Key Highlights
- MELI shares declined more than 7% after market close following first-quarter results that disappointed on earnings
- Earnings per share registered at $8.23, falling short of the $9.37 consensus forecast by $1.14
- Top-line results surged 49% compared to last year, reaching $8.85 billion and exceeding projections by $530 million
- Brazil saw unique buyer expansion of 32% year-over-year — marking the strongest growth rate in half a decade
- The lending portfolio expanded 87% annually to $14.6 billion, representing the biggest quarterly gain in absolute dollar terms
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 giant delivered its strongest top-line expansion in nearly four years.
The shares had climbed 1.6% in regular market hours before the quarterly report was released.
The company delivered adjusted earnings per share of $8.23, missing Wall Street’s consensus expectation of $9.37 by $1.14. This also represented a decline from the prior year’s figure of $9.74.
The quarter’s revenue totaled $8.85 billion, marking a 49% year-over-year gain and surpassing the Street’s $8.29 billion estimate by $530 million. This represented the company’s most robust revenue expansion since the second quarter of 2022.
Gross merchandise volume across the platform increased 42% from the same period last year. Mexico experienced a 48% rise, while Brazil recorded a 54% gain. Overall payment volume advanced 50% to reach $87.2 billion.
The company generated net income of $417 million, translating to a 4.7% profit margin. Operating income reached $611 million, representing a 6.9% operating margin. Free cash flow registered at negative $56 million, comparable to first-quarter results from the previous year.
MercadoLibre highlighted its strategic move to reduce the free shipping threshold in Brazil as a critical catalyst. The country’s unique buyer count expanded 32% year-over-year — the strongest pace witnessed in five years. Items sold jumped 56% annually, more than doubling the 26% growth seen in Q2 2025 prior to implementing the threshold adjustment.
Brazil’s GMV climbed 38% year-over-year when adjusted for currency fluctuations.
Financial Technology Segment Accelerates
The company’s fintech division maintained its expansion trajectory. Monthly active users hit 83 million, representing a 29% year-over-year increase.
The lending portfolio grew 87% annually to $14.6 billion — marking the largest quarterly expansion in dollar terms. Total assets under management rose 77% year-over-year to approach $20 billion.
Commerce division revenue reached $5 billion, climbing 47% from last year. Fintech segment revenue totaled $4 billion, advancing 51% year-over-year.
Advertising revenue expanded 73% annually in U.S. dollar terms. MercadoLibre stated that its Mercado Ads division has become the region’s fastest-expanding advertising platform.
Artificial Intelligence Transforms Search Functionality
The company launched its inaugural AI-powered search capability during the first quarter of 2026, completely redesigning the search infrastructure around large language models.
According to the company, the transition away from traditional keyword-based search enhanced product relevance across Brazil and Mexico, driving improved conversion metrics and stronger click-through performance for sponsored product listings — both contributing to incremental revenue generation.
Chief Financial Officer Martín de los Santos described Q1 2026 as “another exceptional quarter,” emphasizing the company’s investments to revolutionize how hundreds of millions of consumers across Latin America shop, transact, and utilize financial services.
The company emphasized that twenty-six years since its founding, it continues achieving startup-level growth rates throughout its primary markets. “Nowhere is this more evident than in Brazil, our largest and most established market, where growth is not just fast — it is accelerating,” the company stated.
The $1.14 earnings per share shortfall relative to analyst expectations served as the main catalyst for the after-hours share price decline, despite the revenue outperformance and generally robust operational performance indicators.
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