MercadoLibre Inc.
MercadoLibre Inc.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 05:01
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
Any statements made or implied in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and should be evaluated as such. The words "anticipate," "believe," "expect," "intend," "plan," "estimate," "target," "project," "should," "may," "could," "will" and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are contained throughout this report. Our forward-looking statements, and the risks and uncertainties related to them, include, but are not limited to, statements regarding MercadoLibre, Inc.'s expectations, objectives and progress against strategic priorities; initiatives and strategies related to our products and services; business and market outlook, opportunities, strategies and trends; impacts of foreign exchange; the potential impact of the uncertain macroeconomic and geopolitical environment on our financial results; customer preferences and demand and market expansion; our planned product and services releases and capabilities; industry growth rates; inflation; future stock repurchases; our expected tax rate and tax strategies; and the likelihood, impact and result of pending legal, administrative and tax proceedings or government investigations. Such forward-looking statements are subject to known and unknown risks, uncertainties and other important factors (in addition to those discussed elsewhere in this report) that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Some of the material risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described in "Item 1A-Risk Factors" in Part I of the Company's 2025 10-K filed with the Securities and Exchange Commission ("SEC") on February 25, 2026. You should read that information in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I of this report, our unaudited interim condensed consolidated financial statements and related notes in Item 1 of Part I of this report and our audited consolidated financial statements and related notes in Item 8 of Part II of the Company's 2025 10-K, as well as the factors discussed in the other reports and documents we file from time to time with the SEC.
There also may be other factors that we cannot anticipate or that are not described in this report, generally because they are unknown to us or we do not perceive them to be material that could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these forward-looking statements except as may be required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the SEC.
Many of these risks are beyond our ability to control or predict. New risk factors emerge from time to time and it is not possible for Management to predict all such risk factors, nor can it assess the impact of all such risk factors on our Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on our forward-looking statements. These statements are not guarantees of future performance.
The discussion and analysis of our financial condition and results of operations has been organized to present the following:
■ a brief overview of our Company;
■ a review of our critical accounting policies and estimates;
■ a discussion of our principal trends and results of operations for the nine and three-month periods ended September 30, 2026 and 2025;
■ a discussion of the principal factors that influence our results of operations, financial condition and liquidity;
■ a discussion of our liquidity and capital resources and a discussion of our capital expenditures;
■ a description of our key performance indicators; and
■ a description of our non-GAAP financial measures.
Certain monetary amounts included elsewhere in this document have been subject to rounding adjustments, percentage changes may not align exactly with dollar figures due to rounding. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them.
Other Information
MercadoLibre, Inc. (together with its subsidiaries "us," "we," "our" or the "Company") routinely posts important information for investors on our investor relations website, investor.mercadolibre.com. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this report.
42 | MercadoLibre, Inc.
Business Overview
We are the leading online commerce and fintech ecosystem in Latin America. Our e-commerce platform is the leader in the region based on gross merchandise volume ("GMV"), and our fintech platform is the leader in monthly active users ("MAUs") among fintech companies in Argentina, Chile and Mexico, and the second largest in Brazil. Mercado Libre's e-commerce platform is present in 18 countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay, Venezuela (deconsolidated since December 2017), Bolivia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and El Salvador) and our fintech platform, Mercado Pago, is present in eight countries (Argentina, Brazil, Mexico, Chile, Colombia, Peru, Uruguay and Ecuador). Our ecosystem provides consumers and merchants with a complete portfolio of services to enable buying and selling online, and the processing of payments online and offline, as well as offering a wide array of simple day-to-day financial services.
We offer our users an ecosystem of integrated e-commerce and digital financial services, which includes: the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and the Mercado Libre Classifieds service.
Our e-commerce platform provides buyers and sellers with a robust and safe environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people where penetration of e-commerce over total retail significantly lags benchmarks such as the United States of America ("U.S."), the United Kingdom ("U.K.") and China. We believe that we offer world-class technological and commercial solutions that address the distinctive cultural and geographic challenges of operating a digital commerce platform in Latin America.
The Mercado Libre Marketplace is a user-friendly online commerce platform that can be accessed through our mobile app or website. Third-party sellers ("3P") account for most of the GMV transacted on the Marketplace. We complement this by selling directly to consumers on a first-party basis ("1P") in selected categories where we can enhance price competitiveness and assortment; this accounts for less than 10% of GMV. The Marketplace has an extensive assortment of products, with a wide range of categories including consumer electronics, apparel and beauty, home goods, automotive accessories, toys, books and entertainment and consumer packaged goods. We also have a selection of international products available, primarily from sellers in China and the U.S., through our cross-border trade ("CBT") operations. Our users can also list vehicles, properties and services they are looking to sell via Mercado Libre Classifieds. These listings differ from our Marketplace listings because we charge placing fees only, not final value fees.
Mercado Envios is a logistics solution that is one of the value-added services that we offer to our sellers and buyers on our platform. The logistics services we offer are an integral and crucial part of our value proposition as they reduce friction between buyers and sellers, allow us to have greater control over the full user experience and enable faster deliveries at a more competitive cost than would otherwise be available with third-party carriers. Sellers that use Mercado Envios are eligible to access shipping subsidies that enable free or discounted shipping for consumers that buy sellers' goods on our Marketplace. Our logistics network is built around fulfillment centers (which account for more than half of shipments), where sellers place their inventory in our warehouses, and cross-docking, where we collect items sold from sellers directly or via a network of thousands of partner stores ("MELI Places") where sellers drop off sold items that need to be fed into our logistics network. MELI Places are also enabled for pick up of items purchased and processing of returns. Our transportation network includes dedicated aircraft, trucks and thousands of last-mile delivery vans, the vast majority of which are owned and operated by our third-party carriers.
Our advertising platform, Mercado Ads, is another value-added service that we offer to sellers on our platform and brands both on- and off-platform. The platform enables sellers and brands to access the millions of consumers who browse and purchase on our Marketplace, as well as the first-party data that all of these engagements generate. This enables advertisers to target highly granular audiences. The products we offer are Product Ads (sponsored listings), Brands Ads (product carrousels), Display Ads (banners) and Video Ads, the last two of which we are able to offer inventory off-platform as well as on our own Marketplace and fintech platform.
Mercado Pago was initially designed to facilitate transactions on Mercado Libre's Marketplace by providing a mechanism that allowed our users to securely, easily and promptly send and receive payments. This brought trust to the merchant-consumer relationship. In the countries in which Mercado Pago operates, it processes and settles all transactions on our Marketplace.
Beyond facilitating Marketplace transactions, over the years we have expanded our array of Mercado Pago services to third parties outside Mercado Libre's Marketplace. We began first by satisfying the growing demand for online-based payment solutions by providing merchants the necessary digital payment infrastructure for e-commerce to flourish in Latin America. We subsequently offered our payments processing services to merchants in the physical world through Point of Sales ("POS") devices in Argentina, Brazil, Mexico and Chile, and QR codes in Argentina and Brazil.
Our lending solution is available in Argentina, Brazil, Mexico and Chile. We offer loans mostly to merchants and consumers that already form part of our user base, many of whom have historically been underserved or overlooked by financial institutions and therefore suffer from a lack of access to credit. Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution.
Our asset management product, which is available in Argentina, Brazil, Mexico, Chile and Uruguay, is a critical pillar of our financial services offering that enables us to compete with large banks. This product offers remuneration on balances held in the Mercado Pago digital account that is greater than traditional checking and savings accounts. This enables our users to earn a return with funds remaining available for withdrawal or to make payments without their funds being tied up in a time deposit.
43 | MercadoLibre, Inc.
As an extension of our asset management and savings solutions for users, we launched a digital assets feature as part of the Mercado Pago account in Brazil, Mexico and Chile, in 2021, 2022 and 2023, respectively. This service allows our millions of users to purchase, hold and sell selected digital assets through our interface without leaving the Mercado Pago application, while a partner acts as the custodian and offers the blockchain infrastructure platform. This feature is available for all users through their Mercado Pago account. In 2024 and 2025 we launched "Meli Dólar," a stablecoin that is pegged to the US dollar, in Brazil, Mexico and Chile. Members of our loyalty program receive their cashback in Meli Dólar and all Mercado Pago users can buy, hold and sell the stablecoin without charging any fees.
Fintech Regulation Updates
The information below provides updates as of the date of the issuance of this report, to the regulatory framework governing the Company's Mercado Pago services described in our 2025 10-K:
Brazil
In November 2025, the Central Bank of Brazil ("BACEN") published Resolutions No. 519, 520, and 521, establishing the regulatory framework for Virtual Asset Service Providers ("VASPs" or "PSAVs") in Brazil, effective February 2026. Among other requirements, these resolutions mandate BACEN authorization for entities providing virtual asset services, impose asset segregation obligations, and require compliance with KYC and anti-money laundering protocols. In connection with these new requirements, Mercado Pago Distribuidora de Títulos e Valores Mobiliários Ltda., a Brazilian subsidiary authorized by BACEN as a securities distributor, submitted a request on July 30, 2026, within the prescribed regulatory transition period, for authorization to perform crypto asset intermediation and custody services in Brazil, aligning its virtual asset operations with the new regulatory framework.
In April 2026, the BACEN published a resolution that refines the scope of permitted international payment and transfer services ("eFX") transactions, including transfers related to investments in financial and capital markets up to USD 10,000, and requires eFX service providers to obtain prior BACEN authorization. Notably, the resolution expressly prohibits the use of virtual assets, including stablecoins, as a form of payment, receipt, or settlement between the eFX provider and the foreign counterpart. As of the resolution's effective date of October 1, 2026, Brazilian Mercado Pago entities had implemented the required obligations and are continuing to monitor sellers that are required to obtain BACEN authorization prior to May 2027.
Argentina
On February 5, 2026, the Central Bank of Argentina ("CBA") issued Communication "A" 8398, extending the scope of the "Minimum Requirements for the Management and Control of Technology and Information Security Risks" (a framework originally applicable only to financial institutions) to Payment Service Providers ("PSPs"). The regulation establishes a mandatory compliance deadline of 180 calendar days from the issuance date, setting a target implementation date for August 2026. As of the date of this filing, the entire regulatory framework is fully enforceable and applicable to MercadoLibre S.R.L. and Mercado Pago Servicios de Procesamiento S.R.L. and the necessary adjustments to align their existing technology and information security controls with the new requirements have been substantially implemented.
