MERCADOLIBRE INCMELI
MERCADOLIBRE INC Fair Value Disclosure
FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES
Assets and liabilities measured and recorded at fair value on a recurring basis
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
| Balances as of December 31, 2025 | Quoted Prices in active markets for identical Assets (Level 1) | Significant other observable inputs (Level 2) | Unobservable inputs (Level 3) | Balances as of December 31, 2024 | Quoted Prices in active markets for identical Assets (Level 1) | Significant other observable inputs (Level 2) | Unobservable inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market | $ | 856 | $ | 856 | $ | — | $ | — | $ | 572 | $ | 572 | $ | — | $ | — | |||||||||||||||||||||||||||||||
U.S. government debt securities (1) | 46 | 46 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Foreign government debt securities (1) | 16 | 16 | — | — | 4 | 4 | — | — | |||||||||||||||||||||||||||||||||||||||
| Restricted cash and cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||
Money market (2) | 259 | 259 | — | — | 297 | 297 | — | — | |||||||||||||||||||||||||||||||||||||||
Foreign government debt securities (1) | 14 | 14 | — | — | 469 | 469 | — | — | |||||||||||||||||||||||||||||||||||||||
| Investments: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. government debt securities (1) | 1,982 | 1,982 | — | — | 1,087 | 1,087 | — | — | |||||||||||||||||||||||||||||||||||||||
Foreign government debt securities (1) (3) | 1,661 | 1,661 | — | — | 4,114 | 4,114 | — | — | |||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 399 | 399 | — | — | 262 | 262 | — | — | |||||||||||||||||||||||||||||||||||||||
| Equity securities at fair value | 59 | 59 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Derivative instruments | 41 | — | 41 | — | 58 | — | 58 | — | |||||||||||||||||||||||||||||||||||||||
| USDC | 3 | 3 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Intangible assets at fair value | — | — | — | — | 49 | 49 | — | — | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 5,336 | $ | 5,295 | $ | 41 | $ | — | $ | 6,912 | $ | 6,854 | $ | 58 | $ | — | |||||||||||||||||||||||||||||||
| Salaries and social security payable: | |||||||||||||||||||||||||||||||||||||||||||||||
| Long-term retention program | $ | 176 | $ | — | $ | 176 | $ | — | $ | 163 | $ | — | $ | 163 | $ | — | |||||||||||||||||||||||||||||||
| Other Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Contingent considerations | 4 | — | — | 4 | 4 | — | — | 4 | |||||||||||||||||||||||||||||||||||||||
| 83 | — | 83 | — | 31 | — | 31 | — | ||||||||||||||||||||||||||||||||||||||||
Meli Dólar liability (1) | 61 | — | 61 | — | 31 | — | 31 | ||||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | 324 | $ | — | $ | 320 | $ | 4 | $ | 229 | $ | — | $ | 225 | $ | 4 | |||||||||||||||||||||||||||||||
(1) Measured at fair value with impact on the consolidated statements of income for the application of the fair value option. (See Note 2 – Summary of significant accounting policies – Fair value option applied to certain investments and Meli Dólar liability.)
(2) As of December 31, 2025 and 2024 includes $206 million and $283 million, respectively, of money market funds from securitization transactions. (See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)
(3) As of December 31, 2025 and 2024 includes $8 million and $12 million, respectively, of investments from securitization transactions. (See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)
The Company’s assets and liabilities measured and recorded at fair value on a recurring basis were valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets); ii) Level 2 inputs: obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date; and iii) Level 3 inputs: valuations based on unobservable inputs reflecting Company’s assumptions. The unobservable inputs of the fair value of contingent considerations classified as Level 3 refer to the amounts to be paid according to the agreement of an acquisition, the likelihood of achievement of the targets included in that arrangement (expected to be 100%), and the Company’s historical experience with similar arrangements. Reasonable variation on those unobservable inputs would not significantly change the fair value of those instruments. As of December 31, 2025 and 2024, the Company had not changed the methodology nor the assumptions used to estimate the fair value of the financial instruments.
There were no transfers to and from Levels 1, 2 and 3 during the years ended December 31, 2025 and 2024.
The Company’s election of the fair value option applies to: i) foreign government debt securities, ii) U.S. government debt securities and iii) Meli Dólar liability. The Company recognized fair value changes of foreign and U.S. government debt securities, which include the related interest income of those instruments, in net service revenues and financial income if it is related to Mercado Pago’s operations or in interest income and other financial gains if not. Such fair value changes and interest income amount to gains of $450 million and $329 million in net service revenues and financial income, and $83 million and $57 million in interest income and other financial gains for the years ended December 31, 2025 and 2024, respectively. The Meli Dólar liability has not presented changes in its fair value for the years ended December 31, 2025 and 2024.
As of December 31, 2025 and 2024, the amortized cost of the Company’s investment in corporate debt securities classified as available for sale amounted to $392 million and $259 million, respectively, and the estimated fair value amounted to $399 million and $262 million, respectively. The amortized cost of these securities is determined under a specific identification basis. As of December 31, 2025 and 2024, the gross unrealized gains accumulated in the consolidated statements of comprehensive income amounted to $7 million and $3 million, respectively. For the year ended December 31, 2025 and 2024, the proceeds from sales of corporate debt securities amounted to $57 million and $26 million, respectively.
