Key Highlights
- Shares of MELI declined more than 7% during after-hours trading following disappointing first-quarter earnings results
- Adjusted earnings per share reached $8.23, falling $1.14 short of the Street’s $9.37 forecast
- Top-line results exceeded expectations with revenue climbing 49% from the prior year to $8.85 billion, surpassing projections by $530 million
- The company achieved 32% year-over-year unique buyer expansion in Brazil — marking the strongest performance in half a decade
- Credit portfolio ballooned 87% year-over-year to reach $14.6 billion, representing the most significant quarterly expansion on record
Shares of MercadoLibre (MELI) tumbled over 7% during extended trading hours Thursday following first-quarter 2026 results that disappointed on the bottom line, even as the Latin American e-commerce leader delivered its strongest top-line performance in nearly four years.
The decline came after the stock had advanced 1.6% during Thursday’s regular trading session.
The company announced adjusted earnings per share of $8.23, undershooting Wall Street’s consensus estimate of $9.37 by $1.14. This represented a decline from the prior year’s $9.74 per share result.
Top-line performance proved more encouraging, with quarterly revenue hitting $8.85 billion — representing 49% year-over-year expansion and exceeding the Street’s $8.29 billion projection by $530 million. The growth rate marked the strongest revenue acceleration since the second quarter of 2022.
Gross merchandise volume expanded 42% year-over-year throughout the platform. Mexico demonstrated robust 48% growth, while Brazil delivered an even stronger 54% increase. Total payment volume advanced 50% to reach $87.2 billion.
Bottom-line results showed net income of $417 million, translating to a 4.7% profit margin. Operating income registered $611 million, representing a 6.9% operating margin. The company generated negative free cash flow of $56 million, comparable to the same period last year.
MercadoLibre attributed much of its success to the strategic decision to reduce Brazil’s free shipping threshold. This initiative drove unique buyer growth of 32% year-over-year in Brazil — the strongest expansion in five years. Item sales exploded 56% year-over-year, significantly outpacing the 26% increase seen in Q2 2025 prior to implementing the threshold adjustment.
When adjusted for foreign exchange fluctuations, Brazil’s GMV expanded 38% year-over-year.
Financial Technology Segment Demonstrates Robust Momentum
The company’s fintech operations maintained strong expansion momentum. Monthly active users climbed to 83 million, representing 29% year-over-year growth.
The credit portfolio experienced dramatic 87% year-over-year expansion to $14.6 billion — marking the largest quarterly nominal increase the company has recorded. Assets under management surged 77% year-over-year to approach $20 billion.
Commerce segment revenue achieved $5 billion, advancing 47% year-over-year. The fintech division generated $4 billion in revenue, posting 51% year-over-year growth.
Advertising revenue demonstrated exceptional 73% year-over-year growth in U.S. dollar terms. MercadoLibre highlighted that its Mercado Ads platform has emerged as the region’s fastest-expanding advertising business.
Artificial Intelligence Powers Enhanced Search Capabilities
During the first quarter of 2026, MercadoLibre launched its inaugural AI-powered search functionality, completely reconstructing its search infrastructure around large language model technology.
According to the company, transitioning away from traditional keyword-based search methodologies enhanced product relevance throughout Brazil and Mexico, driving improved conversion metrics and stronger click-through performance for sponsored product listings — both generating incremental revenue streams.
Chief Financial Officer Martín de los Santos characterized Q1 2026 as “another exceptional quarter,” emphasizing the company’s commitment to investing in transformative solutions that reshape how hundreds of millions of consumers across Latin America engage in commerce, execute payments, and obtain financial services.
MercadoLibre emphasized that twenty-six years following its inception, the platform continues achieving startup-level growth rates throughout its principal 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 emerged as the principal catalyst for the extended-hours selloff, despite revenue outperformance and generally robust operational performance indicators.
