities and Net Assets of Company's Argentinean Subsidiaries) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Subsidiary or Equity Method Investee [Line Items]
Assets	$ 5,737,719	$ 4,781,691
Liabilities	3,942,193	2,699,728
Argentinean Subsidiaries [Member]
Subsidiary or Equity Method Investee [Line Items]
Assets	1,213,172	805,605
Liabilities	997,615	580,402
Net Assets	$ 215,557	$ 225,203

Summary of Significant Accounting Policies (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies [Abstract]
Foreign currency translation	$ (510,862)	$ (408,099)
Unrealized gains on investments		2,029
Unrealized gains (losses) on hedging activities	1,812	(250)
Estimated tax expense on unrealized gains	(461)	(351)
Accumulated other comprehensive loss	$ (509,511)	$ (406,671)

Summary of Significant Accounting Policies (Summary of Changes in Accumulated Balances of Other Comprehensive Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	$ 1,808,249	$ 2,145,769	$ 1,983,120	$ 336,700
Net change in accumulated other comprehensive (loss) income, net of income tax	(4,150)	(25,990)	(102,840)	(22,862)
Ending Balance	1,746,099	2,038,174	1,746,099	2,038,174
Unrealized (Losses) Gains on Hedging Activities, Net [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning balance, before tax			(250)
Other comprehensive (loss) income before reclassifications, before tax			8,047
Amount of loss (gain) reclassified from accumulated other comprehensive loss, before tax			(5,985)
Net current period other comprehensive income (loss), before tax			2,062
Ending balance, before tax	1,812		1,812
Unrealized (Losses) Gains on Investments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning balance, before tax			2,029
Amount of loss (gain) reclassified from accumulated other comprehensive loss, before tax			(2,029)
Net current period other comprehensive income (loss), before tax			(2,029)
Ending balance, before tax
Foreign Currency Translation [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning balance, before tax			(408,099)
Other comprehensive (loss) income before reclassifications, before tax			(102,763)
Net current period other comprehensive income (loss), before tax			(102,763)
Ending balance, before tax	(510,862)		(510,862)
Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning balance, Estimated tax (expense) benefit			(351)
Other comprehensive income before reclassifications adjustments for (losses) gains on available for sale investments, Estimated tax (expense) benefit			(2,497)
Amount of loss (gain) reclassified from accumulated other comprehensive loss, Estimated tax (expense) benefit			2,387
Net current period other comprehensive income (loss), Estimated tax (expense) benefit			(110)
Ending balance, Estimated tax (expense) benefit	(461)		(461)
Beginning Balance	(505,361)	(388,449)	(406,671)	(391,577)
Other comprehensive (loss) income before reclassifications, net tax			(97,213)
Amount of loss (gain) reclassified from accumulated other comprehensive income, net of tax			(5,627)
Net change in accumulated other comprehensive (loss) income, net of income tax			(102,840)
Ending Balance	$ (509,511)	$ (414,439)	$ (509,511)	$ (414,439)

Summary of Significant Accounting Policies (Reclassifications Out of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income and other financial gains	$ 24,553			$ 28,462			$ 80,119	$ 86,590
Cost of net revenues	635,511			318,689			1,425,985	828,267
Income tax loss	(37,635)			(79,155)			(75,457)	(73,729)
Net income (loss)	$ 15,035	$ 55,947	$ (21,109)	$ (146,082)	$ 16,217	$ 11,864	49,873	$ (118,001)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax loss							(2,387)
Net income (loss)							5,627
Reclassification out of Accumulated Other Comprehensive Income [Member] \| Unrealized (Losses) Gains on Investments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income and other financial gains							2,029
Reclassification out of Accumulated Other Comprehensive Income [Member] \| Unrealized (Losses) Gains on Hedging Activities, Net [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of net revenues							$ 5,985

Net Income (Loss) Per Share (Narrative) (Details) - Convertible Senior Notes [Member] - USD ($)	Sep. 30, 2020	Dec. 31, 2019	Aug. 31, 2018	Aug. 24, 2018	Jun. 30, 2014
2019 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Convertible senior notes, issued					$ 330,000,000
Convertible senior notes, interest rate					2.25%
2028 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Convertible senior notes, issued	$ 879,998,000	$ 880,000,000	$ 880,000,000	$ 880,000,000
Convertible senior notes, interest rate	2.00%	2.00%	2.00%	2.00%

Net Income (Loss) Per Share (Net (Loss) Income Per Share of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Net income attributable to MercadoLibre, Inc. per common share
Net income (loss) per common share, Basic	$ 0.28			$ (2.96)			$ 0.94	$ (2.60)
Net income (loss) per common share, Diluted	$ 0.28			$ (2.96)			$ 0.94	$ (2.60)
Numerator:
Net income (loss)	$ 15,035	$ 55,947	$ (21,109)	$ (146,082)	$ 16,217	$ 11,864	$ 49,873	$ (118,001)
Amortization of redeemable convertible preferred stock								(5,841)
Dividends on preferred stock	(928)	$ (1,000)	$ (1,000)	(1,000)	$ (1,000)		(2,928)	(2,000)
Net income corresponding to common stock, Basic	14,107			(147,082)			46,945	(125,842)
Net income corresponding to common stock, Diluted	$ 14,107			$ (147,082)			$ 46,945	$ (125,842)
Denominator:
Weighted average of common stock outstanding for Basic earnings per share	49,720,854			49,710,723			49,713,621	48,350,165
Adjusted weighted average of common stock outstanding for Diluted earnings per share	49,720,854			49,710,723			49,713,621	48,350,165

