MercadoLibre (MELI), Financial Analysis

1 Revenue & Business Model

• Storyline: net revenues and financial income grow 45% in Q3 2026 as items sold, the credit book and advertising expand, while free shipping in Brazil, credit card provisions and fulfillment capacity take operating margin from 9.8% to 6.3%. Chapters 2 to 4 cover the three revenue drivers: Commerce; Mercado Pago and the credit book; Advertising.
• Business model: Commerce earns marketplace fees, shipping fees, first party product sales, advertising, classifieds and MELI+ subscriptions ($6.14bn in Q3 2026, 57.1% of revenue). Fintech (Mercado Pago) earns payment fees, interest and fees on credit, and interest on Mercado Pago cash and investments ($4.61bn, 42.9%). Ecommerce operates in 18 countries and Mercado Pago in eight (10-K FY2025).
• Revenue FY2022 $10.78bn to FY2025 $28.89bn, a 38.9% CAGR; TTM Q3 2026 $38.52bn. FY2021 figures in this report use the presentation before financial income on Mercado Pago cash and investments moved into revenue (FY2024 10-K, applied from FY2022), so FY2021 to FY2022 changes are not like for like.
• Revenue by country: Brazil $15.20bn (52.6%) in FY2025, Mexico $6.48bn, Argentina $5.96bn and other countries $1.26bn. The four countries are the reportable segments; Argentina has been treated as highly inflationary since Jul 2018.
• Scale: 94m unique active buyers and 93m fintech monthly active users in Q3 2026; more than 123,000 employees at FY2025 end (10-K FY2025). Ariel Szarfsztejn became CEO on 1 Jan 2026; founder Marcos Galperin is Executive Chairman.

2 Commerce: GMV $22.8bn, Items Sold Up 37% and Fulfillment Costs

• Commerce revenue $6.14bn in Q3 2026, +47.1%: commerce services $4.61bn, +41.6%, and first party product sales $1.53bn, +66.8%.
• GMV $22.8bn, +37.9% in US dollars and +33% FX neutral, after +36% in each of Q1 and Q2 2026; items sold 867m, +36.5%; unique active buyers 94m against 77m.
• By country (FX neutral GMV, items sold): Brazil +36% and +45%; Mexico +21% and +25%, after +35% GMV growth in Q4 2025, with the 2026 tax reform and weaker consumption cited; Argentina +40% and +19%.
• Logistics: Brazil cost per shipment (5%) year on year in local currency; net shipping margin about 200 basis points of GMV lower than in Q1 2025 after the lower free shipping threshold in Brazil from Jun 2025; fulfillment space almost 20% larger than in Q2 2026 (Q3 2026 letter).
• Engagement: buyers make 12 purchases a year on the platform against more than 50 online purchases for consumers in developed markets (Q3 2026 letter); MELI+ subscribers +72% and items per buyer +14% in Q2 2026 (Q2 2026 letter).

How Latin American ecommerce is changing

• Penetration: ecommerce penetration in Latin America is about half the level of the US, UK and China (Q4 2025 letter) and is rising at the fastest pace since 2020, twice the 2019 pace in points added a year (Q3 2026 letter).
• Asian entrants: MercadoLibre's FY2025 10-K adds that Asian ecommerce platforms gained a large share of Latin American ecommerce in 2025 through low prices, direct from manufacturer supply and cross border logistics. Sea reports Shopee among the leading ecommerce platforms in Brazil (Sea 6-K, 11 Aug 2026).
• Cross border trade: about a $10bn market into Latin America; MercadoLibre opened its first fulfillment center in China in Dec 2025, and cross border GMV grew 74% FX neutral in Q4 2025 and 60% in Q2 2026 (letters).
• Regulation: Mexico's antitrust authority closed its ecommerce proceeding in Aug 2025, after flagging Buy Box algorithms and logistics integration at Amazon Mexico and Mercado Libre, with no measures imposed (10-K FY2025).
• Peers: Shopee revenue +48.2% and GMV +28.4% in Q2 2026; Amazon International segment sales +5.4% in Q3 2026; PDD transaction services revenue +13.2% in RMB in Q2 2026, with Temu not reported separately; Walmart revenue +5.9% in the quarter to 31 Jul 2026; Coupang Product Commerce +4.9% in Q3 2026.