On April 30, 2026, the CBA issued Communication "A" 8432, amending the regulations applicable to PSPs. The communication introduced several significant changes, including: (i) tightened requirements governing who may operate as a PSP and who may hold ownership or management positions; (ii) the formal definition of a new category of PSP - the "PSPCP as a Service", which refers to entities that offer payment accounts to the clients of a third-party using an interface provided and controlled by that third party; and (iii) the extension of the CBA's Anti-Money Laundering ("AML"), Counter-Terrorism Financing, and Other Illicit Activities regulations to PSPs that qualify as reporting entities under UIF Resolution N° 200/24. The regulation established a compliance deadline of 90 calendar days from the date of issuance. MercadoLibre S.R.L., which does not operate under the "PSPCP as a Service" model, conducted the necessary review as a reporting entity subject to the AML framework and implemented all required adjustments within the established timeframe. As of the date of this filing, MercadoLibre S.R.L. is in full compliance with all provisions of Communication "A" 8432.
On April 27, 2026, the Argentine Securities and Exchange Commission ("CNV") issued Resolution No. 1130, introducing a new prudential framework applicable to Clearing and Settlement Agents ("ALyC"). The regulation establishes a new regulatory reporting regime on financial indicators, liquidity and leverage ratios, reporting obligations regarding proprietary foreign currency positions, and accounting guidelines for the calculation of such indicators. Subsequently, Resolution No. 1144 introduced technical amendments and clarifications to the framework, including the methodology for calculating certain indicators, reporting requirements and implementation deadlines. Mercado Pago Inversiones S.R.L., in its capacity as a registered ALyC, is subject to this framework and is currently complying with the new regulatory reporting obligations while monitoring compliance with the applicable prudential liquidity and leverage limits.
In June 2026, the CNV issued several resolutions as part of a broader regulatory reform introducing new automatic authorization regimes within the Argentine capital markets framework. The new regulations extend automatic authorization procedures to certain public offerings by issuers, Financial Trusts and Mutual Funds, replacing prior authorization requirements with a streamlined regulatory framework for eligible transactions and products. Following the enactment of these resolutions, Mercado Libre Group companies in Argentina have adapted their internal processes for the creation, launch and issuance of capital markets products to comply with the new regulatory regimes established by the CNV.
In September 2026, the CNV issued Resolution No. 1167, establishing a regulatory framework for Labor Assistance Funds ("FAL") through Mutual Funds and Financial Trusts. The regulation sets out requirements for the establishment, administration and operation of these funds, including investment restrictions, reporting obligations, portability mechanisms and limits on fees and expenses. Mercado Pago Asset Management S.A., as a registered Mutual Fund Management Company, is currently working on the launch of a FAL Mutual Fund. Subsequently, Decree No. 1228/2026, published on October 20, 2026, postponed the effective date of the FAL regime from November 1, 2026, to December 1, 2026, and extended the minimum waiting period for the use of accumulated funds from six to twelve monthly contribution periods. On November 3, 2026, the CNV assigned the registration number to the FAL Mutual Fund.
44 | MercadoLibre, Inc.
Chile
On August 6, 2026, the CMF approved the application of Mercado Pago Operadora S.A to incorporate cross-border acquiring activities into its corporate purpose. As of the date of this filing, the company is completing the remaining formalization steps required under Article 127 of Law N° 18.046, including registration and publication of the certificate evidencing the approved amendment.
Uruguay
On May 7, 2026, the Board of the Central Bank of Uruguay ("CBU") authorized MercadoPago Uruguay S.R.L. to offer interest-bearing accounts through a partner. The product is available to individual customers.
On August 21, 2026, the CBU authorized MercadoPago Uruguay S.R.L. to offer the Prepaid Card to its customers. On October 1, 2026, the CBU also authorized MercadoPago Uruguay S.R.L. to incorporate the activity of Electronic Payment Processing Terminal Administrator, and to offer Mercado Pago Point, its payment processing terminal.
Bermuda
In August 2026, the Bermuda Monetary Authority (BMA) extended the Class M Digital Asset Business licenses held by Meli ISAC Ltd. and Meli ISA Ltd., both operating under Bermuda's Digital Asset Business Act 2018, for an additional six-month period through February 18, 2027.
Reporting Segments and Geographic Information
Our segment reporting is based on geography, which is the criterion our Management currently uses to evaluate our segment performance. Our geographic segments are Brazil, Mexico, Argentina and Other Countries (including Bermuda, Chile, China, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.). Although we discuss long-term trends in our business, it is our policy not to provide earnings guidance in the traditional sense. We believe that uncertain conditions make the forecasting of near-term results difficult. Further, we seek to make decisions focused primarily on the long-term welfare of our Company and believe focusing on short-term earnings does not best serve the interests of our stockholders. We believe that execution of key strategic initiatives as well as our expectations for long-term growth in our markets will best create stockholder value. A long-term focus may make it more difficult for industry analysts and the market to evaluate the value of our Company, which could reduce the value of our common stock or permit competitors with short-term tactics to grow more rapidly than us. We, therefore, encourage potential investors to consider this strategy before making an investment in our common stock.
The following table sets forth the percentage of our consolidated net revenues and financial income by segment for the nine and three-month periods ended September 30, 2026 and 2025:
|
Nine Months Ended September 30, |
Three Months Ended September 30, |
||||||||||||||||||||||
| (% of total consolidated net revenues and financial income) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Brazil | 54.8 | % | 52.5 | % | 55.8 | % | 54.1 | % | |||||||||||||||
| Mexico | 22.7 | 21.7 | 22.6 | 22.3 | |||||||||||||||||||
| Argentina | 18.0 | 21.6 | 16.9 | 19.4 | |||||||||||||||||||
| Other Countries | 4.6 | 4.2 | 4.7 | 4.2 | |||||||||||||||||||
Net revenues and financial income for the nine and three-month periods ended September 30, 2026 as compared to the same periods in 2025 are described in "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations-Principal trends in results of operations- Net revenues and financial income."
Critical Accounting Policies and Estimates
There have been no significant changes in our critical accounting policies, Management estimates or accounting policies since the year ended December 31, 2025 and disclosed in the Company's 2025 10-K under the heading "Critical Accounting Policies and Estimates."
Results of operations for the nine and three-month periods ended September 30, 2026 compared to the nine and three-month periods ended September 30, 2025
The selected financial data for the nine and three-month periods ended September 30, 2026 and 2025 discussed herein is derived from our unaudited interim condensed consolidated financial statements included in Item 1 of Part I of this report. The results of operations for the nine and three-month periods ended September 30, 2026, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026 or for any other period.
45 | MercadoLibre, Inc.
Principal trends in results of operations
Net revenues and financial income
We disaggregate revenues into four geographical reporting segments. Within each of our segments, the services we provide and the products we sell generally fall into two distinct revenue streams: "Commerce" and "Fintech."
Commerce revenues are mainly generated from:
■ marketplace fees that include final value fees and flat fees. Final value fees represent a percentage of the sale value that is charged to the seller once an item is successfully sold and flat fees represent a fixed charge for certain specific transactions, in case they fall below a certain merchandise value;
■ first-party sales, which are generated when control of the good is transferred, upon delivery to our customers;
■ shipping fees, which are generated when an item is delivered through our shipping service. When we act as an agent, revenues derived from the shipping services are recognized at the time the transaction is successfully concluded for third-party sales, and presented net of the transportation costs charged by third-party carriers. When we act as principal, revenues derived from shipping services are recognized upon delivery of the good to the customer, and presented on a gross basis. In addition, the Company generates storage fees, which are charged to the seller for the utilization of the Company's fulfillment facilities;
■ ad sales fees due to advertising services provided to sellers, vendors, brands and others, through product searches (product ads and brand ads) and display formats (including video ads and display programmatic), which are recognized based on the number of clicks and impressions, respectively;
■ classifieds fees due to offerings in vehicles, real estate and services, which are charged to sellers who opt to give their listings greater exposure throughout our websites;
■ subscription fees associated with MELI+ memberships and third party digital content subscriptions; and
■ fees from other ancillary businesses.
Fintech revenues and financial income are attributable to:
■ commissions representing a percentage of the payment volume processed that are charged to sellers in connection with off-Marketplace platform transactions;
■ commissions from additional fees we charge when a buyer elects to pay in installments through our Mercado Pago platform, for transactions that occur either on or off our Marketplace platform;
■ interest, cash advances and fees from credit cards, merchant, consumer and asset-backed loans granted under our lending solution;
■ revenues from our asset management product;
■ interest earned on investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains passed through to our Brazilian users in connection with our asset management product;
■ commissions that we charge from transactions carried out with Mercado Pago debit cards;
■ revenues from the sale of mobile points of sale products;
■ revenues from insurtech fees;
■ commissions from additional fees we charge when our sellers elect to withdraw cash; and
■ fees from other ancillary services.
Although we also process payments on the Marketplace, we do not charge sellers an added commission for this service, as it is already included in the Marketplace final value fee that we charge.
We have a highly fragmented customer revenue base given the large numbers of sellers and buyers who use our platforms. For the nine and three-month periods ended September 30, 2026 and 2025, no single customer accounted for more than 5.0% of our net revenues and financial income.
Our net revenues and financial income are generated in multiple foreign currencies and then translated into U.S. dollars at the average monthly exchange rate. The functional currency for each country's operations is the country's local currency, except for Argentina, where the functional currency is the U.S. dollar due to Argentina's status as a highly inflationary economy. Please refer to Note 2 - Summary of significant accounting policies to our unaudited interim condensed consolidated financial statements for further detail on foreign currency translation.
Our net revenues and financial income grew during the nine and three-month periods ended September 30, 2026, compared to the same periods in 2025, boosted by growth in credit originations from our lending business and our first-party business, and higher total payment volume and gross merchandise volume.