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash and Cash Equivalents, Current	$ 484,426	$ 66,684
Short-term Investments	2,187,479	$ 1,597,241
Bank Account (Argentine Central Bank Regulation) [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash and Cash Equivalents, Current	$ 226,689
Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Percent of electronic funds	100.00%	100.00%
Short-term Investments	$ 591,860	$ 506,175

Cash, Cash Equivalents, Restricted Cash And Cash Equivalent And Investments (Components Of Cash, Cash Equivalents, Restricted Cash And Cash Equivalents And Investments) (Details) - USD ($)
$ in Thousands

Sep. 30, 2020

Dec. 31, 2019

Sep. 30, 2019

Dec. 31, 2018

Restricted Cash and Cash Equivalents Items [Line Items]

Cash and cash equivalents

$ 1,139,703

$ 1,384,740

Restricted cash and cash equivalents

484,426

66,684

Total cash, cash equivalents, restricted cash and cash equivalents

1,624,129

^[1]

1,451,424

^[1]

$ 1,456,965

$ 464,695

Short-term Investments

2,187,479

1,597,241

Long-term Investments

6,890

263,983

Time Deposits [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Short-term Investments

315,930

189,660

Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Short-term Investments

591,860

506,175

Sovereign Debt Securities (Secured Lines Of Credit Guarantee) [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Short-term Investments

71,786

16,623

Sovereign Debt Securities [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Short-term Investments

1,207,903

884,720

Long-term Investments

260,320

Corporate Debt Securities [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Short-term Investments

Long-term Investments

173

Other Investments [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Long-term Investments

6,890

3,490

Securitization Transactions [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted cash and cash equivalents

29,274

37,424

Sovereign Debt Securities (Secured Lines Of Credit Guarantee) [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted cash and cash equivalents

$ 29,260

Bank Account (Argentine Central Bank Regulation) [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted cash and cash equivalents

226,689

Bank Collateral Account [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted cash and cash equivalents

^[2]

224,995

Time Deposits [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted cash and cash equivalents

3,333

Cash In Bank Account [Member]

Restricted Cash and Cash Equivalents Items [Line Items]

Restricted cash and cash equivalents

$ 135

[1]	Cash, cash equivalents, restricted cash and cash equivalents as reported in the consolidated statements of cash flow.
[2]	Cash deposited and owned by the Company under the sole control and dominion of escrow agents as collateral of loans granted to a Brazilian subsidiary with due date in October 2020.

Loans Receivable, Net (Components Of Loan Receivable) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	$ 284,210	$ 208,988
Allowance for uncollectible accounts	(30,002)	(20,444)
Loans receivables, net	254,208	188,544
Current	239,135	182,105
Non-current	15,073	6,439
On-line Merchant [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	137,386	130,102
Consumer [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	117,540	60,179
In-Store Merchant [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable	$ 29,284	$ 18,707

Loans Receivable, Net (Schedule Of Credit Quality Analysis Of Loans Receivables) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Total past due	$ 28,946	$ 34,926
To become due	255,264	174,062
Total	284,210	208,988
1-30 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Total past due	18,734	20,430
31-60 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Total past due	5,275	6,916
61-90 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Total past due	$ 4,937	$ 7,580

Loans Receivable, Net (Summary Of Allowance For Uncollectible Accounts Activity) (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

^[1]

Loans Receivable, Net [Abstract]

Balance at beginning of year

$ 20,444

$ 6,636

Adoption of ASC 326

^[2]

4,977

Charged/credit to Net income (loss)

49,033

48,892

Charges/Utilized/Currency translation adjustments/Write-offs

(44,452)

(10,934)

Balance at end of period

$ 30,002

$ 44,594

[1]	The comparative information has not been restated and continues to be reported under the accounting standard in effect during 2019.
[2]	Cumulative pre-tax adjustments recorded to retained earnings as of January 1, 2020

Business Combinations, Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Business Acquisition [Line Items]
Aggregate amortization expense for intangible assets		$ 1,476	$ 896	$ 3,995	$ 3,045
Kiserty S.A. [Member]
Business Acquisition [Line Items]
Percentage of acquisition	100.00%
Aggregate purchase price for acquisition	$ 10,899
Business acquisition, cash paid	8,500
Amount in escrow account	225
Fair value of contingent consideration	$ 2,174
Net revenues				$ 1,054

Business Combinations, Goodwill and Intangible Assets (Composition of Goodwill and Intangible Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Dec. 31, 2018
Indefinite-lived Intangible Assets [Line Items]
Goodwill	$ 79,064	$ 87,609	$ 88,883
Total intangible assets	35,340	35,012
Accumulated amortization	(21,110)	(20,737)
Total intangible assets, net	14,230	14,275
Licenses and Others [Member]
Indefinite-lived Intangible Assets [Line Items]
Amortizable intangible assets	4,715	5,320
Non-Compete Agreement[Member]
Indefinite-lived Intangible Assets [Line Items]
Amortizable intangible assets	3,276	2,703
Customer List [Member]
Indefinite-lived Intangible Assets [Line Items]
Amortizable intangible assets	12,909	13,900
Trademarks [Member]
Indefinite-lived Intangible Assets [Line Items]
Amortizable intangible assets	7,187	4,723
Trademarks [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets with indefinite lives	$ 7,253	$ 8,366