3 Mercado Pago: $17.9bn Credit Book Up 62% and 93m Monthly Users

• Fintech revenue $4.61bn in Q3 2026, +42.5%: credit revenues $2.42bn, +57.7%; fintech services $2.17bn, +29.1%. Fintech growth in US dollars slowed from +51% in Q1 2026 to +42% (+40% FX neutral).
• Gross credit portfolio $17.9bn at 30 Sep 2026, +62.3%, and 2.7 times the Dec 2024 level: credit card $8.47bn (47.3% of the book against 43.6%), consumer $6.06bn, merchant $2.92bn.
• Credit quality: 15 to 90 day NPL 7.0%, against 8.0% in Q1 2026; NIMAL 20.1% against 21.0% a year earlier and 17.8% in Q1 2026; allowance 27.1% of gross loans against 25.7%; provision for doubtful accounts $1.34bn, +64.7%, which management attributes in part to up front provisioning on credit card growth.
• Users and payments: fintech monthly active users 93m, +29.2%, with Mexico above 18m; TPV $108.8bn, +52.8% (+51% FX neutral); acquiring TPV $68.3bn, +43.1%, FX neutral +31% in Brazil, +43% in Mexico and +55% in Argentina.
• Deposits and assets: assets under management $23bn at Q2 2026, +68% (Q2 2026 letter); almost 80% of adults in Argentina are Mercado Pago active users (Q3 2026 letter).

How digital banking in Latin America is changing

• Access to credit: fewer than 20% of Mexicans and 40% of Argentines hold a credit card (Q4 2025 letter); in Argentina credit to individuals as a share of GDP is a fifth of Brazil's level (Q1 2026 letter).
• Instant payments: StoneCo PIX QR code TPV grew 44.3% to BRL30.7bn in Q2 2026 while its card TPV fell 3.1% (StoneCo 6-K, 13 Aug 2026).
• Mexico: Nu launched its bank in Mexico in Aug 2026 with 16m customers and reported new central bank payment rules introduced in Jun 2026 (Nu 6-K, 13 Aug 2026); MercadoLibre reports Mercado Pago as the largest digital bank in Mexico by active users, with more than 18m monthly active users and 1.4m active point of sale devices (Q2 and Q3 2026 letters).
• Peers: Nu revenue $5.88bn, +39.0% FX neutral, credit portfolio $39.4bn, +37%, 15 to 90 day NPL 4.8% (Q2 2026); Sea's Monee loan book $11.1bn, +62.5%, with a growing presence in Latin America (Q2 2026); StoneCo revenue +2.5% and PagSeguro +0.4% in BRL.

4 Advertising: Revenue Up 51% FX Neutral and Connected TV

• Advertising revenue +51% FX neutral and +58% in US dollars in Q3 2026, after +67%, +63% and +62% FX neutral in the three prior quarters. MercadoLibre reports growth rates only; advertising sits in commerce services.
• Share: MercadoLibre passed 10% of Latin American digital advertising for the first time in Q2 2026 (Q2 2026 letter), after growing four times as fast as the market in 2025 (Q1 2026 letter).
• Products: an AI campaign advisor ran campaigns for 56,000 sellers in Q3 2026, almost four times the level three months earlier; AI driven dynamic ad load replaced fixed slots in search results (Q3 2026 letter).
• Connected TV: Netflix joins Disney, Roku and HBO Max on the connected TV ad offering from early 2027 (Q3 2026 letter); a demand side platform for advertisers in China launched in Q4 2025.

How advertising in Latin America is changing

• Channel mix: traditional channels still account for half of advertising in Latin America against a quarter in the US (Q1 2026 letter).
• Retail media: Walmart's global advertising business grew 38% in the quarter to 31 Jul 2026 and Amazon advertising services 10.9% to $19.6bn in Q3 2026 (Forms 8-K).
• Search and social: Google advertising $82.0bn, +10.6%, and Meta advertising $63.1bn, +25.9%, in Q3 2026 (Forms 10-Q); PDD online marketing services RMB57.6bn, +3.4%, in Q2 2026.
• Ad formats: search ads were the primary source of advertising revenue (Q4 2025 letter) and retail media on the marketplace remains most of it (Q3 2026 letter); Sea does not report Shopee advertising separately and includes it in core marketplace revenue.

