MercadoLibre, Inc.
MELI · Nasdaq
Next quarter
Reports Nov 4, 2026.
Consensus is $9.42 EPS for Sep 2026 across 3 estimates, ranging $8.88 to $9.91.
MELI Jun 2026
- 5.75%
- -4.81%
- $8.69
- $9.19
- —
- $7.05B
Reported results
- $7.05B
- 58.95%
- $683.00M
- 9.68%
- $466.00M
- $9.19
Highlights
- Growth: Q2 net revenues and financial income rose 50% year over year to $10.17 billion, or 43% on an FX-neutral basis, while TPV increased 56% to $101.0 billion and GMV grew 44% to $21.9 billion.
- Earnings: Diluted EPS was $9.19, 5.75% above the $8.69 consensus; net income was $466 million versus $523 million a year ago and $417 million in Q1.
- Reinvestment: Operating income fell 17% year over year to $683 million, and operating margin declined to 6.7% from 12.2% a year ago, as MercadoLibre funded shipping, pricing, seller acquisition and acquiring investments.
- Engagement: Ecosystemic users grew 37% year over year, faster than commerce buyers at 26% and fintech MAUs at 30%; items per buyer rose 14%, while users purchasing three or more categories increased their share by nearly 6 percentage points.
- Brazil commerce: FX-neutral GMV grew 39% and items sold rose 56% after the lower free-shipping threshold; active sellers increased 29%, and conversion improved 1.1 percentage points year over year.
- Fintech scale: Fintech MAUs reached 88 million, AUM rose 68% to $23 billion and the credit portfolio grew 75% to more than $16 billion; consolidated NIMAL improved 3 percentage points sequentially to 20.7%.
- Credit risk: Credit-card NIMAL was negative 2.5% as new issuance accelerated to 2.6 million cards from 1.6 million a year earlier, but 15-90 day NPL was 4.6% for cards and 7.0% for the total portfolio.
- Cash and funding: Q2 adjusted free cash flow was $214 million despite $441 million of capex and $2.1 billion invested in credit expansion; net debt rose to $6.43 billion from $4.68 billion at year-end.
Analysis
MercadoLibre’s Q2 FY2026 was a high-growth, lower-margin quarter that exceeded the $8.69 EPS consensus, with diluted EPS of $9.19. Net revenues and financial income reached $10.17 billion, up 50% from $6.79 billion a year ago and 15% sequentially from $8.85 billion in Q1. Operating income was $683 million, down from $825 million a year ago but up from $611 million in Q1, leaving the operating margin broadly stable sequentially at 6.7%. Net income fell 11% year over year to $466 million, partly helped by foreign-currency losses of $45 million versus $117 million a year earlier.
The defining feature was deliberate reinvestment behind the commerce-fintech flywheel. GMV and TPV expanded 44% and 56%, respectively, while ecosystemic users grew 37% and engagement reached records across commerce and fintech. Brazil remained the principal growth engine, with FX-neutral GMV up 39% after the free-shipping threshold change. Fintech also scaled rapidly, including a 75% increase in credit exposure, but provisions rose 85% year over year to $1.28 billion in the quarter and the credit-card book remained dilutive as issuance accelerated. Gross-margin pressure from shipping, Brazilian pricing initiatives and acquiring investments offset operating-expense leverage, keeping profitability below the year-ago level.
Growth and profitability
The quarter combined accelerating scale with materially lower reported profitability. Net revenues and financial income increased 49.8% to $10.17 billion, while FX-neutral growth was 42.9%. Commerce revenue grew 50% to $5.76 billion and fintech revenue rose 49% to $4.41 billion. Cost of revenues increased 62.6% to $6.01 billion, compressing gross margin to 40.9% from 45.6% a year earlier. Operating income was $683 million, a 6.7% margin versus $825 million and 12.2% in Q2 FY2025.
- Brazil generated $5.53 billion of revenue, up 59% in reported dollars and 42% FX-neutral; Mexico reached $2.34 billion, up 55% in dollars and 38% FX-neutral.