Business Combinations, Goodwill and Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Goodwill [Line Items]
Balance, beginning of the period	$ 87,609	$ 88,883
Business acquisitions	7,900
Disposals	(3,480)
Purchase price allocations adjustments		45
Effect of exchange rates changes	(12,965)	(1,319)
Balance, end of the period	79,064	87,609
Brazil [Member]
Goodwill [Line Items]
Balance, beginning of the period	29,072	30,069
Disposals	(3,480)
Effect of exchange rates changes	(7,048)	(997)
Balance, end of the period	18,544	29,072
Argentina [Member]
Goodwill [Line Items]
Balance, beginning of the period	6,991	6,946
Business acquisitions	3,603
Purchase price allocations adjustments		45
Balance, end of the period	10,594	6,991
Mexico [Member]
Goodwill [Line Items]
Balance, beginning of the period	32,196	31,340
Business acquisitions	1,062
Effect of exchange rates changes	(4,495)	856
Balance, end of the period	28,763	32,196
Chile [Member]
Goodwill [Line Items]
Balance, beginning of the period	14,872	16,014
Business acquisitions	1,241
Effect of exchange rates changes	(705)	(1,142)
Balance, end of the period	15,408	14,872
Colombia [Member]
Goodwill [Line Items]
Balance, beginning of the period	3,312	3,339
Business acquisitions	1,246
Effect of exchange rates changes	(613)	(27)
Balance, end of the period	3,945	3,312
Other Countries [Member]
Goodwill [Line Items]
Balance, beginning of the period	1,166	1,175
Business acquisitions	748
Effect of exchange rates changes	(104)	(9)
Balance, end of the period	$ 1,810	$ 1,166

Business Combinations, Goodwill and Intangible Assets (Expected Intangible Asset Amortization Expense) (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Business Combinations, Goodwill and Intangible Assets [Abstract]
For year ended 12/31/2020	$ 1,085
For year ended 12/31/2021	3,449
For year ended 12/31/2022	1,295
For year ended 12/31/2023	899
Thereafter	249
Total remaining amortization of intangible assets	$ 6,977

Segment Reporting (Financial Performance of Company's Reporting Segments) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Net revenues	$ 1,115,701	$ 603,031	$ 2,646,161	$ 1,622,043
Direct costs	(893,043)	(588,608)	(2,100,720)	(1,436,958)
Direct contribution	222,658	14,423	545,441	185,085
Operating expenses and indirect costs of net revenues	(139,584)	(96,348)	(392,623)	(269,359)
Income (loss) from operations	83,074	(81,925)	152,818	(84,274)
Other income (expenses):
Interest income and other financial gains	24,553	28,462	80,119	86,590
Interest expense and other financial losses	(24,522)	(14,451)	(75,083)	(44,689)
Foreign currency (losses) gains	(30,435)	987	(32,524)	(1,899)
Net income (loss) before income tax expense	52,670	(66,927)	125,330	(44,272)
Operating Segments [Member] \| Brazil Segment [Member]
Segment Reporting Information [Line Items]
Net revenues	610,721	389,941	1,473,466	1,033,183
Direct costs	(501,544)	(370,704)	(1,148,926)	(871,964)
Direct contribution	109,177	19,237	324,540	161,219
Operating Segments [Member] \| Argentina Segment [Member]
Segment Reporting Information [Line Items]
Net revenues	284,746	116,203	656,825	323,892
Direct costs	(193,373)	(88,542)	(465,806)	(239,943)
Direct contribution	91,373	27,661	191,019	83,949
Operating Segments [Member] \| Mexico Segment [Member]
Segment Reporting Information [Line Items]
Net revenues	150,382	71,364	371,085	190,308
Direct costs	(144,914)	(103,517)	(370,229)	(254,318)
Direct contribution	5,468	(32,153)	856	(64,010)
Operating Segments [Member] \| Other Countries Segment [Member]
Segment Reporting Information [Line Items]
Net revenues	69,852	25,523	144,785	74,660
Direct costs	(53,212)	(25,845)	(115,759)	(70,733)
Direct contribution	$ 16,640	$ (322)	$ 29,026	$ 3,927

Segment Reporting (Allocation of Long-Lived Tangible Assets Based on Geography) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	$ 302,489	$ 244,257
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	1,395	937
Argentina [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	115,700	100,536
Brazil [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	121,724	103,571
Mexico [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	46,488	30,131
Other Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	17,182	9,082
Total Other Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total property and equipment, net	$ 301,094	$ 243,320

Segment Reporting (Allocation of Goodwill and Intangible Assets Based on Geography) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Total goodwill and intangible assets	$ 93,294	$ 101,884
Argentina [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total goodwill and intangible assets	13,223	8,632
Brazil [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total goodwill and intangible assets	18,793	30,142
Mexico [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total goodwill and intangible assets	32,180	36,003
Chile [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total goodwill and intangible assets	22,685	22,237
Other Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total goodwill and intangible assets	$ 6,413	$ 4,870

Segment Reporting (Consolidated Net Revenues by Similar Products and Services) (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Sep. 30, 2020

Sep. 30, 2019

Segment Reporting, Revenue Reconciling Item [Line Items]

Net revenues

$ 1,115,701

$ 603,031

$ 2,646,161

$ 1,622,043

Commerce [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Net revenues

^[1]

724,466

346,208

1,686,879

957,029

Fintech [Member]

Segment Reporting, Revenue Reconciling Item [Line Items]

Net revenues

$ 391,235

$ 256,823

$ 959,282

$ 665,014

[1]	Includes marketplace fees, shipping fees, ad sales, classified fees and other ancillary services.

