MercadoLibre (MELI) investor relations material

Executive summary

• Net revenues and financial income rose 50% year-over-year to $10.2 billion for the quarter and 49.4% to $19.0 billion for the six months, driven by strong engagement and ecosystemic user growth, especially in Brazil and Mexico.

• Strategic investments prioritized over short-term profitability, focusing on user engagement, commerce, fintech, AI, and logistics, resulting in margin compression and higher costs.

• Lowering the free shipping threshold in Brazil led to a 19% increase in items per buyer and higher conversion rates, with sustained improvements in user retention and engagement.

• Ecosystemic users, who use both marketplace and fintech services, are significantly more profitable and engaged.

• Net income for the quarter was $466 million (4.6% margin), and for the six months was $883 million, both down year-over-year due to increased investments and credit provisions.

Financial highlights

• Operating income reached $683 million for the quarter (6.7% margin), and $1.29 billion for the six months, both reflecting margin compression from ongoing investments.

• Gross Merchandise Volume (GMV) was $21.9 billion for the quarter and $40.9 billion for the six months, up 44% and 43% year-over-year, respectively.

• Total Payment Volume (TPV) reached $101.0 billion for the quarter and $188.1 billion for the six months, up 56% and 53% year-over-year, respectively.

• Adjusted free cash flow was $214 million for the quarter, after $441 million in capital expenditures and $2.1 billion invested in credit portfolio growth.

• Gross profit margin was 40.9% for the quarter and 42.2% for the six months, both down year-over-year.

Outlook and guidance

• Continued disciplined investment in technology, logistics, and credit expansion, with a focus on engagement and long-term profitability.

• AI investments expected to further drive productivity and cost efficiency, with positive ROI already observed.

• No specific earnings guidance provided due to market uncertainties; emphasis remains on strategic initiatives and market leadership.