- Argentina revenue rose 20% in dollars and 48% FX-neutral, but growth slowed against a difficult consumption backdrop.
- Sequentially, the 6.7% operating margin was close to Q1’s 6.9%; lower operating expenses as a percentage of revenue largely offset a 2.8-point gross-margin decline.
Ecosystem engagement
Management centered the quarter on the interaction between marketplace and fintech usage rather than on transaction growth alone. Ecosystemic users, who use both sides of the platform, grew 37% year over year and represented an expanding share of the user base. The company argues that this group is economically more valuable because engagement and contribution profit compound when commerce and financial services are combined.
- Unique commerce buyers grew 26% year over year to 117 million for the first half, while fintech MAUs reached 88 million, up from 68 million a year earlier.
- Ecosystemic users generated 70% more GMV and 55% more items sold per user than marketplace-only users in Q2.
- Among ecosystemic users, TPV per user was almost 90% higher than for fintech-only users, AUM per user was more than twice as high and insurtech policies per user were almost four times higher.
- MELI+ subscribers increased 72% year over year, while AUM per user rose 29% to $264.
Brazil commerce investments
Brazil was the clearest evidence that MercadoLibre is prioritizing demand, supply and engagement ahead of near-term margin. Twelve months after lowering the free-shipping threshold, the company reported sustained conversion and frequency gains rather than a one-time promotional lift.
- FX-neutral Brazil GMV grew 39% and items sold increased 56%; items per buyer rose 19% in the country.
- Conversion improved 1.1 percentage points year over year, while the share of users buying three or more categories rose 10 percentage points over the period since the threshold change.
- Free and slow shipments had become variable contribution-positive across half of the average-selling-price range from R$19 to R$79.
- PIX buyer discounts and conditional seller take-rate discounts improved price competitiveness, helping active sellers grow 29% year over year.
- Cross-border GMV rose 60% FX-neutral, and volume through the China fulfillment center increased 170% sequentially.
Fintech and credit
Fintech continued to be a major growth and profit contributor, although the pace of credit expansion raised provisions and diluted credit-card economics. The company is issuing cards aggressively because cardholders are two to three times more likely to remain ecosystemic, while maintaining that underwriting and asset quality remain controlled.
- AUM reached $23 billion, up 68% year over year, and the credit portfolio surpassed $16 billion, up 75%.
- Consolidated NIMAL improved 3 percentage points sequentially as Brazil consumer-credit provisions normalized, but fell 2 points year over year to 20.7% because credit cards represented 47% of the portfolio versus 43% a year earlier.
- Credit-card NIMAL declined to negative 2.5% from breakeven in Q2 FY2025 as 2.6 million new cards were issued, compared with 1.6 million a year earlier.
- The total 15-90 day NPL ratio was 7.0%, while the credit-card ratio was 4.6%, both near historic lows according to management.
- Provision for doubtful accounts rose 85% year over year to $1.28 billion in Q2, primarily reflecting originations that grew roughly 83%.
Acquiring, AI and cash
Acquiring remained a growth investment, particularly in Mexico, while AI productivity began to offset some technology-cost pressure. The resulting cash profile reflects the funding needs of a rapidly expanding credit business rather than a lack of operating cash generation.
- FX-neutral acquiring TPV grew 42%; Mexico acquiring TPV rose 47%, with in-store volume up almost 70% and 1.4 million active devices deployed.
- Mexico’s direct-contribution margin compressed about 4 percentage points sequentially because of upfront customer-acquisition spending, higher device costs and commercial initiatives supporting demand.
- AI investment increased approximately $80 million year over year in Q2, but product-development expense declined to 7.2% of revenue from 8.4% as code submissions rose 110% and deployments nearly 75%.
- Six-month operating cash flow was $5.74 billion versus $3.95 billion a year earlier, but adjusted free cash flow was $158 million as loans receivable absorbed $4.07 billion and capex reached $712 million.
- At June 30, total debt including leases was $13.18 billion, versus $11.39 billion at December 31, while net debt increased to $6.43 billion.