46 | MercadoLibre, Inc.
The following table summarizes our consolidated net revenues and financial income for the nine and three-month periods ended September 30, 2026 and 2025:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 29,764 | $ | 20,134 | $ | 9,630 | 47.8 | % | $ | 10,750 | $ | 7,409 | $ | 3,341 | 45.1 | % | |||||||||||||||||||||||||||||||
The following table summarizes our consolidated net revenues and financial income by revenue stream and geographic segment for the nine and three-month periods ended September 30, 2026 and 2025:
| Consolidated net revenues and financial income |
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | |||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||
| Brazil | |||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | $ | 9,815 | $ | 6,412 | $ | 3,403 | 53.1 | % | $ | 3,659 | $ | 2,416 | $ | 1,243 | 51.5 | % | |||||||||||||||||||||||||||||||
| Fintech | 6,490 | 4,152 | 2,338 | 56.3 | 2,342 | 1,593 | 749 | 47.1 | |||||||||||||||||||||||||||||||||||||||
| 16,305 | 10,564 | 5,741 | 54.4 | 6,001 | 4,009 | 1,992 | 49.7 | ||||||||||||||||||||||||||||||||||||||||
| Mexico | |||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 4,098 | 2,819 | 1,279 | 45.4 | 1,453 | 1,049 | 404 | 38.6 | |||||||||||||||||||||||||||||||||||||||
| Fintech | 2,644 | 1,560 | 1,084 | 69.5 | 976 | 602 | 374 | 62.0 | |||||||||||||||||||||||||||||||||||||||
| 6,742 | 4,379 | 2,363 | 54.0 | 2,429 | 1,651 | 778 | 47.1 | ||||||||||||||||||||||||||||||||||||||||
| Argentina | |||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 1,908 | 1,489 | 419 | 28.1 | 678 | 495 | 183 | 36.9 | |||||||||||||||||||||||||||||||||||||||
| Fintech | 3,447 | 2,861 | 586 | 20.5 | 1,140 | 946 | 194 | 20.4 | |||||||||||||||||||||||||||||||||||||||
| 5,355 | 4,350 | 1,005 | 23.1 | 1,818 | 1,441 | 377 | 26.1 | ||||||||||||||||||||||||||||||||||||||||
| Other countries | |||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 950 | 596 | 354 | 59.3 | 351 | 214 | 137 | 63.8 | |||||||||||||||||||||||||||||||||||||||
| Fintech | 412 | 245 | 167 | 67.8 | 151 | 94 | 57 | 61.5 | |||||||||||||||||||||||||||||||||||||||
| 1,362 | 841 | 521 | 61.7 | 502 | 308 | 194 | 63.1 | ||||||||||||||||||||||||||||||||||||||||
| Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||
| Commerce | 16,771 | 11,316 | 5,455 | 48.2 | 6,141 | 4,174 | 1,967 | 47.2 | |||||||||||||||||||||||||||||||||||||||
| Fintech | 12,993 | 8,818 | 4,175 | 47.4 | 4,609 | 3,235 | 1,374 | 42.5 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 29,764 | $ | 20,134 | $ | 9,630 | 47.8 | % | $ | 10,750 | $ | 7,409 | $ | 3,341 | 45.1 | % | |||||||||||||||||||||||||||||||
See Note 6 - Segments of our unaudited interim condensed consolidated financial statements for further information regarding our net revenues and financial income disaggregated by similar products and services for the nine and three-month periods ended September 30, 2026 and 2025.
47 | MercadoLibre, Inc.
Our Commerce revenues grew $5,455 million and $1,967 million, or 48.2% and 47.2%, for the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, respectively. This increase in Commerce revenues was primarily attributable to:
■ an increase of $3,683 million and $1,355 million in our Commerce services revenues for the nine and three-month periods ended September 30, 2026, respectively, mainly related to a 41% and 38% increase in gross merchandise volume. Shipping carrier costs netted against revenues increased $100 million, from $706 million for the nine-month period ended September 30, 2025, to $806 million for the nine-month period ended September 30, 2026. For the three-month period ended September 30, 2026 as compared to the same period in 2025, shipping carrier costs netted against revenues decreased $4 million, from $262 million for the three-month period ended September 30, 2025, to $258 million for the three-month period ended September 30, 2026; and
■ an increase of $1,772 million and $612 million in our revenues from Commerce product sales for the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, respectively, mainly in Brazil and Mexico.
Our Fintech revenues grew 47.4% and 42.5%, from $8,818 million and $3,235 million for the nine and three-month periods ended September 30, 2025, to $12,993 million and $4,609 million for the nine and three-month periods ended September 30, 2026, respectively. This increase was mainly generated by:
■ an increase of $2,703 million and $885 million in our Credit revenues for the nine and three-month periods ended September 30, 2026, respectively, mainly as a consequence of higher originations; and
■ an increase of $1,466 million and $489 million in our revenues from Financial services and income for the nine and three-month periods ended September 30, 2026, respectively, mainly related to our off-platform transactional fees and financing transactions, as a result of a 53% and 53% increase in our total payment volume.
Brazil
Commerce revenues in Brazil increased 53.1% in the nine-month period ended September 30, 2026 as compared to the same period in 2025. This increase was generated by an increase of $2,189 million in our Commerce services revenues and an increase of $1,214 million in our revenues from Commerce product sales. Fintech revenues grew by 56.3%, a $2,338 million increase during the nine-month period ended September 30, 2026 as compared to the same period in 2025, mainly driven by an increase of $1,669 million in our Credit revenues and an increase of $667 million in our revenues from Financial services and income.
Commerce revenues in Brazil increased 51.5% in the three-month period ended September 30, 2026 as compared to the same period in 2025. This increase was generated by an increase of $829 million in our Commerce services revenues and an increase of $414 million in our revenues from Commerce product sales. Fintech revenues grew by 47.1%, a $749 million increase during the three-month period ended September 30, 2026 as compared to the same period in 2025, mainly driven by an increase of $542 million in our Credit revenues and an increase of $207 million in our revenues from Financial services and income.
Net revenues growth during the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, was boosted by the average decrease of Brazil's exchange rate against U.S. dollar of 8.9% and 5.7%, respectively.
Mexico
Commerce revenues in Mexico increased 45.4% in the nine-month period ended September 30, 2026 as compared to the same period in 2025. This increase was driven by an increase of $930 million in our Commerce services revenues and an increase of $349 million in our revenues from Commerce product sales. Fintech revenues grew 69.5%, a $1,084 million increase, during the nine-month period ended September 30, 2026 as compared to the same period in 2025, mainly driven by an increase of $640 million in our Credit revenues and an increase of $442 million in our revenues from Financial services and income.
Commerce revenues in Mexico increased 38.6% in the three-month period ended September 30, 2026 as compared to the same period in 2025. This increase was driven by an increase of $286 million in our Commerce services revenues and an increase of $118 million in our revenues from Commerce product sales. Fintech revenues grew 62.0%, a $374 million increase, during the three-month period ended September 30, 2026 as compared to the same period in 2025, mainly driven by an increase of $223 million in our Credit revenues and an increase of $151 million in our revenues from Financial services and income.
48 | MercadoLibre, Inc.
Net revenues growth during the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, was boosted by the average decrease of Mexico's exchange rate against U.S. dollar of 10.9% and 7.3%, respectively.
Argentina
Commerce revenues in Argentina increased 28.1% in the nine-month period ended September 30, 2026 as compared to the same period in 2025. This increase was driven by an increase of $318 million in our Commerce services revenues and an increase of $101 million in our revenues from Commerce product sales. Fintech revenues increased 20.5%, a $586 million increase, during the nine-month period ended September 30, 2026 as compared to the same period in 2025, mainly driven by an increase of $368 million in our Credit revenues and an increase of $218 million in our revenues from Financial services and income.
Commerce revenues in Argentina increased 36.9% in the three-month period ended September 30, 2026 as compared to the same period in 2025. This increase was driven by an increase of $145 million in our Commerce services revenues and an increase of $38 million in our revenues from Commerce product sales. Fintech revenues increased 20.4%, a $194 million increase, during the three-month period ended September 30, 2026 as compared to the same period in 2025, mainly driven by an increase of $109 million in our Credit revenues and an increase of $85 million in our revenues from Financial services and income.
Net revenues growth during the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, was partially offset by the average increase of Argentina's exchange rate against U.S. dollar of 22.2% and 12.5%, respectively.
The following table sets forth our total net revenues and financial income and the sequential quarterly variation of these net revenues and financial income for the periods described below:
| Quarter Ended | |||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | ||||||||||||||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
| 2026 | |||||||||||||||||||||||
| Net revenues and financial income | $ | 8,845 | $ | 10,169 | $ | 10,750 | n/a | ||||||||||||||||
| Percent change from prior quarter | 1 | % | 15 | % | 6 | % | |||||||||||||||||
| 2025 | |||||||||||||||||||||||
| Net revenues and financial income | $ | 5,935 | $ | 6,790 | $ | 7,409 | $ | 8,759 | |||||||||||||||
| Percent change from prior quarter | (2) | % | 14 | % | 9 | % | 18 | % | |||||||||||||||
The following table sets forth the growth in net revenues and financial income in local currencies, for the nine and three-month periods ended September 30, 2026 as compared to the same periods in 2025:
| Change from 2025 to 2026 | |||||||||||
|
(% of net revenues and financial income growth in Local Currency) (1)
|
Nine-month period | Three-month period | |||||||||
| Brazil | 40.9 | % | 41.2 | % | |||||||
|
Mexico
|
37.8 | 36.3 | |||||||||
|
Argentina (2)
|
51.2 | 41.9 | |||||||||
| Other countries | 51.4 | 54.3 | |||||||||
| Total consolidated | 42.9 | % | 40.8 | % | |||||||
(1) The local currency revenue growth was calculated by using the average monthly exchange rates for each month during 2025 and applying them to the corresponding months in 2026, so as to calculate what our financial results would have been if exchange rates had remained stable from one year to the next. See also "Non-GAAP Financial Measures" section below for details on FX neutral measures.
