MercadoLibre Q2 Earnings Call Focuses on Engagement Over Margin

MELI Keeps Investment Ahead of Margin

MELI reported second-quarter earnings of $9.19 per share, beating the Zacks Consensus Estimate of $8.69. Revenues of $10.17 billion also topped the $9.77 billion consensus.

CFO Martin de los Santos said the 6.7% operating margin was broadly stable sequentially but down 550 basis points year over year. He tied the decline to investments in shipping, selection, cards, cross-border trade and MELI+.

A Goldman Sachs analyst pressed on costs. Santos said stronger credit profitability offset lower Brazil take rates, PIX discounts, chip costs, Mexico device restocking and a modest logistics drag from energy costs.

MercadoLibre Sees Brazil Behavior Shift

Brazil’s lower free-shipping threshold produced durable behavioral change one year after implementation. Items per buyer rose 19%, conversion improved 1.1 percentage points and daily active users kept outgrowing monthly active users.

CEO and president Ariel Szarfsztejn said lower seller take rates accelerated successful seller growth without creating a material additional margin burden from the new seller mix.

CFO Santos and CEO Szarfsztejn said tougher comparisons will not determine future spending. Investments will depend on engagement, market position and a clear profitability path, not preserving a specific growth rate.

MELI Holds Firm on Credit Quality

Fintech president Osvaldo Giménez said the credit portfolio reached $16.4 billion, up 75% year over year. The 15-to-90-day nonperforming loan ratio was 7.0% overall and 4.6% for cards, both near historical lows.

An Itaú BBA analyst asked about Brazil credit risk. Giménez said MELI was not seeing deterioration and would reduce available lines or limits if conditions changed, as it has done in prior adverse cycles.

Giménez also added that mature Brazilian card cohorts typically reach NIMAL breakeven within 12 to 18 months. Faster issuance is slowing average portfolio maturation, while early paybacks in Mexico are better than in Brazil.

MercadoLibre Treats AI as an Operating Lever

Szarfsztejn said AI-enhanced search is improving conversion, item sales and advertising click-through rates. The system covers the five largest markets, and incremental commerce and ad revenues more than offset third-party model costs.

The CFO said 20,000 developers use AI and human-written code has become the exception. Code submissions rose 90% year over year, while product development expense declined as a share of revenues.

CEO Szarfsztejn called AI an accelerator for personalized discovery, smoother transactions and better underwriting. He also said 2026 is the first year in many years that the engineering team is not growing.

MELI Extends the Ecosystem Flywheel

Santos said users active in both Marketplace and Mercado Pago grew 37% year over year. They generate 70% more GMV, nearly 90% more payment volume and double the assets under management of single-platform users.

Santos did not disclose their share of total users but emphasized their strategic value. He said card users are two to three times more likely to become ecosystemic, strengthening commerce and financial engagement.

Szarfsztejn highlighted cross-border trade as another driver. Cross-border GMV rose about 60%, China fulfillment-center volume increased 170% sequentially, and unit economics kept improving.

MercadoLibre Balances Growth and Headwinds

The CFO acknowledged that Mexico commerce faced tax reform, weaker macro conditions and lower World Cup consumption. Management said the business still gained market share and retained a long-term opportunity.

Executives linked investment intensity to engagement gains, improving unit economics and defined profitability paths. Near-term margin expansion remains secondary to building the commerce-fintech ecosystem.

MELI's Zacks Rank & Style Scores

MELI currently carries a Zacks Rank #2 (Buy). Its Growth Score of A, Value Score of B and VGM Score of B fit the favorable A-or-B grades designed to complement top Zacks Rank stocks, while the Momentum Score of D marks a weaker near-term trading characteristic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The mix favors growth and blended style attributes over momentum. The Zacks Rank can change as analysts revise earnings estimates after the just-reported results, so the current signal remains dynamic.

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