This article first appeared on GuruFocus .
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Net Revenue & Financial Income:Up 41% year on year on an FX-neutral basis; growth broad-based across businesses and countries, with Brazil the fastest-growing.
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Brazil GMV:Grew 36% year on year.
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Items per Buyer:Up 16% year on year in Q3 '26, versus single-digit growth before the free shipping threshold was lowered.
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Fintech Monthly Active Users:Grew 29%.
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Assets Under Management:Grew 67%.
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Credit Portfolio:Grew 62%, with NPLs stable despite a weaker credit environment in Brazil and Argentina.
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Income from Operations:$676 million, with a 6.3% margin, down 40 basis points from last quarter.
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Shipping Costs:Net headwind of approximately 60 basis points versus last quarter, driven by the lower free shipping threshold, ~20% quarter-on-quarter fulfillment square meter expansion, higher energy prices, and temporary recruitment costs.
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Brazil Cost per Shipment:Declined 5% year on year on an FX-neutral basis and 14% since before the free shipping threshold was lowered.
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Sales & Marketing:Rose 40 basis points sequentially to 11.6% of net revenue.
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Affiliate Channel Orders:Grew 240% year on year; affiliate network now exceeds 12 million affiliates across the region.
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net revenue and financial income grew 41% year on year on an FX-neutral basis, with broad-based growth across businesses and countries.
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Commerce in Brazil remains strong with GMV growth of 36% year on year, and items per buyer grew 16% year on year, indicating increased shopping frequency.
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Fintech delivered strong profitability with monthly active users up 29%, assets under management up 67%, and credit portfolio up 62%, while NPLs remained stable.
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Logistics network efficiency improved, with cost per shipment in Brazil declining 5% year on year on an FX-neutral basis and 14% since lowering the free shipping threshold.
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Advertising grew 58% year on year, acquiring business grew 42%, and credit portfolio grew 62%, providing profits to reinvest in other areas of the ecosystem.
Negative Points
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Income from operations margin compressed by 40 basis points sequentially to 6.3%, driven by higher net shipping costs and increased sales and marketing spending.
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Shipping costs were a net headwind of approximately 60 basis points versus last quarter due to lower free shipping threshold, capacity expansion, higher energy prices, and temporary recruitment costs.
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Sales and marketing expenses rose 40 basis points sequentially to 11.6% of net revenue, reflecting increased investment in the affiliate program in Brazil.
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Credit portfolio growth may face pressure from a weaker credit environment in Brazil and Argentina, requiring caution in riskier segments.
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The company expects continued investment in areas like affiliates and logistics capacity, which may weigh on margins in the near term.
Q & A Highlights
Q: Craig Moore, FT Partners Which of the margin headwinds this quarter (shipping, affiliates) will reverse, and which will stay in the model until you grow over them? A: CFO Martin de los Santos broke down the ~60 bps shipping compression: 40 bps in COGS and 20 bps in OpEx, driven mostly by a 20% quarter-on-quarter expansion of fulfillment capacity ahead of peak (versus 10% a year ago). He expects part of that to come back in Q4, while higher fuel and energy costs will largely remain. The 40 bps step-up in affiliate spend is an area of continued investment, though sales and marketing remains within its historical 11%12% of revenue range.
Q: Josh Beck, Raymond James Is AI a positive contributor to profit today, and how do you view agentic shopping and third-party AI agents? A: CFO Martin de los Santos said AI investment rose $30 million sequentially, with clear returns: the LLM-enhanced search algorithm generates incremental conversion and click-through that more than offset model costs, and product development scaled 70 bps year on year despite ~$100 million of incremental AI spend. CEO Ariel Szarfsztejn added that MELI has decided not to open its inventory to external agentic platforms, prioritizing its own agentalready live with a small user base in its three largest marketsleveraging 27 years of first-party data.
Q: Marcelo Santos, JPMorgan With credit conditions deteriorating in Brazil, do you need to tap the brakes on lending? A: Management said "so far so good": the 50%90% NPL ratio held stable at 7% both sequentially and year on year while the portfolio grew 62%. The team has been more cautious in the riskiest segments in Brazil, while Argentina NPLs improved across all products to near historical lows. Marketplace data on how users buy, pay and use installments gives MELI an underwriting edge, and management reiterated it will always prioritize risk management over growth.