(2) For the nine and three-month periods ended September 30, 2026, the average inter-annual inflation rates in our Argentine segment of 33.1% and 33.6%, respectively, were higher than the average inter-annual increase of Argentina's official exchange rates against U.S. dollar of 22.2% and 12.5%, respectively.
49 | MercadoLibre, Inc.
Cost of net revenues and financial expenses
Cost of net revenues and financial expenses primarily includes shipping operation costs (including warehousing costs), carrier and other operating costs, cost of goods sold, collection fees, sales taxes, funding costs related to our fintech business, fraud prevention expenses, hosting, artificial intelligence ("AI") capabilities expenses, certain tax withholding related to export duties, compensation for customer support personnel and depreciation and amortization. The following table presents cost of net revenues and financial expenses for the periods indicated:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||
| Cost of net revenues and financial expenses | $ | 17,359 | $ | 11,060 | $ | 6,299 | 57.0% | $ | 6,366 | $ | 4,200 | $ | 2,166 | 51.6% | |||||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | 58.3 | % | 54.9% | 59.2% | 56.7% | ||||||||||||||||||||||||||||||||||||||||||
For the nine-month period ended September 30, 2026 as compared to the same period in 2025, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $2,883 million increase in shipping operating and carrier costs; ii) $1,456 million increase in cost of sales of goods mainly in Brazil and Mexico; iii) $610 million increase in collection fees across all of our main segments, as a result of the higher total payment volume of Mercado Pago in those countries; iv) $399 million increase in sales taxes; and v) $380 million increase in hosting.
For the three-month period ended September 30, 2026 as compared to the same period in 2025, the increase in cost of net revenues and financial expenses was primarily attributable to a: i) $1,057 million increase in shipping operating and carrier costs; ii) $489 million increase in cost of sales of goods mainly in Brazil and Mexico; iii) $198 million increase in collection fees across all of our main segments, as a result of the higher total payment volume of Mercado Pago in those countries; iv) $149 million increase in hosting; and v) $118 million increase in sales taxes.
Our subsidiaries in Brazil, Argentina and Colombia are subject to certain taxes on revenues and financial income, which are classified as a cost of net revenues and financial expenses. These taxes represented 5.8% and 5.5% of net revenues and financial income for the nine and three-month periods ended September 30, 2026, respectively, and 6.6% and 6.4% for the same periods in 2025, respectively.
Gross profit margins
Our gross profit margin is defined as total net revenues and financial income minus total cost of net revenues and financial expenses, as a percentage of net revenues and financial income.
Our cost structure is directly affected by the level of operations of our services, and our strategic plan on gross profit is built on factors such as an ample liquidity to fund expenses and investments and a cost-effective capital structure.
For the nine and three-month periods ended September 30, 2026 and 2025, our gross profit margins were 41.7% and 40.8%, and 45.1% and 43.3%, respectively. The decrease in our gross profit margin was primarily attributable to an increase in our shipping operating costs and our cost of sales of goods as a percentage of net revenues and financial income, partially offset by a decrease in sales taxes, as a percentage of net revenues and financial income. Additionally, for the nine-month period ended September 30, 2026, the decrease is also explained by the reduction of our free shipping threshold in Brazil.
In the future, our gross profit margin could continue declining if we maintain the growth of our first-party business, which has a lower pure product margin due to marketing initiatives, or building up of our logistics network. Our gross profit margin could also decline if we fail to maintain an appropriate relationship between our cost of revenue structure and our net revenues and financial income trend.
Product and technology development expenses
Our product and technology development related expenses consist primarily of compensation for our engineering and web-development staff (including long term retention program compensation), depreciation and amortization expenses related to product and technology development, AI capabilities expenses for internal usage, certain tax withholding related to export duties, telecommunications costs and payments to third-party suppliers who provide technology maintenance services to us. The following table presents product and technology development expenses for the periods indicated:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages)
|
||||||||||||||||||||||||||||||||||||||||||||||
| Product and technology development | $ | 2,173 | $ | 1,685 | $ | 488 | 29.0% | $ | 745 | $ | 567 | $ | 178 | 31.4% | |||||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | 7.3 | % | 8.4 | % | 6.9% | 7.7% | |||||||||||||||||||||||||||||||||||||||||
50 | MercadoLibre, Inc.
For the nine-month period ended September 30, 2026, the increase in product and technology development expenses as compared to the same period in 2025 was primarily attributable to a: i) $193 million increase in technology maintenance and AI expenses; and ii) $172 million increase in salaries and wages.
For the three-month period ended September 30, 2026, the increase in product and technology development expenses as compared to the same period in 2025 was primarily attributable to a: i) $72 million increase in technology maintenance and AI expenses; and ii) $56 million increase in salaries and wages.
We believe that product and technology development is one of our key competitive advantages and we intend to continue to invest in technology and AI capabilities to meet the increasingly sophisticated product expectations of our customer base.
Sales and marketing expenses
Our sales and marketing expenses consist primarily of costs related to marketing our platforms through online and offline advertising and agreements with portals, search engines and other sales expenses related to strategic marketing initiatives, expenses related to our affiliates program, charges related to our buyer protection program, the salaries of employees involved in these activities (including long term retention program compensation), chargebacks related to our Mercado Pago operations, branding initiatives, marketing activities for our users and depreciation and amortization expenses.
We enter into agreements with portals, search engines, social networks, ad networks and other sites in order to attract Internet users to the Mercado Libre Marketplace and convert them into registered users and active traders on our platform.
We also work intensively on attracting, developing and growing our seller community through our customer support efforts. We have dedicated professionals in most of our operations that work with sellers through trade show participation, seminars and meetings to provide them with important tools and skills to become effective sellers on our platform.
The following table presents sales and marketing expenses for the periods indicated:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages)
|
||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 3,356 | $ | 2,183 | $ | 1,173 | 53.7% | $ | 1,243 | $ | 833 | $ | 410 | 49.1% | |||||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | 11.3 | % | 10.8 | % | 11.6 | % | 11.2 | % | |||||||||||||||||||||||||||||||||||||||
For the nine-month period ended September 30, 2026, the increase in sales and marketing expenses as compared to the same period in 2025 was primarily attributable to a: i) $759 million increase in online and offline marketing expenses mainly in Brazil and Mexico; ii) $228 million increase in our buyer protection program expenses; and iii) $131 million increase in salaries and wages mainly related to the increase of 27% in our sales and marketing headcount.
For the three-month period ended September 30, 2026, the increase in sales and marketing expenses as compared to the same period in 2025 was primarily attributable to a: i) $276 million increase in online and offline marketing expenses mainly in Brazil and Mexico; ii) $74 million increase in our buyer protection program expenses; and iii) $40 million increase in salaries and wages mainly related to the increase of 35% in our sales and marketing headcount.
Provision for doubtful accounts
Provision for doubtful accounts consists of the current expected credit losses on our financial assets, mainly loans receivable. The following table presents provision for doubtful accounts expenses for the periods indicated:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages)
|
||||||||||||||||||||||||||||||||||||||||||||||
| Provision for doubtful accounts | $ | 3,862 | $ | 2,108 | $ | 1,754 | 83.2 | % | $ | 1,342 | $ | 815 | $ | 527 | 64.6 | % | |||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | 13.0 | % | 10.5 | % | 12.5 | % | 11.0 | % | |||||||||||||||||||||||||||||||||||||||
For the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, the charge related to the provision for doubtful accounts increased $1,754 million and $527 million, respectively, mainly due to the increase in originations growing at 77% and 70%, respectively (related to the credit cards, consumer and merchant).
51 | MercadoLibre, Inc.
General and administrative expenses
Our general and administrative expenses consist primarily of salaries for management and administrative staff, compensation of non-employee directors, long term retention program compensation, expenses for legal, audit and other professional services, contingencies, insurance expenses, office space rental expenses, changes in the fair value of digital assets, travel and business expenses, as well as depreciation and amortization expenses. Our general and administrative expenses include the costs of the following areas: general management, finance, treasury, internal audit, administration, accounting, tax, legal and human resources. The following table presents general and administrative expenses for the periods indicated:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 1,044 | $ | 786 | $ | 258 | 32.8% | $ | 378 | $ | 270 | $ | 108 | 40.1% | |||||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | 3.5 | % | 3.9 | % | 3.5% | 3.6% | |||||||||||||||||||||||||||||||||||||||||
For the nine-month period ended September 30, 2026, the increase in general and administrative expenses as compared to the same period in 2025 was primarily attributable to a: i) $166 million increase in salaries and wages, which also includes higher recruitment expenses; and ii) $51 million increase in legal, tax and other fees due to higher consulting fees.
For the three-month period ended September 30, 2026, the increase in general and administrative expenses as compared to the same period in 2025 was primarily attributable to a $70 million increase in salaries and wages, which also includes higher recruitment expenses.
Operating income margins
Our operating income margin is defined as income from operations as a percentage of net revenues and financial income.
Our operating income margin is affected by our operating expenses structure, which mainly consists of our employees' salaries, our sales and marketing expenses related to those activities we incurred to promote our services, provision for doubtful accounts mainly related to our loans receivable portfolio and product and technology development expenses, among other operating expenses. As we continue to grow and focus on expanding our leadership in the region, we will continue to invest in sales and marketing in order to promote our services and capture long-term business opportunities as well as the expansion of our credit portfolio, which contributes to the increase in our provision for doubtful accounts. As a result, we may experience decreases in our operating income margins.
For the nine and three-month periods ended September 30, 2026, as compared to the same periods in 2025, our operating income margin decreased from 11.5% and 9.8% to 6.6% and 6.3%, respectively.
This decrease is mainly explained by the increase in our shipping operating costs, our cost of net revenues and financial expenses and our provision for doubtful accounts, driven by the expansion of our credit card portfolio, as a percentage of net revenues and financial income, partially offset by a decrease in product and technology development, as a percentage of net revenues and financial income. Additionally, for the nine-month period ended September 30, 2026, the decrease is also explained by the reduction of our free shipping threshold in Brazil.
