MercadoLibre Q3 Earnings Call Highlights

Key Points

• Revenue and financial income grew 41% year over year on an FX-neutral basis, while operating income was $676 million and the operating margin fell 40 basis points sequentially to 6.3%. Higher shipping costs and sales and marketing investment weighed on margins as management prioritized growth.
• Brazil led commerce growth, with gross merchandise volume up 36% year over year; items purchased per buyer rose 16%. Shipping costs were a roughly 60-basis-point sequential margin headwind, though management expects some capacity-related pressure to ease in Q4.
• Fintech continued to expand: monthly active users grew 29%, assets under management 67%, and the credit portfolio 62% year over year. Delinquencies were stable, and management said it remains cautious about risk while pursuing lending growth.

MercadoLibre NASDAQ: MELI reported 41% year-over-year growth in net revenue and financial income on a foreign-exchange-neutral basis for the quarter ended September 30, 2026, as growth in Brazil and its financial technology business helped offset pressure on operating margins.

Operating income was $676 million, and the operating margin was 6.3%, down 40 basis points from the prior quarter. CFO Martín de los Santos attributed the sequential decline to higher net shipping costs and increased sales and marketing spending, including investment in the company’s affiliate program in Brazil.

Management said the spending is intended to encourage customers to shop and use financial services more frequently, even at the expense of near-term margins. “We are investing part of today’s margin to accelerate the shift of commerce and financial services online in Latin America,” de los Santos said.

Brazil growth and shipping costs

Brazil was the company’s fastest-growing market, with gross merchandise volume rising 36% year over year, de los Santos said. Across the business, items purchased per buyer grew 16%, remaining in double digits after the company had fully passed the anniversary of a reduction in its free-shipping threshold.

That threshold change encouraged more frequent purchases in smaller baskets, reducing revenue per shipment. Shipping was a net headwind of approximately 60 basis points to the operating margin from the prior quarter, de los Santos said. Other factors included higher energy prices, temporary recruitment costs and the addition of almost 20% more fulfillment space ahead of peak season.

De los Santos said the company expects part of the capacity-related pressure to reverse in the fourth quarter as volumes rise, while some pressure from energy costs is likely to remain. In Brazil, cost per shipment declined 5% year over year on an FX-neutral basis, despite the added capacity and higher energy prices.

Sales and marketing expenses rose 40 basis points sequentially to 11.6% of net revenue. Orders through the affiliate channel grew 240% year over year, and MercadoLibre’s affiliate network surpassed 12 million members across the region, de los Santos said.

CEO Ariel Szarfsztejn said social media is becoming an additional product-discovery channel, although he expects traffic generated by customers returning directly to MercadoLibre to remain the majority of e-commerce volume. De los Santos described affiliate development as a strategic initiative, with spending intensity adjusted according to performance.

Credit growth continues amid caution

MercadoLibre’s fintech monthly active users grew 29% year over year, assets under management rose 67%, and the credit portfolio expanded 62%. Nonperforming loans remained stable despite weaker credit conditions in Brazil and Argentina, de los Santos said.

Osvaldo Giménez, president of fintech, said loans 15 to 90 days past due represented 7% of the portfolio, unchanged from both the previous quarter and a year earlier. The company has been marginally more cautious in riskier Brazilian segments but continues to find opportunities to grow, he said.

“We will always prioritize risk management over growth,” Giménez said, adding that marketplace data helps the company assess borrowers and adjust lending by product, risk cohort, credit-line size and duration.

Giménez said participation in Brazil’s Desenrola debt-renegotiation program and a separate discount campaign had a positive but small effect relative to MercadoLibre’s $19 billion credit portfolio. He also said changes in the lending margin metric discussed on the call were mostly related to credit cards growing faster than other lending products, rather than deterioration in merchant or consumer loans.

AI and faster delivery investments

MercadoLibre increased its artificial intelligence investment by $30 million from the previous quarter, de los Santos said. He pointed to improved engagement with Mago, an AI agent on the fintech platform, and said incremental revenue from higher conversion and click-through rates in search more than compensated for the cost of the models used there.

Szarfsztejn said the company has decided not to provide its inventory to external platforms for agentic shopping for now. Instead, it is prioritizing an experience within MercadoLibre. Its own shopping agent is available to a small portion of users in its three largest markets, he said, describing early results as promising but too early to share.

On quick commerce, Szarfsztejn said MercadoLibre is testing Envios Agora using existing marketplace, payments and delivery capabilities without committing to additional infrastructure. He said the company has not announced a sharp increase in investment for the initiative and believes the business could eventually add to margins.

Brazil labor changes

Asked about changes to Brazil’s workweek, Szarfsztejn said MercadoLibre had already reorganized its Brazilian logistics operations in August to a five-day schedule while retaining a 44-hour workweek. He said the company does not expect a material cost impact from that scheduling shift.

The company is preparing for a gradual reduction in working hours, which Szarfsztejn said could require more logistics employees. Scheduling efficiencies, automation and scale could help absorb some of the impact, he said, though it was too early to provide more detail.

About MercadoLibre (NASDAQ:MELI)

MercadoLibre, Inc is a technology company that operates an online commerce and financial services ecosystem across Latin America. Founded in 1999 by Marcos Galperin, the company initially developed an online marketplace and has expanded into a broad platform connecting buyers and sellers with businesses and consumers.

Its commerce operations include the MercadoLibre marketplace, where users can purchase and sell products across numerous categories. The company also offers supporting services such as Mercado Envíos for shipping and logistics, Mercado Ads for digital advertising, and tools for merchants to manage their online businesses.

MercadoLibre's financial technology business is centered on Mercado Pago, which provides digital payment processing, online checkout, money transfer and account services.

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