Q: Andrew Ruben, Morgan Stanley How big is the social commerce opportunity, and is the Brazil affiliate investment tactical or structural? A: CEO Ariel Szarfsztejn said MELI must be where consumer attention is, with affiliates part of a broader social playbook that also includes live commerce, clips and video in the app. Organic traffic driven by price, selection, shipping and financing should remain the majority of e-commerce volume, but MELI's combination of social capabilities and ecosystem assets gives it a unique edge. CFO Martin de los Santos clarified that only the intensity was tactical this quarterthe affiliate program now has 12 million members and is a strategic, ongoing investment.
Q: Irma Sgarz, Goldman Sachs Are there new large investment buckets ahead, and how are you approaching quick commerce in Brazil? A: CFO Martin de los Santos said investment areas will stay largely the same, funded by fast-growing profit enginesadvertising up 58%, credit up 62% and acquiring up 42% year on yearwith no specific short-term margin target. The recent Argentina free-shipping expansion is the main new initiative. On quick commerce, CEO Ariel Szarfsztejn said the Envios Agora pilot leverages existing assets (Flex, marketplace, Mercado Pago, Mercado Envios) without incremental infrastructure and could be margin-accretive, with no steep change in investment planned.
Q: Kaio Prato, UBS Are you slowing credit growth in Brazil, and could lower Argentine rates pressure NIMAL further? A: Management confirmed only marginal caution in riskier Brazilian segments, with risk management always ahead of growth. The impact of Brazil's debt renegotiation program (Serasa Limpa Nome) was positive but small relative to the $19 billion portfolio. On Argentina, lower rates have been passed through to customers without compressing spreads, which remain very healthy; the NIMAL change mainly reflects mix, as credit cards grow faster than merchant and consumer loans.
Q: Deepak Mathivanan, Cantor Fitzgerald Do Brazil's elections change strategic priorities, and how is loyalty progressing? A: CEO Ariel Szarfsztejn said the elections do not materially change MELI's futureacross 27 years and many governments, secular commerce and fintech opportunities have outlasted political cycles, and focus remains unchanged. CFO Martin de los Santos said loyalty enrollment is accelerating after value-prop improvements in Brazil and Argentina, with the key advantage being ecosystem benefits on both sides (shipping, deposit yields, loan rates, marketplace offers). "Ecosystemic" users are more engaged and more profitable.
Q: Neha Agarwala, HSBC What is driving acquiring take-rate compression, and are you more comfortable with merchant versus consumer lending? A: Management attributed last quarter's pressure to POS device restocking and higher memory costs, an effect that reversed this quarter as inventory building stopped, though device cost pressure persists. Acquiring is growing 42% year on year with healthy margins, and take-rate shifts reflect mix as the business moves upmarket. On lending, management is equally comfortable with merchant and consumer credit, noting POS merchants can switch providers, making scoring as critical as it is for consumers.
Q: Pedro Pinto, Bradesco What is the impact of Brazil's new 5-2 workweek on logistics costs? A: CEO Ariel Szarfsztejn said MELI proactively moved its Brazilian logistics operation to a 5-2 schedule in August with the same 44 weekly hours, better matching demand and reducing idle time, transport and meal costs, so no material cost impact is expected from that shift. The gradual reduction to a 40-hour week will require more logistics employees, partly absorbed by scheduling efficiencies and natural turnover. Automation investment has tripled in volume terms across Brazil and Mexico.
Q: Lucas (Santander) Can Argentina's structurally higher margins hold as competition and cross-border normalize, and how fast will the new fulfillment capacity fill? A: CEO Ariel Szarfsztejn declined to guide on margin trajectory but said MELI holds a unique position in Argentina, with Mercado Pago as the primary financial institution for many and high e-commerce share; Asian competitors gained share late last year but the situation has stabilized. CFO Martin de los Santos said the 20% capacity increase serves both peak season and future growthBrazil items shipped have grown north of 40% for five straight quarterswith capacity
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
