MercadoLibre, Inc.

MercadoLibre said Q2 2026 net revenue surpassed $10 billion for the first time, increasing 50% year on year. Income from operations was $683 million, with an operating margin of 6.7%, down 550 basis points year on year but broadly stable sequentially. Adjusted free cash flow was $214 million, after $441 million of capital expenditure and $2.1 billion invested into credit-book growth. The credit portfolio reached $16.4 billion, up 75% year on year; 15- to 90-day NPL was 7.0% for the total portfolio and 4.6% for credit cards, and NIMAL improved from 18% in Q1 2026 to 21% in Q2 2026. For the next period, management did not give formal revenue or EPS guidance on the call, but said it expects to keep reinvesting in Commerce, fintech, credit and AI while maintaining a disciplined path to profitability.

Ariel Szarfsztejn framed MercadoLibre as building a single commerce-fintech flywheel, not two separate businesses, and said the company is using investments to deepen engagement, loyalty and scale. He highlighted that lowering take rates and free-shipping thresholds has repeatedly improved seller and buyer behavior, and said the company is seeing positive early signs from AI-enabled search, shopping assistants, gamification and agentic commerce. His tone was confident and long-term focused, with repeated emphasis that the ecosystem creates a hard-to-replicate advantage.

Martin de los Santos emphasized that the quarter showed strong growth alongside deliberate margin trade-offs. He cited net revenue above $10 billion, EBIT of $683 million, a 6.7% margin, and adjusted free cash flow of $214 million despite $441 million of capex and $2.1 billion invested in the credit book. He pointed to improved credit profitability, including NIMAL rising to 21% and NPLs near historical lows, while also noting margin pressure from lower take rates in Brazil, higher device costs from chips, a Mexico device restock, and some logistics energy cost inflation. He also said AI spending was about $80 million this quarter and that the business is seeing positive returns through higher conversion, ads and productivity.

Analysts focused on margin compression, Brazil seller growth, credit quality, Mexico headwinds, AI spending and the credit-card ramp. Management said the sequential margin picture was mainly a mix of better credit margins and deliberate reinvestment in Brazil Commerce, plus higher device costs and one-off device restocking in Mexico; they also said some logistics energy-cost increases were partially passed through. On credit, they said they do not see deterioration in Brazil, described 15- to 90-day NPLs as near lows, and explained that older 90-day delinquency movements were affected by portfolio mix and issuance pacing rather than a broad weakening. On AI and new initiatives, they said usage and ROI are positive so far but many products remain in testing or early rollout.