The following table summarizes the net carrying amount of the corporate debt securities classified as available for sale, classified by its contractual maturities:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
(In millions) | |||||||||||
| One year or less | $ | 54 | $ | 87 | |||||||
| One year to two years | 73 | 45 | |||||||||
| Two years to three years | 145 | 21 | |||||||||
| Three years to four years | 99 | 63 | |||||||||
| Four years to five years | 28 | 46 | |||||||||
Total available for sale investments | $ | 399 | $ | 262 | |||||||
The following table summarizes the net carrying amount of the debt securities at fair value not classified as available for sale (U.S. and foreign government debt securities), classified by its contractual maturities or Management’s expectation to convert the investments into cash:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
(In millions) | |||||||||||
| One year or less | $ | 2,412 | $ | 4,711 | |||||||
| One year to two years | 174 | 475 | |||||||||
| Two years to three years | 168 | 152 | |||||||||
| Three years to four years | 385 | 231 | |||||||||
| Four years to five years | 248 | 104 | |||||||||
| More than five years | 332 | 1 | |||||||||
Total debt securities at fair value not classified as available for sale | $ | 3,719 | $ | 5,674 | |||||||
Financial assets and liabilities not measured and recorded at fair value
The following table summarizes the estimated fair value level of the financial assets and liabilities of the Company not measured at fair value as of December 31, 2025 and 2024:
| Balances as of December 31, 2025 | Estimated fair value as of December 31, 2025 | Balances as of December 31, 2024 | Estimated fair value as of December 31, 2024 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 2,752 | $ | 2,752 | $ | 2,059 | $ | 2,059 | |||||||||||||||
Restricted cash and cash equivalents (1) | 9,594 | 9,594 | 1,298 | 1,298 | |||||||||||||||||||
| Investments | 239 | 239 | 160 | 160 | |||||||||||||||||||
| Accounts receivables, net | 369 | 369 | 255 | 255 | |||||||||||||||||||
| Credit card receivables and other means of payment, net | 7,046 | 7,046 | 5,288 | 5,288 | |||||||||||||||||||
| Loans receivable, net | 9,365 | 9,166 | 4,895 | 4,840 | |||||||||||||||||||
| Other assets | 300 | 300 | 114 | 114 | |||||||||||||||||||
| Total Assets | $ | 29,665 | $ | 29,466 | $ | 14,069 | $ | 14,014 | |||||||||||||||
| Accounts payable and accrued expenses | $ | 4,502 | $ | 4,502 | $ | 3,196 | $ | 3,196 | |||||||||||||||
| Funds payable to customers | 13,029 | 13,029 | 6,954 | 6,954 | |||||||||||||||||||
| Amounts payable due to credit and debit card transactions | 3,771 | 3,771 | 1,964 | 1,964 | |||||||||||||||||||
| Salaries and social security payable | 740 | 740 | 564 | 564 | |||||||||||||||||||
| Loans payable and other financial liabilities | 9,063 | 9,014 | 5,593 | 5,499 | |||||||||||||||||||
| Other liabilities | 340 | 340 | 356 | 356 | |||||||||||||||||||
| Total Liabilities | $ | 31,445 | $ | 31,396 | $ | 18,627 | $ | 18,533 | |||||||||||||||
(1) As of December 31, 2025 and 2024 includes $55 million and $38 million of cash in banks, and $126 million and $171 million of time deposits from securitization transactions, respectively. (See Note 3 – Cash, cash equivalents, restricted cash and cash equivalents and investments.)
As of December 31, 2025, the carrying value of the Company’s investment in foreign debt securities held to maturity amounted to $146 million and its contractual maturity is less than a year.
As of December 31, 2025 and 2024, the carrying value of the Company’s financial assets with determinable fair value (except for loans receivable) not measured at fair value approximated their fair value mainly because of their short-term maturity. If these financial assets were measured at fair value in the financial statements, cash and restricted cash would be classified as Level 1 (where cost and fair value are aligned), foreign debt securities held to maturity would be classified as Level 3 and the remaining financial assets would be classified as Level 2. The estimated fair value of the loans receivable would be classified as Level 3 based on the Company’s assumptions.
As of December 31, 2025 and 2024, the carrying value of the Company’s financial liabilities (except for the 3.125% Notes due 2031, the 4.900% Notes due 2033, and the 2.375% Sustainability Senior Notes Due 2026 as of December 31, 2024) not measured at fair value approximated their fair value mainly because of their short-term maturity or because the effective interest rates are not materially different from market interest rates. If these financial liabilities were measured at fair value in the financial statements, these would be classified as Level 2. As of December 31, 2025 and 2024, the estimated fair value of the 3.125% Notes due 2031 would be $501 million and $475 million, respectively, as of December 31, 2025 the estimated fair value of the 4.900% Notes due 2033 would be $726 million, and as of December 31, 2024, the estimated fair value of the 2026 Notes would have been $$351 million, which are based on Level 2 inputs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.