5 Financial Analysis & Ratios

• Operating margin 6.3% in Q3 2026 against 9.8%; TTM 7.4%, FY2025 11.1%, FY2024 12.7%. Gross margin 40.8% against 43.3%, as first party sales and shipping costs grew faster than revenue.
• Net income $448m in Q3 2026, +6.4%; 9M 2026 $1.33bn against $1.44bn. Effective tax rate 25.5% against 33.8%, from non taxable gains on tax benefits and permanent difference deductions in Brazil, and lower taxable FX gains in Argentina (10-Q); FX losses $72m against $102m.
• Free cash flow: operating cash flow less capex was $12.3bn TTM, as operating cash flow includes growth in customer funds and card payables while growth in loans receivable ($8.3bn TTM) sits in investing cash flow. MercadoLibre's adjusted free cash flow, a non GAAP measure, was $443m in 9M 2026 against $718m, and $285m in Q3 2026. The 9M 2026 bridge in the Q3 2026 letter: operating cash flow $8.69bn less capex $1.22bn, less growth in restricted customer funds $3.57bn, less loan growth $6.21bn, plus net fintech funding $2.72bn and $38m of other items, equals $443m.
• Balance sheet at 30 Sep 2026: cash and investments $8.83bn; restricted cash $14.6bn, mainly regulated customer funds, against $2.06bn at Dec 2024; gross loans receivable $17.9bn; total equity $8.20bn.
• Debt: loans payable and other financial liabilities $13.2bn against $9.19bn at Dec 2025, mostly fintech funding (certificates of deposit, securitizations and credit lines); corporate notes $2.44bn: $687m of 3.125% notes due 2031 ($700m issued, $13m repurchased in 2025), $750m 4.900% due 2033 and $1bn 5.850% due 2036. The $367m 2026 Sustainability Notes were repaid on 14 Jan 2026.
• Capital returns: no dividends since Q1 2018; share repurchases of $1m in each of FY2024 and FY2025 and none in Q3 2026 (10-Q).

Cost structure and profitability

• Total costs and expenses $10.1bn in Q3 2026, +50.7%, against revenue +45.1%; costs are revenue less income from operations.
• Cost of net revenues and financial income 59.2% of revenue against 56.7%, as first party product sales grew +66.8% and shipping costs rose; the line also holds funding costs of the credit book.
• Provision for doubtful accounts $1.34bn, 12.5% of revenue against 11.0%; the Q1 2026 letter attributed two thirds of the year on year rise in provisions to the credit book growing faster than revenue.
• Sales and marketing $1.24bn, 11.6% of revenue against 11.2%; product and technology development 6.9% against 7.7%; G&A 3.5%.
• Cash flow: in Q3 2026 operating cash flow less capex was $2.45bn, loans receivable grew by $2.14bn and adjusted free cash flow was $285m after $503m of capex and $2.1bn of credit portfolio growth, partly offset by $1.5bn of fintech funding (letter).

Countries: revenue, FX neutral growth and direct contribution

• Brazil $6.00bn, +49.7% in US dollars and +41% FX neutral; commerce $3.66bn and fintech $2.34bn. Direct contribution $479m against $475m; margin 8.0% against 11.8% and 17.6% in Q1 2025, after the lower free shipping threshold of Jun 2025 and credit card growth.
• Mexico $2.43bn, +47.1% and +36% FX neutral; margin 14.2% against 18.5%; the Q2 2026 letter attributed just under half of the quarter on quarter fall in Mexico margin to acquiring device and user acquisition costs.
• Argentina $1.82bn, +26.2% in US dollars against +42% FX neutral, as the peso depreciated (official rate 1,455 per US dollar at Dec 2025, up 41.0% in 2025); margin 33.7%, the highest of the four, against 39.7%.
• Other countries $502m, +63.0%; margin 9.0%. Total direct contribution $1.48bn, 13.8% of revenue against 18.8%; direct contribution excludes G&A, product development and other corporate costs.