Other income (expenses), net
Other income (expenses), net consists primarily of interest income derived from our investments and cash equivalents, interest expense and other financial charges related to financial liabilities not related to Mercado Pago's operations, and foreign currency gains or losses. The following table presents Other income (expenses), net for the periods indicated:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages)
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Other income (expenses), net
|
$ | (184) | $ | (254) | $ | 70 | 27.3% | $ | (75) | $ | (88) | $ | 13 | 12.6% | |||||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | (0.6) | % | (1.3) | % | (0.7) | % | (1.2) | % | |||||||||||||||||||||||||||||||||||||||
For the nine-month period ended September 30, 2026, the decrease in other expense, net as compared to the same period in 2025 was primarily attributable to $163 million lower foreign exchange losses mainly from our Argentine subsidiaries, partially offset by higher foreign exchange losses mainly from our Mexican subsidiaries. This was partially offset by an increase of $75 million in interest expense and other financial losses, mainly attributable to higher levels of indebtedness (mainly in the U.S., Brazil and Argentina).
52 | MercadoLibre, Inc.
For the three-month period ended September 30, 2026, the decrease in other expense, net as compared to the same period in 2025 was primarily attributable to $30 million lower foreign exchange losses mainly from our Argentine subsidiaries, partially offset by higher foreign exchange losses mainly from our Mexican subsidiaries. This was partially offset by an increase of $23 million in interest expense and other financial losses, mainly attributable to higher levels of indebtedness (mainly in the U.S. and Brazil).
Income tax
We are subject to federal and state income tax in the U.S., as well as foreign taxes in the multiple jurisdictions where we operate. Our tax obligations consist of current and deferred income taxes incurred in these jurisdictions. We account for income taxes following the liability method of accounting. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of our deferred tax assets will not be realized. Therefore, our income tax expense consists of taxes currently payable, if any, plus the change in our deferred tax assets and liabilities as a result of the estimated effective tax rate, adjusted for discrete items that are accounted for in the relevant period.
The following table presents our income tax expense for the nine and three-month periods ended September 30, 2026 and 2025:
|
Nine Months Ended September 30, |
Change from 2025 to 2026 |
Three Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||||||||||||||||||||||
|
(In millions, except percentages)
|
(In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | $ | 455 | $ | 620 | $ | (165) | (26.6) | % | $ | 153 | $ | 215 | $ | (62) | (28.9) | % | |||||||||||||||||||||||||||||||
| As a percentage of net revenues and financial income | 1.5 | % | 3.1 | % | 1.4 | % | 2.9 | % | |||||||||||||||||||||||||||||||||||||||
During the nine and three-month periods ended September 30, 2026 as compared to the same periods in 2025, income tax expense decreased mainly as a result of higher income tax gains in Brazil in 2026, driven by the increase in deferred tax assets in that segment, lower income tax expense in Argentina mainly due to lower taxable foreign exchange gains in 2026 accounted for in Argentina for local tax purposes that are not recorded for accounting purposes since, under U.S. GAAP, the Argentine operations' functional currency is the U.S. dollar due to the highly inflationary status of the country. This decrease was partially offset by higher income tax expense due to higher deferred tax liability on retained earnings generated mainly in subsidiaries in Argentina and Brazil. In addition, during the nine-month period ended September 30, 2026, the decrease was also partially offset by higher income tax expense in Mexico mainly related to higher non-deductible expenses during 2026.
The following table summarizes our estimated effective tax rates for the nine and three-month periods ended September 30, 2026 and 2025:
|
Nine Months Ended September 30, |
Three Months Ended September 30, |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Estimated effective tax rate | 25.5% | 30.1% | 25.5% | 33.8% | |||||||||||||||||||
Our estimated effective tax rate for the nine and three-month periods ended September 30, 2026 decreased as compared to the same periods in 2025, mainly as a result of higher non-taxable gains attributable to tax benefits, along with greater tax deductions arising from permanent differences in the Brazilian segment. Additionally, the estimated effective tax rate for the three-month period ended September 30, 2026 decreased due to lower taxable foreign exchange gains in 2026 accounted for in Argentina for local tax purposes that are not recorded for accounting purposes since, under U.S. GAAP, the Argentine operations' functional currency is the U.S. dollar due to the highly inflationary status of the country.
Segment information
Refer to Note 6 - Segments of our unaudited interim condensed consolidated financial statements for further information regarding the financial performance of the Company's reporting segments for the nine and three-month periods ended September 30, 2026 and 2025.
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
| Brazil | Mexico | Argentina | Other Countries | Total | |||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 16,305 | $ | 6,742 | $ | 5,355 | $ | 1,362 | $ | 29,764 | |||||||||||||||||||
| Total segment costs | (14,887) | (5,746) | (3,512) | (1,188) | (25,333) | ||||||||||||||||||||||||
| Direct contribution | $ | 1,418 | $ | 996 | $ | 1,843 | $ | 174 | $ | 4,431 | |||||||||||||||||||
| Margin | 8.7 | % | 14.8 | % | 34.4 | % | 12.8 | % | 14.9% | ||||||||||||||||||||
53 | MercadoLibre, Inc.
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Brazil | Mexico | Argentina | Other Countries | Total | |||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 10,564 | $ | 4,379 | $ | 4,350 | $ | 841 | $ | 20,134 | |||||||||||||||||||
| Total segment costs | (9,006) | (3,589) | (2,469) | (725) | (15,789) | ||||||||||||||||||||||||
| Direct contribution | $ | 1,558 | $ | 790 | $ | 1,881 | $ | 116 | $ | 4,345 | |||||||||||||||||||
| Margin | 14.7 | % | 18.0 | % | 43.2 | % | 13.8 | % | 21.6 | % | |||||||||||||||||||
| Change from the Nine Months Ended September 30, 2025 to September 30, 2026 | |||||||||||||||||||||||||||||
| Brazil | Mexico | Argentina | Other Countries | Total | |||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||
| Net revenues and financial income | |||||||||||||||||||||||||||||
| in U.S. Dollars | $ | 5,741 | $ | 2,363 | $ | 1,005 | $ | 521 | $ | 9,630 | |||||||||||||||||||
| in % | 54.4 | % | 54.0% | 23.1 | % | 61.7% | 47.8% | ||||||||||||||||||||||
| Total segment costs | |||||||||||||||||||||||||||||
| in U.S. Dollars | $ | (5,881) | $ | (2,157) | $ | (1,043) | $ | (463) | $ | (9,544) | |||||||||||||||||||
| in % | 65.3 | % | 60.1% | 42.3 | % | 63.8% | 60.5% | ||||||||||||||||||||||
| Direct contribution | |||||||||||||||||||||||||||||
| in U.S. Dollars | $ | (140) | $ | 206 | $ | (38) | $ | 58 | $ | 86 | |||||||||||||||||||
| in % | (8.9) | % | 26.0% | (2.1) | % | 49.1% | 1.9% | ||||||||||||||||||||||
| Three Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
| Brazil | Mexico | Argentina | Other Countries | Total | |||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 6,001 | $ | 2,429 | $ | 1,818 | $ | 502 | $ | 10,750 | |||||||||||||||||||
| Total segment costs | (5,522) | (2,083) | (1,205) | (457) | (9,267) | ||||||||||||||||||||||||
| Direct contribution | $ | 479 | $ | 346 | $ | 613 | $ | 45 | $ | 1,483 | |||||||||||||||||||
| Margin | 8.0 | % | 14.2 | % | 33.7 | % | 9.1 | % | 13.8 | % | |||||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Brazil | Mexico | Argentina | Other Countries | Total | |||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 4,009 | $ | 1,651 | $ | 1,441 | $ | 308 | $ | 7,409 | |||||||||||||||||||
| Total segment costs | (3,534) | (1,346) | (869) | (265) | (6,014) | ||||||||||||||||||||||||
| Direct contribution | $ | 475 | $ | 305 | $ | 572 | $ | 43 | $ | 1,395 | |||||||||||||||||||
| Margin | 11.8 | % | 18.5 | % | 39.7 | % | 14.0 | % | 18.8 | % | |||||||||||||||||||
54 | MercadoLibre, Inc.
| Change from the Three Months Ended September 30, 2025 to September 30, 2026 | |||||||||||||||||||||||||||||
| Brazil | Mexico | Argentina | Other Countries | Total | |||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||
| Net revenues and financial income | |||||||||||||||||||||||||||||
| in U.S. Dollars | $ | 1,992 | $ | 778 | $ | 377 | $ | 194 | $ | 3,341 | |||||||||||||||||||
| in % | 49.7 | % | 47.1% | 26.1 | % | 63.1% | 45.1% | ||||||||||||||||||||||
| Total segment costs | |||||||||||||||||||||||||||||
| in U.S. Dollars | $ | (1,988) | $ | (737) | $ | (336) | $ | (192) | $ | (3,253) | |||||||||||||||||||
| in % | 56.3 | % | 54.8% | 38.7 | % | 72.0% | 54.1% | ||||||||||||||||||||||
| Direct contribution | |||||||||||||||||||||||||||||
| in U.S. Dollars | $ | 4 | $ | 41 | $ | 41 | $ | 2 | $ | 88 | |||||||||||||||||||
| in % | 0.9 | % | 13.3% | 6.9 | % | 7.8% | 6.3% | ||||||||||||||||||||||
Net revenues and financial income
Net revenues and financial income for the nine and three-month periods ended September 30, 2026 as compared to the same periods in 2025 are described above in "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations-Principal trends in results of operations- Net revenues and financial income."
Segment costs
Brazil
For the nine-month period ended September 30, 2026, as compared to the same period in 2025, segment costs increased mainly driven by a: i) $3,667 million increase in cost of net revenues and financial expenses, mostly attributable to an increase in shipping operating and carrier costs, cost of goods sold as a consequence of an increase in first-party sales, sales taxes, other fintech costs mainly related to higher funding costs in connection with the growth of our lending business and collection fees as a consequence of the higher transactions volume of our Mercado Pago business; ii) $1,253 million increase in provision for doubtful accounts mainly related to our credit cards, consumer and merchant credits product growth; and iii) $741 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses, buyer protection program expenses and salaries and wages.