Fair Value Measurement of Assets and Liabilities (Narrative) (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Auction Rate Securities [Member] \| Direct Investment [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Non-financial assets	$ 0	$ 0
Non-financial liabilities	0	0
2028 Convertible Senior Notes [Member] \| Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Net carrying amount	$ 674,991,000	$ 686,366,000

Fair Value Measurement of Assets and Liabilities (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Financial Assets	$ 2,219,795	$ 2,453,046
Contingent considerations	4,555	2,201
Long-term retention plan	86,608	60,958
Derivative Instruments	1,642	251
Total Financial Liabilities	92,805	63,410
Derivative Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Assets	11,858	1,249
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Financial Assets	2,207,937	2,451,739
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Financial Assets		58
Long-term retention plan	86,608	60,958
Total Financial Liabilities	86,608	60,958
Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Financial Assets	11,858	1,249
Contingent considerations	4,555	2,201
Derivative Instruments	1,642	251
Total Financial Liabilities	6,197	2,452
Unobservable Inputs (Level 3) [Member] \| Derivative Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Assets	11,858	1,249
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	322,829	688,760
Restricted Cash and cash equivalents	13,559	32,829
Money Market Funds [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	322,829	688,760
Restricted Cash and cash equivalents	13,559	32,829
Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	591,860	506,175
Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	591,860	506,175
Sovereign Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents		32,874
Restricted Cash and cash equivalents		29,260
Investments	1,279,689	1,161,663
Sovereign Debt Securities [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents		32,874
Restricted Cash and cash equivalents		29,260
Investments	$ 1,279,689	1,161,663
Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		236
Corporate Debt Securities [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		178
Corporate Debt Securities [Member] \| Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		$ 58

Fair Value Measurement of Assets and Liabilities (Fair Value of Financial Assets and Liabilities Measured at Amortized Cost) (Details) - USD ($)
$ in Thousands

Sep. 30, 2020

Dec. 31, 2019

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

$ 1,409,012

$ 942,837

Liabilities

3,548,609

2,336,434

Accounts Payable And Accrued Expenses [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

^[1]

509,095

372,309

Funds Payable to Customers [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

1,421,825

894,057

Salaries and Social Security Payable [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

99,719

67,686

Taxes Payable [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

212,729

60,247

Loans Payable and Other Financial Liabilities [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

^[1]

1,236,501

817,491

Other Liabilities [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

^[1]

68,740

124,644

Significant Other Observable Inputs (Level 2) [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

1,409,012

942,837

Liabilities

3,632,359

2,446,846

Significant Other Observable Inputs (Level 2) [Member] | Accounts Payable And Accrued Expenses [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

^[1]

509,095

372,309

Significant Other Observable Inputs (Level 2) [Member] | Funds Payable to Customers [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

1,421,825

894,057

Significant Other Observable Inputs (Level 2) [Member] | Salaries and Social Security Payable [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

99,719

67,686

Significant Other Observable Inputs (Level 2) [Member] | Taxes Payable [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

212,729

60,247

Significant Other Observable Inputs (Level 2) [Member] | Loans Payable and Other Financial Liabilities [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

^[1]

1,320,251

927,903

Significant Other Observable Inputs (Level 2) [Member] | Other Liabilities [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liabilities

^[1]

68,740

124,644

Time Deposits [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

315,930

189,660

Time Deposits [Member] | Significant Other Observable Inputs (Level 2) [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

315,930

189,660

Accounts Receivable, Net [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

40,891

35,446

Accounts Receivable, Net [Member] | Significant Other Observable Inputs (Level 2) [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

40,891

35,446

Credit Cards Receivable And Other Means Of Payment, Net [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

660,402

379,969

Credit Cards Receivable And Other Means Of Payment, Net [Member] | Significant Other Observable Inputs (Level 2) [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

660,402

379,969

Loans Receivable, Net [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

254,208

188,544

Loans Receivable, Net [Member] | Significant Other Observable Inputs (Level 2) [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

254,208

188,544

Other Assets [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

137,581

149,218

Other Assets [Member] | Significant Other Observable Inputs (Level 2) [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Assets

$ 137,581

$ 149,218

[1]	The fair value of the 2028 Notes (including the equity component) is disclosed in Note 11.

Fair Value Measurement of Assets and Liabilities (Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities) (Details) - USD ($)
$ in Thousands

Sep. 30, 2020

Dec. 31, 2019

Schedule of Available-for-sale Securities [Line Items]

Cost

$ 2,199,025

$ 2,447,417

Gross Unrealized Gains

^[1]

2,085

Financial Gains

8,966

2,437

Financial Losses

(54)

(142)

Estimated Fair Value

2,207,937

2,451,797

Cash and Cash Equivalents [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

322,829

721,611

Financial Gains

Estimated Fair Value

322,829

721,634

Cash and Cash Equivalents [Member] | Money Market Funds [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

322,829

688,760

Estimated Fair Value

322,829

688,760

Cash and Cash Equivalents [Member] | Sovereign Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

32,851

Financial Gains

Estimated Fair Value

32,874

Restricted Cash and Cash Equivalents [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

13,559

62,056

Financial Gains

Estimated Fair Value

13,559

62,089

Restricted Cash and Cash Equivalents [Member] | Money Market Funds [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

13,559

32,829

Estimated Fair Value

13,559

32,829

Restricted Cash and Cash Equivalents [Member] | Sovereign Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

^[2]

29,227

Financial Gains

^[2]

Estimated Fair Value

^[2]

29,260

Short-Term Investments [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

1,862,637

1,403,180

Gross Unrealized Gains

^[1]

2,080

Financial Gains

8,966

2,380

Financial Losses

(54)

(59)

Estimated Fair Value

1,871,549

1,407,581

Short-Term Investments [Member] | Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

^[3]

587,983

504,195

Financial Gains

^[3]

3,877

1,980

Estimated Fair Value

^[3]

591,860

506,175

Short-Term Investments [Member] | Sovereign Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

