SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Error Corrections and Prior Period Adjustments

The following tables, recast for the changes summarized above, present condensed statement of income line items affected by the revisions and reclassifications of previously reported financial statements, detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements:


	Three Months Ended March 31, 2023		Six Months Ended June 30, 2023		Nine Months Ended September 30, 2023						For the Year Ended December 31, 2023
	Recast		Recast		As reported		Reclassification		Recast		Recast
	(In millions)		(In millions)		(In millions)						(In millions)
Net service revenues and financial income	$	2,912	$	6,133	$	9,233	$	486	$	9,719	$	13,617
Net product revenues	274		638		979		—		979		1,490
Net revenues and financial income	3,186		6,771		10,212		486		10,698		15,107
Cost of net revenues and financial expenses	(1,572)		(3,326)		(4,961)		(197)		(5,158)		(7,517)
Gross profit	1,614		3,445		5,251		289		5,540		7,590
Operating expenses:
Product and technology development	(381)		(749)		(1,145)		—		(1,145)		(1,831)
Sales and marketing	(383)		(766)		(1,207)		—		(1,207)		(1,736)
Provision for doubtful accounts	(252)		(474)		(751)		—		(751)		(1,050)
General and administrative	(180)		(369)		(565)		—		(565)		(766)
Total operating expenses	(1,196)		(2,358)		(3,668)		—		(3,668)		(5,383)
Income from operations	418		1,087		1,583		289		1,872		2,207

Other income (expenses):
Interest income and other financial gains	23		57		545		(450)		95		135
Interest expense and other financial losses	(34)		(83)		(297)		161		(136)		(174)
Foreign currency losses, net	(87)		(269)		(508)		—		(508)		(615)
Net income before income tax expense and equity in earnings of unconsolidated entity	320		792		1,323		—		1,323		1,553

Income tax expense	(122)		(332)		(504)		—		(504)		(569)
Equity in earnings of unconsolidated entity	3		3		3		—		3		3
Net income	$	201	$	463	$	822	$	—	$	822	$	987


	Three Months Ended March 31, 2023		Three Months Ended June 30, 2023		Three Months Ended September 30, 2023						Three Months Ended December 31, 2023		For the year ended December 31, 2023
	Recast		Recast		As reported		Reclassification		Recast		Recast		Recast
	(In millions)		(In millions)		(In millions)						(In millions)		(In millions)
Net service revenues and financial income	$	2,912	$	3,221	$	3,419	$	167	$	3,586	$	3,898	$	13,617
Net product revenues	274		364		341		—		341		511		1,490
Net revenues and financial income	3,186		3,585		3,760		167		3,927		4,409		15,107
Cost of net revenues and financial expenses	(1,572)		(1,754)		(1,765)		(67)		(1,832)		(2,359)		(7,517)
Gross profit	1,614		1,831		1,995		100		2,095		2,050		7,590
Operating expenses:
Product and technology development	(381)		(368)		(396)		—		(396)		(686)		(1,831)
Sales and marketing	(383)		(383)		(441)		—		(441)		(529)		(1,736)
Provision for doubtful accounts	(252)		(222)		(277)		—		(277)		(299)		(1,050)
General and administrative	(180)		(189)		(196)		—		(196)		(201)		(766)
Total operating expenses	(1,196)		(1,162)		(1,310)		—		(1,310)		(1,715)		(5,383)
Income from operations	418		669		685		100		785		335		2,207

Other income (expenses):
Interest income and other financial gains	23		34		196		(158)		38		40		135
Interest expense and other financial losses	(34)		(49)		(111)		58		(53)		(38)		(174)
Foreign currency losses, net	(87)		(182)		(239)		—		(239)		(107)		(615)
Net income before income tax expense and equity in earnings of unconsolidated entity	320		472		531		—		531		230		1,553

Income tax expense	(122)		(210)		(172)		—		(172)		(65)		(569)
Equity in earnings of unconsolidated entity	3		—		—		—		—		—		3
Net income	$	201	$	262	$	359	$	—	$	359	$	165	$	987