6 MD&A & Management Commentary

Q3 2026 shareholder letter and Form 10-Q

• Results (10-Q, 8-K of 4 Nov 2026): revenue $10.8bn, +45.1%; gross profit $4.38bn; costs and expenses below gross profit $3.71bn incl. provisions $1.34bn; income from operations $676m, (6.6%). 9M 2026 revenue $29.76bn, +47.8%; income from operations $1.97bn against $2.31bn.
• Margin against Q2 2026 (letter): 6.3% against 6.7%; net shipping costs took 60 basis points (40 in gross margin, 20 in G&A) and sales and marketing 40 basis points, at 11.6% of revenue, on the affiliates program in Brazil. Shipping costs rose 100 basis points of revenue against 60 basis points higher shipping charges, with energy prices and almost 20% more fulfillment space than in Q2 2026.
• Logistics and cost to serve (letter): Brazil cost per shipment (5%) year on year in local currency and (14%) against Q1 2025; net shipping margin about 200 basis points of GMV lower than in Q1 2025; 13 fulfillment centers opened in Metro areas in twelve months; robotics in Brazil and Mexico with 70% higher picking productivity; fintech cost to serve about $1 per monthly active user, flat since Q1 2025.
• Investment (letter, 10-Q): capex $503m in Q3 2026 and $1.22bn in 9M 2026 against $900m; AI investment up almost $30m from Q2 2026; credit card investment almost $450m over twelve months; Brazil card cohorts from 2021 to 2024, more than half of the Brazil card book, are NIMAL positive.
• Outlook: MercadoLibre gives no revenue or margin guidance in its shareholder letters or Form 10-Q. The Q3 2026 letter states that cost to serve gains reach reported margins gradually as investments mature, without a number.

Management and CFO commentary

• Consolidated financial results section, Q3 2026 letter (8-K Ex 99.1, 4 Nov 2026): margin 6.3%, 40 basis points below Q2 2026, from net shipping costs (60 basis points) and higher sales and marketing (40 basis points); G&A 3 points lower as a share of revenue over five years; adjusted free cash flow $285m after $503m capex and $2.1bn of credit growth, partly offset by $1.5bn of fintech funding.
• Management, Q3 2026 letter: fintech cost to serve about $1 per monthly active user; Mago assistant held 19m conversations in Sep 2026; about 7,000 customer support representatives.
• CFO section, Q2 2026 letter (5 Aug 2026): opex 2.6 points lower than in Q1 2026, offset by a 2.8 point lower gross margin; provisions up about 2 points of revenue year on year as the credit book grew 75% against revenue growth of 50%; FX losses $45m against $117m.
• CFO section, Q1 2026 letter (7 May 2026): gross margin 3 points lower year on year from the lower free shipping threshold and first party growth; product development 7.9% of revenue against 9.3%; adjusted free cash flow ($56m).
• CFO section, Q4 2025 letter (24 Feb 2026): income from operations $889m included $99m of one off Brazil tax credits, a 9.0% margin without them; strategic investments in free shipping, first party, cross border trade and credit cards equal to 5 to 6 points of margin; FY2025 adjusted free cash flow $1.5bn after more than $6.5bn of credit portfolio growth.
• CFO Martín de los Santos, notes press releases (8-K Ex 99.1, 4 Dec 2025 and 9 Sep 2026): the 2033 notes optimised the funding structure after reaching investment grade; the 2036 notes were a step toward full investment grade issuer status.

7 Sector & Competitor Analysis

• Sector: ecommerce and digital financial services in Latin America. MercadoLibre TTM revenue $38.52bn against Amazon $797.5bn, PayPal $34.3bn and Shopify $14.2bn (TTM to Sep 2026); Sea and Nu, the closest regional peers, report on Form 6-K and are compared in Chapters 2 and 3.
• Growth: MELI +45.1% in Q3 2026 against SHOP +31.6%, AMZN +12.1% and PYPL +2.0%; in Q2 2026 Sea's Shopee grew revenue 48.2% and Nu 39.0% FX neutral.
• Margins: MELI TTM operating margin 7.4% against PYPL 17.0%, SHOP 14.6% and AMZN 13.1%; MELI carries provisions for credit losses of $4.85bn TTM, 12.6% of revenue, inside operating expenses.
• Valuation: MELI 42.4x TTM P/E and 2.2x EV/Sales against AMZN 19.3x and 3.3x, SHOP 87.5x and 12.6x, PYPL 10.9x and 1.3x; market value $80.2bn.
• Returns: MELI ROE 26.2% TTM against AMZN 26.3%, PYPL 23.8% and SHOP 16.8%.

