MercadoLibre Q2 Earnings Call Highlights

MercadoLibre Q2 Earnings Call Highlights

Revenue surpassed $10 billion in Q2 2026, rising 50% year over year, while operating margin fell to 6.7% as MercadoLibre prioritized investments in commerce, fintech, logistics and AI over near-term profitability. The portfolio expanded 75% to $16.4 billion, while nonperforming-loan ratios stayed near historical lows and net interest margin after losses improved to 21%. Advertising revenue grew more than 70%, cross-border GMV rose about 60%, and management said AI improved marketplace conversion, customer service efficiency and developer productivity.

MercadoLibre NASDAQ: MELI reported second-quarter 2026 net revenue of more than $10 billion for the first time, representing 50% year-over-year growth, while the company continued to emphasize investments in commerce, fintech, logistics and artificial intelligence over near-term margin expansion. Income from operations totaled $683 million, producing a 6.7% operating margin that was broadly stable sequentially but down 550 basis points from a year earlier. Chief Financial Officer Martin de los Santos said the margin performance reflected a deliberate decision to reinvest profits into initiatives intended to increase user engagement, growth and long-term scale.

Adjusted free cash flow was $214 million during the quarter, despite $441 million in capital expenditures and $2.1 billion invested in growing the company’s credit portfolio, de los Santos said.

Management highlighted the effects of its decision one year earlier to lower the free-shipping threshold in Brazil. De los Santos said items per buyer in Brazil increased 19% year over year in the second quarter, even as the company added new buyers who tend to purchase less initially. Conversion increased by 1.1 percentage points from a year earlier, while daily active users continued to grow faster than monthly active users. The company said buyers acquired after the threshold change were purchasing more items across more categories and showing better retention than earlier cohorts. De los Santos characterized the trend as a change in consumer behavior rather than simply an expansion in the number of users. In response to questions about future Brazil investments, CEO Ariel Szarfsztejn said MercadoLibre does not make investment decisions to manage comparisons with prior-year growth rates. Rather, the company intends to pursue initiatives it believes improve the consumer value proposition and strengthen its market position. Management also discussed lower seller take rates in certain Brazil categories and discounts for customers who pay with Pix. Szarfsztejn said lower take rates have historically accelerated the growth of successful sellers on the platform. He said there was no material margin effect specifically tied to the influx of new sellers.

MercadoLibre’s credit portfolio reached $16.4 billion, up 75% year over year. The company reported a 50-90 day nonperforming loan ratio of 7.0% for the total portfolio and 4.6% for credit cards, both near historical lows, according to de los Santos. Net interest margin after losses, or NIMAL, rose to 21% in the second quarter from 18% in the first quarter. Management attributed the improvement partly to normalized provisions in Brazil’s consumer portfolio following a first-quarter spike. De los Santos said the company’s move toward lower-risk consumer and merchant borrowers, as w...