Furthermore, the following tables, recast for the changes summarized above, present net revenues per reporting segment (which have been disaggregated by similar products and services), detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements for the nine and three-month periods ended September 30, 2023:


	Nine Months Ended September 30, 2023
As reported	Brazil		Mexico		Argentina		Other countries		Total
	(In millions)
Commerce services	$	2,615	$	1,160	$	727	$	293	$	4,795
Commerce products sales	552		212		158		23		945
Total commerce revenues	3,167		1,372		885		316		5,740
Fintech services	1,375		198		927		134		2,634
Credit revenues	808		489		502		5		1,804
Fintech products sales	15		7		3		9		34
Total fintech revenues	2,198		694		1,432		148		4,472
Total net revenues	$	5,365	$	2,066	$	2,317	$	464	$	10,212


	Nine Months Ended September 30, 2023
Reclassification	Brazil		Mexico		Argentina		Other countries		Total
	(In millions)



Financial services and income	$	179	$	63	$	235	$	9	$	486


Total fintech revenues	179		63		235		9		486
Net revenues and financial income	$	179	$	63	$	235	$	9	$	486


	Nine Months Ended September 30, 2023
Recast	Brazil		Mexico		Argentina		Other countries		Total
	(In millions)
Commerce services	$	2,615	$	1,160	$	727	$	293	$	4,795
Commerce products sales	552		212		158		23		945
Total commerce revenues	3,167		1,372		885		316		5,740
Financial services and income	1,554		261		1,162		143		3,120
Credit revenues	808		489		502		5		1,804
Fintech products sales	15		7		3		9		34
Total fintech revenues	2,377		757		1,667		157		4,958
Net revenues and financial income	$	5,544	$	2,129	$	2,552	$	473	$	10,698


	Three Months Ended September 30, 2023
As reported	Brazil		Mexico		Argentina		Other countries		Total
	(In millions)
Commerce services	$	1,007	$	429	$	260	$	100	$	1,796
Commerce products sales	204		70		50		8		332
Total commerce revenues	1,211		499		310		108		2,128
Fintech services	487		75		344		45		951
Credit revenues	304		195		171		2		672
Fintech products sales	4		3		—		2		9
Total fintech revenues	795		273		515		49		1,632
Total net revenues	$	2,006	$	772	$	825	$	157	$	3,760


	Three Months Ended September 30, 2023
Reclassification	Brazil		Mexico		Argentina		Other countries		Total
	(In millions)



Financial services and income	$	57	$	23	$	85	$	2	$	167


Total fintech revenues	57		23		85		2		167
Total net revenues and financial income	$	57	$	23	$	85	$	2	$	167


	Three Months Ended September 30, 2023
Recast	Brazil		Mexico		Argentina		Other countries		Total
	(In millions)
Commerce services	$	1,007	$	429	$	260	$	100	$	1,796
Commerce products sales	204		70		50		8		332
Total commerce revenues	1,211		499		310		108		2,128
Financial services and income	544		98		429		47		1,118
Credit revenues	304		195		171		2		672
Fintech products sales	4		3		—		2		9
Total fintech revenues	852		296		600		51		1,799
Total net revenues and financial income	$	2,063	$	795	$	910	$	159	$	3,927

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

The following table sets forth the assets, liabilities and net assets of the Company’s Argentine subsidiaries and consolidated VIEs, before intercompany eliminations, as of September 30, 2024 and December 31, 2023:


	September 30, 2024		December 31, 2023
	(In millions)
Assets	$	4,083	$	3,298
Liabilities	3,064		1,878
Net assets	$	1,019	$	1,420

Schedule of Net Revenues and Net Income Before Income Tax of Company's Subsidiaries

The following table provides information relating to net revenues and financial income and direct contribution (see Note 9 – Segments of these unaudited interim condensed consolidated financial statements for definition of direct contribution) for the nine and three-month periods ended September 30, 2024 and 2023 of the Company’s Argentine subsidiaries and consolidated VIEs:


	Nine Months Ended September 30,				Three Months Ended September 30,
	2024		2023		2024		2023
	(In millions)				(In millions)
Net revenues and financial income	$	2,511	$	2,552	$	1,033	$	910
Direct contribution	1,062		1,238		457		463