1,274,654

^[3]

898,922

^[4]

Gross Unrealized Gains

^[1],[4]

2,080

Financial Gains

5,089

^[3]

400

^[4]

Financial Losses

(54)

^[3]

(59)

^[4]

Estimated Fair Value

$ 1,279,689

^[3]

901,343

^[4]

Short-Term Investments [Member] | Corporate Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

Estimated Fair Value

Short-Term Investments [Member] | U.S. Treasury Notes [Member]

Schedule of Available-for-sale Securities [Line Items]

Estimated Fair Value

627,842

Long-term Investments [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

260,570

Gross Unrealized Gains

^[1]

Financial Gains

Financial Losses

(83)

Estimated Fair Value

260,493

Long-term Investments [Member] | Sovereign Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

^[5]

260,400

Gross Unrealized Gains

^[1],[5]

Financial Gains

^[5]

Financial Losses

^[5]

(83)

Estimated Fair Value

^[5]

260,320

Long-term Investments [Member] | Corporate Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Cost

170

Gross Unrealized Gains

^[1]

Estimated Fair Value

173

Long-term Investments [Member] | U.S. Treasury Notes [Member]

Schedule of Available-for-sale Securities [Line Items]

Estimated Fair Value

260,230

Argentina Segment [Member] | Short-Term Investments [Member] | Sovereign Debt Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Estimated Fair Value

$ 16,623

[1]	Unrealized gains from securities are attributable to market price movements, net foreign exchange losses and foreign currency translation. Management does not believe any remaining significant unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of December 31, 2019.
[2]	Held by the Company’s Argentine subsidiary in guarantee for secured lines of credit. (See Note 11 – Loans payable and other financial liabilities.)
[3]	Measured at fair value with impact on the consolidated statement of income for the application of the fair value option. (See Note 2 – Fair value option applied to certain financial instruments.)
[4]	Includes $627,842 thousands of U.S treasury notes measured at fair value with impact on the consolidated statement of income for the application of the fair value option (See Note 2 – Investments - Fair value option applied to certain financial instruments.) and $16,623 thousands held by the Company’s Argentine subsidiary in guarantee for secured lines of credit. (See Note 11 – Loans payable and other financial liabilities.)
[5]	Includes $260,230 thousands of U.S treasury notes measured at fair value with impact on the consolidated statement of income for the application of the fair value option. (See Note 2 –Investments - Fair value option applied to certain financial instruments.)

Fair Value Measurement of Assets and Liabilities (Estimated Fair Values Of Cash Equivalents, Short-Term and Long-Term Investments, Effective Maturities) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value Measurement of Assets and Liabilities [Abstract]
One year or less	$ 2,207,937
Total	$ 2,207,937	$ 2,451,797

Commitments and Contingencies (Details)	9 Months Ended
Commitments and Contingencies (Details)	Sep. 30, 2020 USD ($) item	Dec. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Reserves for proceeding-related contingencies	$ 8,031,000
Aggregate amount for legal actions for which no loss amount has been accrued	21,035,000
Loss accrued for reasonably possible legal actions	$ 0
Period of reimbursement of amounts improperly withheld	5 years
Deposit with court	$ 42,845,000
Accrued interests	$ 4,333,000
Number of purchase commitments entered \| item	2
Buyer Protection Program [Member]
Loss Contingencies [Line Items]
Provision for maximum potential exposure	$ 2,037,501,000	$ 1,365,815,000
Product liability, contingency, recorded allowance	7,363,000	$ 3,808,000
Cloud Platform Services [Member]
Loss Contingencies [Line Items]
Paid in relation to the contract	2,392,000
Cloud Platform Services [Member] \| Fully Paid Off Between June 1, 2020 And May 31, 2024 [Member]
Loss Contingencies [Line Items]
Purchase Commitment, Amount	240,500,000
Paid in relation to the contract	14,007,000
Cloud Platform Services [Member] \| Fully Paid Off Between November 24, 2019 And March 23, 2023 [Member]
Loss Contingencies [Line Items]
Purchase Commitment, Amount	$ 30,000,000

Long Term Retention Program (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	$ 23,235	$ 16,105	$ 75,142	$ 48,313
LTRP 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan				26
LTRP 2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan		411	69	1,827
LTRP 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan				97
LTRP 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan		903	125	3,726
LTRP 2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	1,453	1,548	6,338	6,410
LTRP 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	2,955	2,456	13,010	10,063
LTRP 2017 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	3,332	2,554	13,892	9,530
LTRP 2018 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	1,578	1,385	6,941	4,708
LTRP 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	5,741	$ 6,848	16,061	$ 11,926
LTRP 2020 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Long term retention plan	$ 8,176		$ 18,706

Loans Payable And Other Financial Liabilities (Narrative) (Details)			9 Months Ended
	Nov. 04, 2020 USD ($)	Aug. 24, 2018 USD ($) $ / shares $ / item	Sep. 30, 2020 USD ($) item $ / shares $ / item	Aug. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Nov. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Nov. 30, 2018 USD ($)	Aug. 31, 2018 USD ($)
Two Note Converted [Member]
Debt Instrument [Line Items]
Convertible senior notes, amount converted			$ 2,000
One Note Conversion Requested [Member] \| Subsequent Events [Member]
Debt Instrument [Line Items]
Convertible senior notes, amount converted	$ 5,000
Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Number of notes converted \| item			2
Convertible Senior Notes [Member] \| Initial Issuance - 2028 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 800,000,000
Convertible Senior Notes [Member] \| Additional Issuance - 2028 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount										$ 80,000,000
Convertible Senior Notes [Member] \| 2028 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 880,000,000	$ 879,998,000			$ 880,000,000				$ 880,000,000
Debt instrument, interest rate		2.00%	2.00%			2.00%				2.00%
Debt instrument, maturity date			Aug. 15, 2028
Convertible senior notes, conversion rate		2.2553%
Converted instrument, principal amount used per conversion \| $ / item		1,000	100
Convertible senior notes, conversion price \| $ / shares		$ 443.40
Amount paid to enter into capped call transactions				$ 82,682,000	$ 104,095,000		$ 8,005,000	$ 88,362,000	$ 11,472,000	$ 91,784,000
Estimated fair value			$ 2,228,639,000			$ 1,338,014,000
Common stock, closing price per share \| $ / shares			$ 1,082.48
Debt instrument convertible, if-converted value in excess of principal			$ 1,268,356,000

