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.
Brazil engagement and commerce investments
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.
Credit growth and asset quality
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 well as its focus on lower-risk credit card users, supported credit quality.
President of Fintech Osvaldo Gimenez said the company has not seen deterioration in Brazil’s credit book, with NPL levels roughly in line with or better than a year earlier. He said MercadoLibre has previously responded to weaker credit conditions by reducing available credit lines or tightening issuance, and management believes its underwriting models have improved.
Gimenez acknowledged that the 90-day-plus delinquency measure can move with origination pace and product mix. He said some early-year borrowers in one product defaulted slightly more than expected, prompting the company to slow issuance in that product, but said the trend was not a major concern.
Credit card issuance continued to accelerate. In Brazil, MercadoLibre issued 2.6 million cards in the quarter, compared with 1.6 million cards a year earlier. Gimenez said credit card cohorts generally reach NIMAL breakeven within 12 to 18 months, although faster issuance has lowered the average maturity of the portfolio and pressured aggregate card profitability in the near term.
In Argentina, where MercadoLibre began issuing cards about three quarters ago, Gimenez said demand and usage have been strong and repayment trends have met expectations. He added that the company has been able to select lower-risk users from its large Mercado Pago customer base.
Margin pressures and reinvestment
De los Santos said sequential operating margins benefited from stronger credit profitability and operating-cost leverage in Brazil, where operating expenses declined by 2.5 percentage points as a share of revenue from the prior quarter. Those gains were offset by investments in commerce and pressure in the acquiring business.
Acquiring margins were affected by higher industry chip costs for point-of-sale devices and a one-time charge associated with restocking a significant volume of devices in Mexico. MercadoLibre sells the devices at a loss and recognizes that loss when inventory is purchased, management said. Gimenez added that the company did not raise device prices because payback periods remained in line with expectations and competitors had not increased prices.
The company also absorbed some higher logistics costs related to energy, while passing some of those costs through to users. De los Santos described the related margin compression as slight.
Management said its investment philosophy remains unchanged: MercadoLibre will continue to fund initiatives where it sees engagement and growth targets, along with a clear path to profitability.
AI, advertising and cross-border commerce
MercadoLibre spent about $80 million more on AI during the quarter than it did a year earlier, de los Santos said. The company is using AI in search, advertising, customer service and software development. Management said AI-enhanced search has improved marketplace conversion, items sold and advertising performance by providing better context for selecting and displaying ads.
Advertising revenue grew more than 70% year over year, aided by an AI-powered advertising tool whose usage increased 66%, according to de los Santos. The company said AI-supported customer service has reduced its customer-service workforce to about 7,000 representatives from 10,000 four years ago, despite the business growing threefold over that period.
Management said its roughly 20,000 developers are using AI tools and that AI-generated code now represents the majority of code produced. Szarfsztejn cautioned that product-development efficiency gains were not solely attributable to AI, but said the technology is improving productivity and helping MercadoLibre avoid expanding its engineering team in 2026.
On cross-border trade, Szarfsztejn said cross-border GMV increased about 60% year over year, with triple-digit growth in Brazil, Argentina and other markets. Volume from the company’s China fulfillment center grew 170% sequentially. He said the facility has improved delivery times and reduced cancellations while cross-border unit economics have improved over several quarters through greater scale and operational learning.
Management reiterated that its central strategy is to deepen connections between MercadoLibre’s marketplace and Mercado Pago. The company said customers who use both businesses generate more marketplace GMV, more payment volume and higher profitability than users of either service alone.
About MercadoLibre (NASDAQ:MELI)
MercadoLibre, Inc operates an integrated e-commerce and fintech ecosystem serving consumers and businesses across Latin America. The company provides an online marketplace that connects buyers and sellers for a wide range of goods and services, supported by tools for merchants, advertising, and classifieds. Over time MercadoLibre has expanded beyond its marketplace roots into complementary areas that support digital commerce end to end.
Key offerings include its marketplace platform and a suite of logistics and payment services.
