By Brasil Stock Guide – Mercado Livre Inc. (MELI) reported a 49% increase in net revenues and financial income in the first quarter of 2026, as growth in its marketplace and Mercado Pago fintech business continued to expand across Latin America, according to the company’s investor presentation released on May 7, 2026.
The company said net revenues and financial income reached $8.8 billion in the quarter, compared with $5.9 billion a year earlier. On a foreign-exchange neutral basis, revenue rose 46%, supported by gains in commerce, fintech services, payments and credit.
Profitability weakened as Mercado Livre increased spending on growth initiatives. Income from operations fell to $611 million from $763 million a year earlier, reducing the operating margin to 6.9% from 12.9%. Net income declined to $417 million from $494 million, while net income margin narrowed to 4.7% from 8.3%.
The company attributed margin compression to investments in long-term growth opportunities. Cost of goods sold, bad debt provisions and sales and marketing expenses were the largest negative contributors to the operating margin decline.
Commerce net revenue rose to $4.9 billion, up 47% in dollar terms and 39% on an FX-neutral basis. Mercado Livre said its third-party take rate was 21.3%, down 10 basis points from a year earlier, reflecting lower shipping revenue and seller fees. Advertising and loyalty subscription revenue helped offset part of the pressure.
Marketplace activity remained strong. Gross merchandise volume reached $19 billion, up 42% year over year and 36% on an FX-neutral basis. Items sold increased 47% to 721.7 million. Unique active buyers rose 26% to 84.1 million, with Brazil driving a record year-over-year increase of 17 million buyers.
The logistics operation also expanded. Same- and next-day shipments rose 39% from a year earlier to 199 million, helped by accelerating volume growth, particularly in Brazil. Items sold per unique active buyer increased 16%, signaling higher engagement among existing customers despite a large influx of new buyers.
Fintech revenue reached $4 billion, up 51% in dollar terms and 54% on an FX-neutral basis. Mercado Livre said fintech monthly active users rose 29% to 82.9 million, supported by engagement and retention across Brazil, Mexico, Argentina and Chile.
Total payment volume climbed to $87.2 billion, up 50% in dollars and 55% on an FX-neutral basis. Acquiring total payment volume reached $56 billion, with FX-neutral growth of 41%, reflecting continued market-share gains and enhancements to the payment offering.
Mercado Livre’s credit portfolio expanded 87% to $14.6 billion, while assets under management rose 77% to $19.9 billion. The company said asset quality remained solid, though net interest margin after losses fell to 17.8%, pressured by a higher mix of lower-spread credit card products and higher provisions in Brazil’s consumer portfolio.
Adjusted free cash flow was negative $56 million in the quarter. Mercado Livre said cash flow is seasonally lower in the first quarter, partly due to payments related to its long-term retention program and peak-season supplier invoices. The company also invested $271 million in capital expenditures and $1.95 billion in loan-book growth, partly offset by $658 million in fintech funding.
Available cash, investments and digital assets totaled $6.6 billion at the end of March, while net debt rose to $5.7 billion. Net debt to adjusted EBITDA increased to 1.46 times, which Mercado Livre said was linked mainly to funding Mercado Pago’s operations, especially credit funding.
Brazil remained the company’s largest market by revenue. Net revenues in the country reached $4.8 billion, including $2.8 billion from commerce and $1.9 billion from fintech. Argentina generated $1.7 billion, Mexico $2 billion and other countries $397 million.
Leave a Reply