Loans Payable And Other Financial Liabilities (Summary Of Loans Payable And Other Financial Liabilities) (Details) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2020

Dec. 31, 2019

Debt Instrument [Line Items]

Convertible notes, current

$ 2,249

$ 6,649

Finance lease obligations, current

2,168

2,008

Credit card collateralized debt

10,679

17,309

Collateralized debt, current

43,589

43,862

Other lines of credit, current

117

Current loans payable and other financial liabilities

618,164

186,138

Convertible notes, noncurrent

588,993

569,305

Finance lease obligations, noncurrent

5,538

7,368

Collateralized debt, noncurrent

23,806

54,680

Non Current loans payable and other financial liabilities

618,337

631,353

Loans From Banks, 1.68% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 64,727

38,780

Debt weight average rate

1.68%

Loans From Banks, CDI+3.35% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 63,902

Loans From Banks, CDI+3.35% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

3.35%

Loans From Banks, CDI+3.90% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 5,471

Loans From Banks, CDI+3.90% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

3.90%

Loans From Banks, CDI+3.25% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 39,915

Loans From Banks, CDI+3.25% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

3.25%

Loans From Banks, CDI+2.9% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 9,004

Loans From Banks, CDI+2.9% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

2.90%

Loans From Banks, TIIE+2.55% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 16,555

Loans From Banks, TIIE+2.55% [Member] | TIIE [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

2.55%

Loans From Banks, 32.50% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 13,326

Debt weight average rate

32.50%

Loans From Banks, 7.51% [Member]

Debt Instrument [Line Items]

Loans from bank, current

$ 8,224

Debt weight average rate

7.51%

Secured Lines Of Credit [Member]

Debt Instrument [Line Items]

Lines of credit, current

49,499

Secured Lines Of Credit, CDI+1.00% [Member]

Debt Instrument [Line Items]

Lines of credit, current

^[1]

$ 100,692

Secured Lines Of Credit, CDI+1.00% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

1.00%

Secured Lines Of Credit, CDI+1.50% [Member]

Debt Instrument [Line Items]

Lines of credit, current

^[1]

$ 97,140

Secured Lines Of Credit, CDI+1.50% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

1.50%

Secured Lines Of Credit, CDI+0.55% [Member]

Debt Instrument [Line Items]

Lines of credit, current

$ 53,516

Secured Lines Of Credit, CDI+0.55% [Member] | CDI [Member]

Debt Instrument [Line Items]

Basis spread on variable rate

0.55%

Unsecured Line Of Credit 8.21% [Member]

Debt Instrument [Line Items]

Lines of credit, current

$ 17,870

16,435

Debt weight average rate

8.21%

Unsecured Line Of Credit 24.06% [Member]

Debt Instrument [Line Items]

Lines of credit, current

$ 69,020

9,645

Debt weight average rate

24.06%

Unsecured Line Of Credit -% [Member]

Debt Instrument [Line Items]

Lines of credit, current

$ 1,951

[1]

Loans Payable And Other Financial Liabilities (Carrying Amounts of Liability and Equity Components) (Details) - Convertible Senior Notes [Member] - 2028 Convertible Senior Notes [Member] - USD ($)

9 Months Ended

Sep. 30, 2020

Dec. 31, 2019

Aug. 31, 2018

Aug. 24, 2018

Debt Instrument [Line Items]

Amount of the equity component

^[1]

$ 327,305,000

Convertible senior notes

879,998,000

880,000,000

$ 880,000,000

Unamortized debt discount

^[2]

(281,958,000)

(301,227,000)

Unamortized transaction costs related to the debt component

(9,047,000)

(9,468,000)

Contractual coupon interest accrual

37,009,000

23,809,000

Contractual coupon interest payment

(34,760,000)

(17,160,000)

Net carrying amount

$ 591,242,000

$ 575,954,000

Convertible senior notes, interest rate

2.00%

Transaction Costs Allocated Between Liability And Equity Components

$ 6,163,000

Remaining period over which the unamortized debt discount will be amortized

8 years

[1]	Net of $6,163 thousands of transaction costs related to the equity component of the 2028 Notes.
[2]	As of September 30, 2020, the remaining period over which the unamortized debt discount will be amortized is 8.0 years.