For the three-month period ended September 30, 2026, as compared to the same period in 2025, segment costs increased mainly driven by a: i) $1,267 million increase in cost of net revenues and financial expenses, mostly attributable to an increase in shipping operating and carrier costs, cost of goods sold as a consequence of an increase in first-party sales, sales taxes, collection fees as a consequence of the higher transactions volume of our Mercado Pago business and other fintech costs mainly related to higher funding costs in connection with the growth of our lending business; ii) $381 million increase in provision for doubtful accounts mainly related to our credit cards, consumer and merchant credits product growth; and iii) $267 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses, buyer protection program expenses and salaries and wages.
Mexico
For the nine-month period ended September 30, 2026, as compared to the same period in 2025, segment costs increased mainly driven by a: i) $1,462 million increase in cost of net revenues and financial expenses, mostly attributable to increases in shipping operating and carrier costs, cost of goods sold as a consequence of an increase in first-party sales and collection fees due to higher Mercado Pago penetration; ii) $356 million increase in provision for doubtful accounts mainly related to our credit card, consumer and merchant product business growth; and iii) $236 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses, sales expenses related to strategic marketing initiatives and buyer protection program expenses.
For the three-month period ended September 30, 2026, as compared to the same period in 2025, segment costs increased mainly driven by a: i) $500 million increase in cost of net revenues and financial expenses, mostly attributable to increases in shipping operating and carrier costs, cost of goods sold as a consequence of an increase in first-party sales and collection fees due to higher Mercado Pago penetration; ii) $136 million increase in provision for doubtful accounts mainly related to our credit card, consumer and merchant product business growth; and iii) $70 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses, sales expenses related to strategic marketing initiatives and buyer protection program expenses.
55 | MercadoLibre, Inc.
Argentina
For the nine-month period ended September 30, 2026, as compared to the same period in 2025, segment costs increased mainly driven by a: i) $730 million increase in cost of net revenues and financial expenses, mostly attributable to an increase in shipping operating and carrier costs, collection fees due to higher Mercado Pago penetration, sales taxes and cost of goods sold as a consequence of an increase in first-party sales; ii) $133 million increase in provision for doubtful accounts mainly related to our consumer product growth; and iii) $77 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses and sales expenses related to strategic marketing initiatives.
For the three-month period ended September 30, 2026, as compared to the same period in 2025, segment costs increased mainly driven by a: i) $266 million increase in cost of net revenues and financial expenses, mostly attributable to an increase in shipping operating and carrier costs, collection fees due to higher Mercado Pago penetration, cost of goods sold as a consequence of an increase in first-party sales and sales taxes; ii) $32 million increase in product and technology development expenses mainly related to salaries and wages and technology maintenance and AI expenses; and iii) $24 million increase in sales and marketing expenses mainly due to an increase in online and offline marketing expenses and sales expenses related to strategic marketing initiatives.
Liquidity and capital resources
Our main cash requirement has been working capital to fund Mercado Pago financing operations and our lending business. We also require cash for capital expenditures related to technology infrastructure, software applications including AI licenses, office space, business acquisitions, to build out our logistics capacity and to make interest payments on our loans payable and other financial liabilities.
We have multiple sources to fund Mercado Pago and our lending business, mainly through the sale of credit card receivables, the securitization of credit card receivables and loans receivable through SPEs, the sale of loans receivable to financial institutions, commercial notes, loans from banks, secured lines of credit and the issuance of debt securities. Moreover, we obtain funding in Brazil by issuing deposit certificates and financial bills through our financial institution. Finally, we entered into a revolving credit agreement, which provides an $800 million credit commitment. Customer funds are not utilized to finance our Mercado Pago financing and lending business. Refer to Note 10 - Loans payable and other financial liabilities and Note 11 - Securitization transactions of our unaudited interim condensed consolidated financial statements for further detail.
We have committed to contract minimum amounts of certain services such as cloud platform and other technology services (including AI capabilities), logistics services and leases. In addition, we have unconditional purchase obligations related to capital expenditures. Please refer to Note 8 - Commitments and Contingencies of our unaudited interim condensed consolidated financial statements for further detail on purchase commitments.
We and certain financial institutions participate in a supplier finance program ("SFP") that enables certain of our suppliers, at their own election, to request the payment of their invoices to the financial institutions earlier than the terms stated in our payment policy. See Note 2 - Summary of significant accounting policies - Supplier finance programs of our unaudited interim condensed consolidated financial statements for further detail.
As of September 30, 2026, our main source of liquidity was $6,902 million of cash and cash equivalents and short-term investments, which excludes $473 million of restricted investments, and consists of cash generated from operations and proceeds from loans.
As of September 30, 2026, cash and cash equivalents, restricted cash and cash equivalents and investments of our non-U.S. subsidiaries amounted to $20,609 million, or 88.1% of our consolidated cash and cash equivalents, restricted cash and cash equivalents and investments, and our cash and cash equivalents, restricted cash and cash equivalents and investments held outside U.S. amounted to 81.2% of our consolidated cash and cash equivalents, restricted cash and cash equivalents and investments. Our non-U.S. dollar-denominated cash and investments are located primarily in Brazil, Mexico and Argentina.
The following table presents our cash flows from operating activities, investing activities and financing activities for the nine-month periods ended September 30, 2026 and 2025:
|
Nine Months Ended September 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (In millions) | |||||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | 8,687 | $ | 6,907 | |||||||
| Investing activities | (7,708) | (4,178) | |||||||||
| Financing activities | 3,810 | 1,522 | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents | 395 | 249 | |||||||||
| Net increase in cash, cash equivalents, restricted cash and cash equivalents | $ | 5,184 | $ | 4,500 | |||||||
56 | MercadoLibre, Inc.
Net cash provided by operating activities
|
Nine Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
| Net cash provided by: | |||||||||||||||||||||||
| Operating activities | $ | 8,687 | $ | 6,907 | $ | 1,780 | 25.8 | % | |||||||||||||||
Net cash provided by operating activities in the nine-month period ended September 30, 2026 resulted mainly from an increase of $3,816 million in funds payable to customers, adjustments to net income related to non-cash items of $3,643 million, a $1,648 million increase in amounts payable due to credit and debit card transactions and an increase of $1,612 million in payables and accrued expenses, partially offset by an increase in receivables of $2,173 million. The $1,780 million increase in the net cash provided by operating activities in the nine-month period ended September 30, 2026, as compared to the same period in 2025, is mainly explained by the higher increase in funds payable to customers of $1,209 million, the increase of $1,141 million in the adjustments to net income related to non-cash items, the higher increase in payables and accrued expenses of $894 million and the $882 million higher increase in amounts payable due to credit and debit card transactions, partially offset by the $1,070 million higher increase in receivables.
Net cash used in investing activities
|
Nine Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
| Net cash used in: | |||||||||||||||||||||||
| Investing activities | $ | (7,708) | $ | (4,178) | $ | (3,530) | 84.5 | % | |||||||||||||||
Net cash used in investing activities in the nine-month period ended September 30, 2026 resulted mainly from the use of $6,212 million related to changes in loans receivable due to loans granted under our lending solution net of collections and $1,215 million in the investments of property and equipment (mainly related to our shipping network and information technology assets). The $3,530 million increase in net cash used in investing activities in the nine-month period ended September 30, 2026, as compared to the same period in 2025, is mainly explained by the $1,626 million higher increase in our loans receivable due to loans granted under our lending solution net of collections, and the $1,512 million variation in cash flows from investments ($153 million of cash outflows from net purchases of investments in the nine-month period ended September 30, 2026, compared to $1,359 million of cash inflows from sales or maturity of investments in the same period in 2025).
Net cash provided by financing activities
|
Nine Months Ended September 30, |
Change from 2025 to 2026 | ||||||||||||||||||||||
| 2026 | 2025 | in Dollars | in % | ||||||||||||||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
|
Net cash provided by:
|
|||||||||||||||||||||||
| Financing activities | $ | 3,810 | $ | 1,522 | $ | 2,288 | 150.4 | % | |||||||||||||||
For the nine-month period ended September 30, 2026, our net cash provided by financing activities resulted from $3,860 million provided by net loans payables and other financing liabilities, partially offset by $49 million used for the payments of finance lease obligations. The $2,288 million increase in net cash provided by financing activities in the nine-month period ended September 30, 2026, as compared to the same period in 2025, is mainly explained by the increase of $2,297 million of the cash provided by net loans payables and other financing liabilities.
Debt
Debt Securities Guaranteed by Subsidiaries
On January 14, 2021, we issued $400 million aggregate principal amount of 2.375% Sustainability Notes due 2026 (the "2026 Sustainability Notes") and $700 million aggregate principal amount of 3.125% Notes due 2031 (the "2031 Notes"). On December 9, 2025, we issued $750 million aggregate principal amount of 4.900% Notes due 2033 (the "2033 Notes"). On September 14, 2026, we issued $1,000 million aggregate principal amount of 5.850% Notes due 2036 (the "2036 Notes" and, together with the 2031 Notes and the 2033 Notes, the "Notes"). The 2026 Sustainability Notes matured on January 14, 2026; the total outstanding principal and interest, totaling $367 million, was fully repaid that month. The 2031 Notes mature on January 14, 2031, with interest payments scheduled semi-annually every January 14 and July 14. The 2033 Notes mature on January 15, 2033, with interest payments scheduled semi-annually every January 15 and July 15, commencing July 15, 2026. The 2036 Notes mature on September 14, 2036, with interest payments scheduled semi-annually every March 14 and September 14, commencing March 14, 2027.
57 | MercadoLibre, Inc.
The payment of principal, premium, if any, interest, and all other amounts in respect of the Notes, is fully and unconditionally guaranteed (the "Subsidiary Guarantees"), jointly and severally, on an unsecured basis, by MercadoLibre S.R.L., Mercado Livre Brasil Ltda. (known as eBazar.com.br Ltda. until July 1, 2026 when it changed its corporate name), DeRemate.com de México, S. de R.L. de C.V., MP Agregador, S. de R.L. de C.V., MercadoLibre Chile Ltda., and MercadoLibre Colombia Ltda. (collectively, the "Subsidiary Guarantors"). On September 30, 2026, MPFS, S. de R.L. de C.V. was released from its Subsidiary Guaranty pursuant to the terms of the indenture governing the Notes.