8 Material Events & Contracts

• Ten Forms 8-K in twelve months: four shareholder letters, four filings for two notes offerings, the 2026 compensation programs and the annual meeting results. No Form 8-K/A was filed.
• 2033 notes: $750m 4.900% senior notes due Jan 2033, priced on 4 Dec 2025 at 98.370% of face for a 5.176% yield, 130 basis points over Treasuries; the first issue after reaching investment grade ratings from S&P and Fitch; book 3.6 times covered by more than 150 investors; guaranteed by eight operating subsidiaries.
• 2036 notes: $1bn 5.850% senior notes due Sep 2036, priced on 9 Sep 2026 at 97.864% of face for a 6.139% yield, also 130 basis points over Treasuries; rated by S&P, Moody's (Baa3) and Fitch; guaranteed by six subsidiaries in Argentina, Brazil, Mexico, Chile and Colombia. The CFO stated the ten year notes priced at the same spread as the seven year issue.
• 2026 Long Term Retention Program (Ex 10.1, 8-K of 31 Mar 2026): cash plan effective 1 Jan 2026, paid annually over six years from 2027; half of each award is a fixed annual payment of 16.66% and half scales with the ratio of the prior year final 60 day average share price to the late 2025 average. Target awards: CEO Ariel Szarfsztejn $14m, Osvaldo Giménez $10m, Daniel Rabinovich $10m, CFO Martín de los Santos $4m, Executive Chairman Marcos Galperin $3.5m.
• 2026 bonus: target of four months of base salary, tied to constant dollar revenue, income from operations, adjusted TPV and competitive net promoter score (8-K of 31 Mar 2026).

9 Ownership, Voting Power & Annual Meeting

• No controlling holder: one class of common stock with one vote per share. The Galperin Trust /SD, through Meliga No. 1 Corp., held 3.40m shares (6.7%) per a Schedule 13D/A of 18 Jun 2026; Baillie Gifford 6.38% and Capital Research Global Investors 5.4% at 31 Mar 2026 per Schedules 13G. Baillie Gifford's stake fell from 9.25% at 30 Sep 2024.
• Annual meeting of 9 Jun 2026: directors are elected by plurality. Stelleo Tolda received 13.4m votes for and 25.7m withheld (34.3% for) and was elected; Susan Segal received 94.2% and Alejandro Nicolás Aguzin 98.6%. Say on pay 88.5% of votes cast; auditor ratified with 99.3%. The Form 8-K states no board response to the Tolda vote.
• Insider trades, Nov 2025 to Nov 2026 (Forms 4): open market purchases of about $1.29m: director Alejandro Aguzin 600 shares on 22 May 2026 (about $0.99m) and chief accounting officer Melamud 57 and 124.64 shares in Feb and Jun 2026 (about $0.30m). Open market sales of about $2.31m by directors Dubugras (845 shares), Tolda (246) and Calemzuk (45) in Dec 2025 at about $2,027 to $2,048. No Form 4 transactions by the CEO or Executive Chairman.
• Other insider filings: director grants of 94 shares each on 12 Jun 2026; a 250 share gift by Tolda; Tolda has a prepaid variable forward on 20,000 pledged shares, amended in Aug 2025 to mature on 20 Aug 2027 with a floor of $2,322.39 and a cap of $2,693.97; Forms 3 for new executive vice presidents Yunes and Costa (Jan 2026) and Summers (Jun 2026).

