Key Highlights
- Shares of MELI declined over 7% in extended trading following a first-quarter earnings disappointment
- The company posted earnings per share of $8.23, falling $1.14 below the Street’s $9.37 expectation
- Quarterly revenue climbed 49% from the prior year to reach $8.85 billion, exceeding projections by $530 million
- Unique buyer growth in Brazil accelerated to 32% YoY — marking the strongest expansion in half a decade
- The lending portfolio expanded 87% YoY to reach $14.6 billion, representing the biggest quarterly gain on record
Shares of MercadoLibre (MELI) tumbled more than 7% during after-hours trading Thursday following the release of first-quarter 2026 results that failed to meet profit expectations, even as the Latin American e-commerce giant delivered its strongest sales performance in close to four years.
The stock had climbed 1.6% during normal market hours prior to the earnings announcement.
The company disclosed adjusted earnings per share of $8.23 for the quarter, undershooting analyst forecasts of $9.37 by $1.14. The result also trailed the previous year’s figure of $9.74.
Quarterly sales reached $8.85 billion, representing a 49% year-over-year advance and surpassing the Street’s $8.29 billion projection by $530 million. The growth rate marked the company’s strongest topline performance since the second quarter of 2022.
Gross merchandise volume across the platform increased 42% compared to the same period last year. Mexico experienced a 48% surge, while Brazil recorded a 54% gain. Overall payment volume advanced 50% to hit $87.2 billion.
Net profit totaled $417 million for the quarter, translating to a 4.7% margin. Operating income registered $611 million, representing a 6.9% operating margin. The company generated negative free cash flow of $56 million, largely consistent with the first quarter of the prior year.
MercadoLibre attributed much of its momentum to a strategic decision to reduce the free shipping threshold in its Brazilian operations. The move contributed to unique buyer growth of 32% year-over-year in Brazil — the fastest rate recorded in five years. Items sold jumped 56% YoY, significantly outpacing the 26% growth seen in Q2 2025 before the threshold adjustment took effect.
On a constant-currency basis, Brazil’s GMV expanded 38% year-over-year.
Financial Services Segment Maintains Strong Momentum
The company’s fintech operations continued their robust trajectory. Monthly active users reached 83 million, representing a 29% year-over-year increase.
The credit portfolio expanded 87% YoY to $14.6 billion — marking the largest quarterly increase measured in absolute dollar terms. Assets under management climbed 77% YoY to approach $20 billion.
Commerce segment revenue hit $5 billion, advancing 47% YoY. Fintech revenue reached $4 billion, growing 51% YoY.
Advertising revenue surged 73% YoY in dollar terms. MercadoLibre highlighted that its Mercado Ads platform has become the region’s fastest-expanding advertising business.
Company Deploys AI Technology in Search Function
During the first quarter of 2026, MercadoLibre launched its inaugural AI-powered search capability, fundamentally redesigning its entire search infrastructure around large language model technology.
The company indicated that moving beyond traditional keyword-based search enhanced product relevance for users in Brazil and Mexico, resulting in improved conversion metrics and stronger click-through performance for paid listings — both contributing to incremental revenue generation.
CFO Martín de los Santos described Q1 2026 as “another exceptional quarter,” emphasizing the company’s continued investment in revolutionizing how hundreds of millions of consumers across Latin America shop, make payments, and obtain financial services.
MercadoLibre emphasized that twenty-six years since its founding, the company continues to deliver growth rates comparable to early-stage startups throughout its core markets. “Nowhere is this more evident than in Brazil, our largest and most established market, where growth is not just fast — it is accelerating,” management stated.
The $1.14 earnings per share shortfall relative to analyst expectations triggered the after-hours decline, despite the company’s revenue outperformance and generally solid operational performance across key metrics.
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