The Notes rank equally in right of payment with all of the Company's other existing and future senior unsecured debt obligations. Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor's other existing and future senior unsecured debt obligations, except for statutory priorities under applicable local law.
Under the indenture governing the Notes, the Subsidiary Guarantee of a Subsidiary Guarantor will terminate upon: (i) the sale, exchange, disposition or other transfer (including by way of consolidation or merger) of the Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of the Subsidiary Guarantor (other than to the Company or a Subsidiary) otherwise permitted by the indenture, (ii) satisfaction of the requirements for legal or covenant defeasance or discharge of the Notes, (iii) the release or discharge of the guarantee by such Subsidiary Guarantor of the Triggering Indebtedness (as defined in the applicable indenture) or the repayment of the Triggering Indebtedness, in each case, that resulted in the obligation of such Subsidiary to become a Subsidiary Guarantor, provided that in no event shall the Subsidiary Guarantee of an initial subsidiary guarantor terminate pursuant to this provision, or (iv) such Subsidiary Guarantor becoming an Excluded Subsidiary (as defined in the applicable indenture) or ceasing to be a Subsidiary.
We may, at our option, redeem or purchase the 2031 Notes, in whole or in part, at any time or from time to time prior to October 14, 2030 (the date that is three months prior to the maturity of the 2031 Notes), the 2033 Notes, in whole or in part, at any time or from time to time prior to November 15, 2032 (the date that is two months prior to the maturity of the 2033 Notes), and the 2036 Notes, in whole or in part, at any time or from time to time prior to June 14, 2036 (the date that is three months prior to the maturity of the 2036 Notes), in each case, by paying 100% of the principal amount of such Notes so redeemed plus the applicable "make-whole" amount and accrued and unpaid interest and additional amounts, if any. We may, at our option, redeem the 2031 Notes on October 14, 2030 or at any time thereafter, the 2033 Notes on November 15, 2032 or at any time thereafter, and the 2036 Notes on June 14, 2036 or at any time thereafter, in each case at the redemption price of 100% of the principal amount of such Notes so redeemed plus accrued and unpaid interest and additional amounts, if any. If we experience certain change of control triggering events, we may be required to offer to purchase the Notes at 101% of their principal amount plus any accrued and unpaid interest thereon through the purchase date.
During the three-month period ended September 30, 2025, we did not repurchase Notes. During the nine-month period ended September 30, 2025, we repurchased $13 million in principal amount of the outstanding 2031 Notes. The total amount paid amounted to $12 million. During the nine and three-month periods ended September 30, 2026, the Company did not repurchase any Notes.
See Note 10 - Loans payable and other financial liabilities of our unaudited interim condensed consolidated financial statements for further detail.
We are presenting the following summarized financial information for the issuer, the Subsidiary Guarantors, Mercado Pago Instituição de Pagamento Ltda., which was a guarantor of the 2031 Notes and the 2033 Notes up to April 28, 2026 and MPFS, S. de R.L. de C.V., which was a guarantor of the 2031 Notes and the 2033 Notes up to September 30, 2026 (together, the "Obligor Group") pursuant to Rule 13-01 of Regulation S-X, Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. For purposes of the following summarized financial information, transactions between the Company and the Subsidiary Guarantors, presented on a combined basis, have been eliminated. Financial information for the non-guarantor subsidiaries, and any investment in a non-guarantor subsidiary by the Company or by any Subsidiary Guarantor, have been excluded. Amounts due from, due to and transactions with the non-guarantor subsidiaries and other related parties, as applicable, have been separately presented in footnotes.
Summarized balance sheet information for the Obligor Group as of September 30, 2026 and December 31, 2025 is provided in the table below:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In millions) | |||||||||||
|
Current assets (1) (2)
|
$ | 9,114 | $ | 24,254 | |||||||
|
Non-current assets (3)
|
7,934 | 6,939 | |||||||||
|
Current liabilities (4)
|
10,322 | 23,971 | |||||||||
| Non-current liabilities | 5,381 | 4,076 | |||||||||
(1) Includes restricted cash and cash equivalents of $354 million and $8,259 million as of September 30, 2026, and December 31, 2025, respectively, and guarantees in short-term investments of $860 million as of December 31, 2025.
(2) Includes Current assets with non-guarantor subsidiaries of $1,562 million and $1,439 million as of September 30, 2026, and December 31, 2025, respectively.
(3) Includes Non-current assets with non-guarantor subsidiaries of $40 million and $289 million as of September 30, 2026, and December 31, 2025, respectively.
(4) Includes Current liabilities with non-guarantor subsidiaries of $667 million and $2,417 million as of September 30, 2026, and December 31, 2025, respectively.
58 | MercadoLibre, Inc.
Summarized statement of income information for the Obligor Group for the nine-month period ended September 30, 2026, is provided in the table below:
| September 30, 2026 | ||||||||
| (In millions) | ||||||||
|
Net revenues and financial income (1)
|
$ | 21,711 | ||||||
|
Gross profit (2)
|
6,267 | |||||||
|
Income from operations (3)
|
419 | |||||||
|
Net income (4)
|
623 | |||||||
(1) Includes net revenues and financial income from transactions with non-guarantor subsidiaries of $1,017 million for the nine-month period ended September 30, 2026.
(2) Includes charges from transactions with non-guarantor subsidiaries of $1,703 million for the nine-month period ended September 30, 2026.
(3) In addition to the charges included in Gross profit, Income from operations includes charges from transactions with non-guarantor subsidiaries of $763 million for the nine-month period ended September 30, 2026.
(4) Includes other income/(expense), net from transactions with non-guarantor subsidiaries of $43 million gain for the nine-month period ended September 30, 2026. Additionally, includes dividends received by the issuer from non-guarantor subsidiaries, that relates to guarantor subsidiaries results.
Capital expenditures
Our capital expenditures comprised of our investments in property and equipment (such as certain assets used in our fulfillment centers and offices) and intangible assets (excluding digital assets) for the nine-month periods ended September 30, 2026 and 2025 amounted to $1,215 million and $900 million, respectively.
During the nine-month period ended September 30, 2026, we invested $323 million in information and technology assets in Brazil, Mexico and Argentina, and $804 million in shipping premises, offices and other assets in Brazil, Mexico and Argentina.
We are continually increasing our level of investment in hardware and software licenses necessary to improve and update our platform's technology and computer software developed internally. We anticipate continued investments in capital expenditures related to information technology and logistics network capacity in the future as we strive to maintain our position in the Latin American e-commerce and fintech market.
We believe that our existing cash and cash equivalents, including the sale of credit card receivables, short-term investments and cash generated from operations, will be sufficient to fund our operating activities, property and equipment expenditures and to pay or repay obligations in the foreseeable future.
59 | MercadoLibre, Inc.
Other data
The following table includes eight key performance indicators, which are calculated as defined in the footnotes to the table. We continuously assess the adequacy of our key performance indicators based on the growth and ever changing nature of our business. Each of these indicators provides a different measure of the level of activity on our ecosystem, which we use to monitor the performance of the business.
| Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
|
(In millions, except percentages) (1)
|
(In millions, except percentages) (1)
|
||||||||||||||||||||||
|
Fintech monthly active users (2)
|
93 | 72 | 93 | 72 | |||||||||||||||||||
|
Unique active buyers (3)
|
128 | 107 | 94 | 77 | |||||||||||||||||||
|
Gross merchandise volume (4)
|
$ | 63,694 | $ | 45,131 | $ | 22,818 | $ | 16,543 | |||||||||||||||
|
Number of items sold (5)
|
2,384 | 1,677 | 867 | 635 | |||||||||||||||||||
|
Total payment volume (6)
|
$ | 296,939 | $ | 194,129 | $ | 108,801 | $ | 71,224 | |||||||||||||||
|
Acquiring total payments volume (7)
|
$ | 188,351 | $ | 132,394 | $ | 68,279 | $ | 47,712 | |||||||||||||||
|
Total payment transactions (8)
|
15,477 | 10,964 | 5,656 | 4,013 | |||||||||||||||||||
|
NIMAL (9)
|
19.7 | % | 22.0 | % | 20.1 | % | 21.0 | % | |||||||||||||||
| Capital expenditures | $ | 1,215 | $ | 900 | $ | 503 | $ | 357 | |||||||||||||||
| Depreciation and amortization | $ | 844 | $ | 580 | $ | 306 | $ | 209 | |||||||||||||||
(1) Growth calculations based on this table may not total due to rounding.
(2) Fintech monthly active users is defined as Fintech payers and/or collectors that, during the last month of the reporting period, performed at least one of the following actions during such month: 1) made a debit or credit card payment, 2) made a QR code payment, 3) made an off-platform online payment using our checkout or link of payment solutions while logged in to our Mercado Pago fintech platform, 4) made an investment or employed any of our savings solutions, 5) has an active insurance policy, 6) has an outstanding loan up to date or non-performing below 90 days, or 7) received the payment from a sale or transaction either on or off marketplace.
(3) Unique active buyers is defined as users that have performed at least one purchase on the Mercado Libre Marketplace during the reported period. From the second quarter of 2025 onwards, we have included food delivery transactions in the current indicator.
(4) Total U.S. dollar sum of all transactions completed through the Mercado Libre Marketplace, excluding Classifieds transactions. From the second quarter of 2025 onwards, we have included food delivery transactions in the current indicator.
(5) Number of items that were sold/purchased through the Mercado Libre Marketplace, excluding Classifieds items. From the second quarter of 2025 onwards, we have included food delivery transactions in the current indicator.
(6) Total U.S. dollar sum of all transactions paid for using Mercado Pago, including marketplace and non-marketplace transactions, excluding peer-to-peer transactions.
(7) Total U.S. dollar sum of all transactions settled using our Mercado Pago and Mercado Pago's payment processing and settling services in marketplace and non-marketplace transactions and consist of the following transactions volume: 1) point of sale payment volume, 2) commerce payment volume through our Mercado Libre Marketplace, 3) online payment volume through our checkout or link payment solution for merchants, and 4) QR code payment volume.