2026 annual meeting

• Meeting of 9 Jun 2026: record date 14 Apr 2026; 50,697,182 shares entitled to vote; results filed under Item 5.07 on 12 Jun 2026. The filing reports votes only.
• Class I directors elected to 2029: Susan Segal, Stelleo Passos Tolda and Alejandro Nicolás Aguzin.

10 Risk Factors

• Scope: Item 1A of the FY2025 Form 10-K compared with the FY2024 Form 10-K, heading by heading and body by body: 40 factors against 42, 1 added on AI, 3 removed, 13 materially reworded. The three 2026 Forms 10-Q report no material change.

How risk factors changed

• Comparison: 10-K FY2025 filed 25 Feb 2026 acc 0001099590-26-000006 against 10-K FY2024 filed 21 Feb 2025 acc 0001099590-25-000007.
• AI is mentioned 53 times across 8 risk factors in the FY2025 10-K against 34 times across 5 a year earlier, and now has its own factor.
• Competition text names Asian ecommerce platforms that gained a large share of Latin American ecommerce in 2025 through low prices and cross border logistics.
• Platform gatekeeper risk widened: app store commissions of 15% to 30% are named, and NFC access limits appear in both the competition and app store factors.
• Mexico's antitrust ecommerce case was closed in Aug 2025 without corrective measures, replacing the open COFECE proceeding described a year earlier.
• Item 1A grew 5% to 18,365 words while the factor count fell from 42 to 40 as three share related factors were dropped.

11 Stock Price, Scenarios & Sensitivity

• MELI traded at $1,581.59 intraday on 5 Nov 2026, (9.1%) from the 4 Nov close of $1,739.88, the session after the Q3 2026 release. The 52 week range is $1,495.00 to $2,342.00.
• Price path: month end close $2,613.63 in Jun 2025, $2,014.26 in Dec 2025, $1,697.39 in Jun 2026 and $1,624.53 in Oct 2026; $1,188.41 in Nov 2021.
• Valuation: 42.4x TTM diluted EPS of $37.28; market value $80.2bn on 50.7m shares; 2.2x EV/Sales TTM with fintech funding counted as debt; adjusted free cash flow yield 1.5% TTM. No dividend.
• Scenario basis: each case compounds TTM Q3 2026 revenue of $38.52bn at the case's revenue CAGR for three years, applies the case's operating margin to TTM Q3 2029 revenue, deducts net interest expense of $115m (the TTM level), taxes the result at 25% and divides by 50.7m shares; the implied price is TTM Q3 2029 EPS times the case's exit P/E. The growth, margin and P/E inputs are this report's assumptions; MercadoLibre gives no guidance and no analyst consensus figures were used.

Critical factors and core assumptions

• Revenue base TTM Q3 2026 $38.52bn; operating income $2.86bn (7.4% margin); diluted EPS $37.28.
• Best case: 30% revenue CAGR, 13% operating margin, 40x P/E; growth stays near the 2026 FX neutral pace before easing, card cohorts mature and shipping cost per unit falls; margin returns above the FY2024 level of 12.7%.
• Base case: 22% revenue CAGR, 10% margin, 30x P/E; growth slows from the FY2025 rate of 39% and margin returns to the FY2025 range of 10% to 11%.
• Worst case: 12% revenue CAGR, 6% margin, 20x P/E; local currencies depreciate, credit losses rise above provisions and shipping subsidies stay high, keeping margin near the Q3 2026 level of 6.3%.
• Other: tax rate 25% (25.5% in 9M 2026, 29.7% in FY2025); shares flat at about 50.7m, as buybacks have been $1m a year since FY2024 and no dividend is paid; revenue in US dollars; fintech funding debt grows with the credit book.

Scenarios, three years forward

Sensitivity analysis

Disclaimer

This analysis is for information only and is not financial advice. It is derived from public SEC filings retrieved via sec-api.io and is not a publication of the U.S. Securities and Exchange Commission. Scenario values are model outputs under stated assumptions and are not forecasts. Data as of 5 November 2026.

Sources

All company figures are read from SEC filings retrieved through the sec-api.io MCP server. Management statements come from the shareholder letters and other exhibits to the Forms 8-K and from the Forms 10-Q and 10-K. Industry figures are taken only from SEC filings of MercadoLibre and its peers.