Loans Payable And Other Financial Liabilities (Summary Of Interest Expense for Contractual Interest and Accretion of Debt Discount) (Details) - Convertible Senior Notes [Member] - 2028 Convertible Senior Notes [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Contractual coupon interest expense	$ 4,400	$ 4,400	$ 13,200	$ 13,542
Amortization of debt discount	6,542	6,081	19,269	18,366
Amortization of debt issuance costs	146	123	421	362
Total interest expense related to the Notes	$ 11,088	$ 10,604	$ 32,890	$ 32,270

Equity Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 09, 2020	Mar. 29, 2019	Mar. 15, 2019	Sep. 30, 2020	Mar. 31, 2019	Sep. 30, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Stock Issued During Period, Value, New Issues				$ 49,344	$ 1,866,500
Common stock, par value				$ 0.001		$ 0.001	$ 0.001
Redeemable convertible preferred stock, Par Value				0.001		0.001	$ 0.001
Common Stock, Convertible, Conversion Price						$ 479.71
Funds raised from aggregate issuance						$ 1,965,903
Equity, issuance cost						$ 34,097
Preferred stock, par value				$ 1,000		$ 1,000
Preferred stock, cash dividend percent						4.00%
Common Stock [Member]
Class of Stock [Line Items]
Common Stock Value At Offering			$ 1,150,000
Common Stock Value At Offering, Per Share			$ 480
Stock Issued During Period, Shares, New Issues			2,395,834
Common Stock Value At Offering, Underwriters' Option, Additional Shares Value			$ 150,000
Common stock, par value			$ 0.001
Common Stock [Member] \| Holder Of 50,000 Preferred Stock Shares Request [Member]
Class of Stock [Line Items]
Request for new shares issued	104,230
Series A Preferred Stock [Member] \| Holder Of 50,000 Preferred Stock Shares Request [Member]
Class of Stock [Line Items]
Shares requested for conversion	50,000
PayPay, Inc. [Member] \| Common Stock [Member]
Class of Stock [Line Items]
Common Stock Value At Offering, Per Share			$ 436.10
Stock Issued During Period, Value, New Issues			$ 750,000
Stock Issued During Period, Shares, New Issues			1,719,790
Dragoneer Investment Group [Member] \| Series A Preferred Stock [Member]
Class of Stock [Line Items]
Stock Issued During Period, Value, New Issues		$ 100,000
Stock Issued During Period, Shares, New Issues		100,000
Redeemable convertible preferred stock, Par Value		$ 0.001

Securitization Transactions (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Brazil [Member]
Debt Instrument [Line Items]
Collateralized debt	$ 31,826
Argentina [Member]
Debt Instrument [Line Items]
Collateralized debt	11,602
Collateralized Debt, Due June 2021 [Member] \| Brazil [Member]
Debt Instrument [Line Items]
Collateralized debt	$ 7,129
Debt term	36 months
Collateralized Debt, Due May 2021 [Member] \| Brazil [Member]
Debt Instrument [Line Items]
Collateralized debt	$ 24,697
Debt term	30 months
Collateralized Debt, Due November 2022 [Member] \| Mexico [Member]
Debt Instrument [Line Items]
Collateralized debt	$ 23,967
Debt term	36 months
Maximum [Member] \| Collateralized Debt, Due July 2021 [Member] \| Argentina [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	37.00%
Minimum [Member] \| Collateralized Debt, Due July 2021 [Member] \| Argentina [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	27.00%
Brazilian DI Rate [Member] \| Collateralized Debt, Due June 2021 [Member] \| Brazil [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	3.50%
Brazilian DI Rate [Member] \| Collateralized Debt, Due May 2021 [Member] \| Brazil [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	3.25%
BADLAR Rate [Member] \| Collateralized Debt, Due July 2021 [Member] \| Argentina [Member]
Debt Instrument [Line Items]
Collateralized debt	$ 6,592
Basis spread on variable rate	2.00%
Debt term	10 months
BADLAR Rate [Member] \| Collateralized Debt, Due March 2021 [Member] \| Argentina [Member]
Debt Instrument [Line Items]
Collateralized debt	$ 5,010
Basis spread on variable rate	2.00%
Debt term	9 months
BADLAR Rate [Member] \| Maximum [Member] \| Collateralized Debt, Due March 2021 [Member] \| Argentina [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	37.00%
BADLAR Rate [Member] \| Minimum [Member] \| Collateralized Debt, Due March 2021 [Member] \| Argentina [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	27.00%
Diario Oficial [Member] \| Collateralized Debt, Due November 2022 [Member] \| Mexico [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	3.34%

Securitization Transactions (Assets And Liabilities Of The Trust) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Securitization Transactions [Line Items]
Restricted cash and cash equivalents	$ 484,426	$ 66,684
Loans receivable, net	239,135	182,105
Total current assets	4,923,891	3,788,856
Loans receivable, net	15,073	6,439
Total non-current assets	813,828	992,835
Total assets	5,737,719	4,781,691
Accounts payable and accrued expenses	509,095	372,309
Loans payable and other financial liabilities	618,164	186,138
Total current liabilities	3,007,260	1,752,320
Loans payable and other financial liabilities	618,337	631,353
Total non-current liabilities	934,933	947,408
Total liabilities	3,942,193	2,699,728
Trust Created In Brazil [Member]
Securitization Transactions [Line Items]
Restricted cash and cash equivalents	29,274	37,424
Loans receivable, net	67,986	104,419
Total current assets	97,260	141,843
Loans receivable, net	4,786	4,395
Total non-current assets	4,786	4,395
Total assets	102,046	146,238
Accounts payable and accrued expenses	67	128
Loans payable and other financial liabilities	43,589	43,862
Total current liabilities	43,656	43,990
Loans payable and other financial liabilities	23,806	54,680
Total non-current liabilities	23,806	54,680
Total liabilities	$ 67,462	$ 98,670

Leases (Supplemental Balance Sheet Information Related To Leases) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease right-of-use assets	$ 225,345	$ 200,449
Operating lease liabilities	228,718	199,932
Finance Leases, Property and equipment, at cost	12,357	10,952
Finance Leases, Accumulated depreciation	(3,247)	(1,563)
Finance Leases, Property and equipment, net	9,110	9,389
Loans payable and other financial liabilities	$ 7,706	$ 9,376

Leases (Summary Of Weighted Average Remaining Lease Term And Discount Rate) (Details)

Sep. 30, 2020

Leases [Abstract]

Weighted average remaining lease term, Operating leases

8 years

Weighted average remaining lease term, Finance leases

3 years

Weighted average discount rate, Operating leases

10.00%

^[1]

Weighted average discount rate, Finance leases

17.00%

^[1]

[1]	Includes discount rates of leases in local currency and U.S dollar.

