Key Highlights
- Shares declined more than 7% in extended trading following a first-quarter earnings disappointment
- Earnings per share of $8.23 fell below the Street consensus of $9.37, a shortfall of $1.14
- Top-line results surged 49% compared to last year, reaching $8.85 billion and surpassing projections by $530 million
- Unique buyer growth in Brazil accelerated to 32% year-over-year — marking the strongest expansion in half a decade
- The company’s credit portfolio expanded 87% YoY to $14.6 billion, representing the most significant quarterly gain in dollar terms
Shares of MercadoLibre (MELI) tumbled over 7% during after-hours trading on Thursday following the release of first-quarter 2026 results that saw earnings fall short of Wall Street projections, even as the e-commerce giant delivered its strongest revenue performance in nearly four years.
The stock had climbed 1.6% during Thursday’s regular trading session ahead of the earnings announcement.
The Latin American e-commerce leader posted adjusted earnings per share of $8.23, coming in beneath the analyst consensus estimate of $9.37 by $1.14. The result also trailed the prior year’s figure of $9.74.
Quarterly revenue reached $8.85 billion, marking a 49% year-over-year increase and exceeding the Street’s $8.29 billion forecast by $530 million. The growth rate represented the company’s fastest pace since the second quarter of 2022.
Gross merchandise volume across the platform advanced 42% from the same period last year. Mexico experienced a 48% surge, while Brazil saw volume jump 54%. Total payment volume climbed 50% to reach $87.2 billion.
Net income for the quarter totalled $417 million, producing a 4.7% profit margin. Operating income stood at $611 million, translating to a 6.9% operating margin. The company recorded negative free cash flow of $56 million, roughly consistent with the first quarter of the previous year.
MercadoLibre attributed much of its momentum to the strategic decision to reduce the free shipping threshold in Brazil. This change drove unique buyer growth of 32% year-over-year in the country — the fastest rate seen in five years. Items sold jumped 56% YoY, more than doubling the 26% expansion recorded in Q2 2025 before the threshold adjustment took effect.
On a currency-neutral basis, Brazil’s GMV increased 38% year-over-year.
Fintech Operations Maintain Strong Momentum
The company’s fintech division delivered continued expansion. Monthly active users climbed to 83 million, representing a 29% year-over-year gain.
The credit portfolio expanded 87% YoY to reach $14.6 billion — marking the largest quarterly increase in absolute dollar terms. Assets under management rose 77% YoY to approach $20 billion.
Commerce revenue hit $5 billion, up 47% from last year. Fintech revenue reached $4 billion, climbing 51% YoY.
Advertising revenue surged 73% YoY measured in U.S. dollars. MercadoLibre highlighted that its Mercado Ads division has become the fastest-expanding advertising platform throughout the region.
Artificial Intelligence Transforms 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, moving away from traditional keyword-based search algorithms enhanced product relevance across both Brazil and Mexico, resulting in improved conversion rates and stronger click-through performance for sponsored product listings — both of which generated incremental revenue.
CFO Martín de los Santos described Q1 2026 as “another exceptional quarter,” emphasizing that the company continues investing heavily to revolutionize how hundreds of millions of consumers across Latin America engage in commerce, payments, and financial services.
MercadoLibre emphasized that twenty-six years following its initial launch, the platform continues achieving growth rates typically associated with early-stage startups throughout all major 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 per-share earnings miss relative to analyst expectations served as the primary catalyst for the after-hours decline, despite the company’s revenue outperformance and generally robust operational performance across key metrics.
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