Leases (Components Of Lease Expense) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 29,941	$ 21,503
Depreciation of property and equipment	1,564	1,024
Interest on lease liabilities	1,199	1,110
Total finance lease cost	$ 2,763	$ 2,134

Leases (Supplemental Cash Flow Information Related To Leases) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Operating cash flows from operating leases	$ 28,705	$ 17,315
Financing cash flows from finance leases	2,499	1,416
Right-of-use assets obtained in exchange for lease obligations: Operating leases	73,340	69,154
Right-of-use assets obtained in exchange for lease obligations: Finance leases	$ 1,487	$ 4,379

Leases (Maturities Of Lease Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Operating Leases, One year or less	$ 45,405
Operating Leases, One year to two years	43,580
Operating Leases, Two years to three years	40,915
Operating Leases, Three years to four years	39,373
Operating Leases, Fours years to five years	35,551
Operating Leases, Thereafter	113,885
Operating Leases, Total lease payments	318,709
Operating Leases, Less imputed interest	(89,991)
Operating leases, Total	228,718	$ 199,932
Finance Leases, One year or less	3,296
Finance Leases, One year to two years	3,296
Finance Leases, Two years to three years	3,110
Finance Leases, Three years to four years	1,259
Finance Leases, Total lease payments	10,961
Finance Leases, Less imputed interest	(3,255)
Finance Leases, Total	$ 7,706	$ 9,376

Derivative Instruments (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Feb. 28, 2021	Jan. 31, 2021	Dec. 31, 2020	Nov. 30, 2020	Oct. 31, 2020
Forecast [Member] \| Foreign Exchange Contracts, Forecasted Purchases Of MPOS Devices [Member]
Derivative [Line Items]
Derivative, Notional Amount	$ 6,015	$ 6,115	$ 7,170	$ 9,819	$ 11,615
Forecast [Member] \| Foreign Exchange Contract Entered, USD To Brazilian Reais [Member]
Derivative [Line Items]
Derivative, Notional Amount			65,000	76,000	$ 20,000
Forecast [Member] \| Foreign Exchange Contract Entered, USD To Mexican Peso [Member]
Derivative [Line Items]
Derivative, Notional Amount	$ 10,000	$ 10,000	$ 10,000	$ 10,000
Subsequent Events [Member] \| Foreign Exchange Contracts, Forecasted Purchases Of MPOS Devices [Member]
Derivative [Line Items]
Derivative, Notional Amount						$ 10,187
Subsequent Events [Member] \| Foreign Exchange Contract Entered, USD To Brazilian Reais [Member]
Derivative [Line Items]
Derivative, Notional Amount						10,000
Subsequent Events [Member] \| Foreign Exchange Contract Entered, USD To Mexican Peso [Member]
Derivative [Line Items]
Derivative, Notional Amount						$ 30,000

Derivative Instruments (Summary Of Outstanding Derivative Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Other Current Assets [Member] \| Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative	$ 1,264
Other Current Assets [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative	10,594	$ 1,249
Other Current Liabilities [Member] \| Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative		$ 251
Other Current Liabilities [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative	$ 1,642

Derivative Instruments (Effect Of Derivative Contracts) (Details) - Designated as Hedging Instrument [Member] - Foreign Exchange Contract [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Beginning Balance	$ (250)
Amount of Gain (Loss) recognized in other comprehensive loss	8,047
Amount of gain reclassified from accumulated other comprehensive loss (income)	(5,985)
End Balance	$ 1,812

Derivative Instruments (Fair Value Of Derivative Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivative Instruments [Abstract]
Foreign exchange contracts not designated as hedging instruments	$ 4,709	$ 3,239	$ 26,535	$ 3,308
Loss from foreign exchange contracts designated as fair value hedges		1,472		442
Gain from hedged items attributable to hedged risks		$ (1,472)		$ (442)

Share Repurchase Program (Details) - August 30, 2020 Board Authorized Repurchase Program [Member] - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Aug. 30, 2020	Sep. 30, 2020
Equity, Class of Treasury Stock [Line Items]
Common stock, par value	$ 0.001
Aggregate consideration amount of repurchase program	$ 350,000
Common Stock repurchased, shares		37,572
Loss on repurchase of shares		$ 30,497
Repurchase program, expiration date		Aug. 31, 2021

Impact of COVID-19 Pandemic (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Cash and Cash Equivalents [Line Items]
Percent of revenue increase from prior year	63.10%
Cash, Cash Equivalents, and Short-term Investments	$ 2,663,536
Short-term Investments	2,187,479	$ 1,597,241
Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member]
Cash and Cash Equivalents [Line Items]
Short-term Investments	591,860	506,175
Sovereign Debt Securities (Secured Lines Of Credit Guarantee) [Member]
Cash and Cash Equivalents [Line Items]
Short-term Investments	71,786	16,623
Fair Value, Measurements, Recurring [Member] \| Sovereign Debt Securities (Central Bank of Brazil Mandatory Guarantee) [Member]
Cash and Cash Equivalents [Line Items]
Investments	$ 591,860	$ 506,175