(8) Number of all transactions paid for using Mercado Pago, excluding peer-to-peer transactions.
(9) Net interest margins after losses ("NIMAL") represents the annualized ratio between the total credits revenues (excluding the results of sale of loans receivables) less funding costs and provision for doubtful accounts for the period (excluding the results of sale of loans receivables) and total average gross loans receivable for the period. Management uses NIMAL to monitor how effective our pricing is and managing the credit products relative to their risk and setting targets. Accordingly, Management is of the opinion that NIMAL provides useful information to investors and others related to our risk appetite through the different periods and shows how we effectively prices risk.
60 | MercadoLibre, Inc.
Non-GAAP Measures of Financial Performance
To supplement our unaudited interim condensed consolidated financial statements presented in accordance with U.S. GAAP, we present earnings before interest income and other financial gains, net, interest expense and other financial losses, foreign currency gains (losses), net, income tax expense and depreciation and amortization ("Adjusted EBITDA"), net debt, foreign exchange ("FX") neutral measures, adjusted free cash flow and net (decrease) increase in available cash, investments and digital assets as non-GAAP measures. Reconciliations of these non-GAAP financial measures to the most comparable U.S. GAAP financial measures can be found in the tables below.
These non-GAAP measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. These non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the most comparable U.S. GAAP financial measures.
We believe that reconciliation of these non-GAAP measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that represents our net income, adjusted to eliminate the effect of depreciation and amortization charges, interest income and other financial gains, net, interest expense and other financial losses, foreign currency losses, net and income tax expense. We have included this non-GAAP financial measure because it is used by our Management to evaluate our operating performance and trends, make strategic decisions and calculate leverage ratios. Accordingly, we believe this measure provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our Management. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain items.
The following table presents a reconciliation of net income to Adjusted EBITDA for the periods indicated:
|
Nine Months Ended September 30, |
Three Months Ended September 30, |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In millions) | (In millions) | ||||||||||||||||||||||
| Net income | $ | 1,331 | $ | 1,438 | $ | 448 | $ | 421 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization | 844 | 580 | 306 | 209 | |||||||||||||||||||
| Interest income and other financial gains, net | (112) | (130) | (55) | (49) | |||||||||||||||||||
| Interest expense and other financial losses | 185 | 110 | 58 | 35 | |||||||||||||||||||
| Foreign currency losses, net | 111 | 274 | 72 | 102 | |||||||||||||||||||
| Income tax expense | 455 | 620 | 153 | 215 | |||||||||||||||||||
| Adjusted EBITDA | $ | 2,814 | $ | 2,892 | $ | 982 | $ | 933 | |||||||||||||||
Net debt
We define net debt as total debt which includes current and non-current loans payable and other financial liabilities and current and non-current operating lease liabilities, less cash and cash equivalents (excluding cash and cash equivalents restricted due to management restriction policies), short-term investments and long-term investments, excluding time deposits, foreign debt securities and foreign government debt securities restricted and held in guarantee, securitization transactions and equity securities held at cost. We have included this non-GAAP financial measure because it is used by our Management to analyze our current leverage ratios and set targets to be met, which will also impact other components of the Company's balance sheet, cash flows and income statement. Accordingly, we believe this measure provides useful information to investors and other market participants in showing the evolution of the Company's indebtedness and its capability of repayment as a means to, alongside other measures, monitor our leverage based on widely-used measures.
61 | MercadoLibre, Inc.
The following table presents a reconciliation of net debt for each of the periods indicated:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In millions) | |||||||||||
| Current Loans payable and other financial liabilities | $ | 6,909 | $ | 4,623 | |||||||
| Non-current Loans payable and other financial liabilities | 6,281 | 4,570 | |||||||||
| Current Operating lease liabilities | 599 | 430 | |||||||||
| Non-current Operating lease liabilities | 2,365 | 1,769 | |||||||||
| Total debt | 16,154 | 11,392 | |||||||||
| Less: | |||||||||||
|
Cash and cash equivalents (1)
|
4,010 | 3,410 | |||||||||
|
Short-term investments (2)
|
2,740 | 1,614 | |||||||||
|
Long-term investments (3)
|
1,376 | 1,686 | |||||||||
|
Cash and cash equivalents(1), short-term investments(2) and long-term investments(3)
|
8,126 | 6,710 | |||||||||
| Net debt | $ | 8,028 | $ | 4,682 | |||||||
(1) Includes cash and cash equivalents (excluding cash and cash equivalents restricted due to management restriction policies).
(2) Excludes time deposits, foreign debt securities and foreign government debt securities restricted and held in guarantee.
(3) Excludes foreign government debt securities restricted and held in guarantee, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost.
FX neutral
We believe that FX neutral measures provide useful information to both Management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.
The FX neutral measures were calculated by using the average monthly exchange rates for each month during 2025 and applying them to the corresponding months in 2026, so as to calculate what our results would have been had exchange rates remained stable from one year to the next. The table below excludes intercompany allocation FX effects. Finally, these measures do not include any other macroeconomic effect such as local currency inflation effects, the impact on impairment calculations or any price adjustment to compensate local currency inflation or devaluations.
62 | MercadoLibre, Inc.
The following table sets forth the FX neutral measures related to our reported results of the operations for the nine and three-month periods ended September 30, 2026:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| As reported |
Percentage Change |
FX Neutral Measures | As reported |
Percentage Change |
||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 29,764 | $ | 20,134 | 47.8 | % | $ | 28,770 | $ | 20,134 | 42.9 | % | ||||||||||||||||||||||||||
| Cost of net revenues and financial expenses | (17,359) | (11,060) | 57.0 | % | (16,638) | (11,060) | 50.4 | % | ||||||||||||||||||||||||||||||
| Gross profit | 12,405 | 9,074 | 36.7 | % | 12,132 | 9,074 | 33.7 | % | ||||||||||||||||||||||||||||||
| Operating expenses | (10,435) | (6,762) | 54.3 | % | (10,067) | (6,762) | 48.9 | % | ||||||||||||||||||||||||||||||
| Income from operations | $ | 1,970 | $ | 2,312 | (14.8) | % | $ | 2,065 | $ | 2,312 | (10.7) | % | ||||||||||||||||||||||||||
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| As reported |
Percentage Change |
FX Neutral Measures | As reported |
Percentage Change |
||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||
| Net revenues and financial income | $ | 10,750 | $ | 7,409 | 45.1 | % | $ | 10,432 | $ | 7,409 | 40.8 | % | ||||||||||||||||||||||||||
| Cost of net revenues and financial expenses | (6,366) | (4,200) | 51.6 | % | (6,155) | (4,200) | 46.5 | % | ||||||||||||||||||||||||||||||
| Gross profit | 4,384 | 3,209 | 36.6 | % | 4,277 | 3,209 | 33.3 | % | ||||||||||||||||||||||||||||||
| Operating expenses | (3,708) | (2,485) | 49.2 | % | (3,583) | (2,485) | 44.2 | % | ||||||||||||||||||||||||||||||
| Income from operations | $ | 676 | $ | 724 | (6.5) | % | $ | 694 | $ | 724 | (4.0) | % | ||||||||||||||||||||||||||
See Note 2 - Summary of significant accounting policies - Foreign currency translation of our unaudited interim condensed consolidated financial statements for further details.
63 | MercadoLibre, Inc.
Adjusted free cash flow and Net (decrease) increase in available cash, investments and digital assets
Adjusted free cash flow
Adjusted free cash flow represents cash from operating activities less the increase (decrease) in cash and cash equivalents and investments related to customer funds due to regulatory requirements and other restrictions and equity securities held at cost, investments in property and equipment and intangible assets, changes in loans receivable, net and net proceeds from/payments on loans payable and other financial liabilities related to our Fintech solutions, since we consider those liabilities as the working capital of the Fintech activities. From the second quarter of 2025 onwards, we have also included increase (decrease) in cash and cash equivalents and investments restricted due to management restriction policies and digital assets as an adjustment in the calculation of our adjusted free cash flow. We consider adjusted free cash flow to be a measure of liquidity generation that provides useful information to management and investors since it shows how much cash the Company generates with its core activities that can be used for discretionary purposes and to repay its corporate and/or commerce debt. A limitation of the utility of adjusted free cash flow as a measure of liquidity generation is that it is a partial representation of the total increase or decrease in our available cash, investments and digital assets balance for the period. Therefore, we believe it is important to view the adjusted free cash flow measure only as a complement to our entire consolidated statements of cash flows.
Net (decrease) increase in available cash, investments and digital assets
Net (decrease) increase in available cash, investments and digital assets represents adjusted free cash flow less net proceeds from/payments on loans payable and other financial liabilities, related to our Commerce and corporate activities, payments of finance lease obligations, other investing and/or financing activities not considered above and the effect of exchange rates changes on available cash and investments. We consider Net (decrease) increase in available cash, investments and digital assets to be a measure of liquidity availability that provides useful information to management and investors after netting out all other debt and corporate payments and activities from the adjusted free cash flow.
The following table shows a reconciliation of Net cash provided by operating activities to Adjusted free cash flow and Net (decrease) increase in available cash, investments and digital assets:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In millions) | |||||||||||
| Net cash provided by operating activities ("CFO") | $ | 8,687 | $ | 6,907 | |||||||
|
Adjustments to reconcile CFO to Adjusted free cash flow (1)
|
38 | 70 | |||||||||
| Increase in cash and cash equivalents and investments related to customer funds due to regulatory requirements and other restrictions (including management restriction policies) and equity securities held at cost | (3,574) | (2,528) | |||||||||
| Investments in property and equipment and intangible assets | (1,215) | (900) | |||||||||
| Changes in loans receivable, net | (6,212) | (4,586) | |||||||||
| Proceeds from loans payable and other financial liabilities related to our Fintech solutions, net | 2,719 | 1,755 | |||||||||
| Adjusted free cash flow | 443 | 718 | |||||||||
| Proceeds from (payments on) loans payable and other financial liabilities, related to our Commerce and Corporate activities, net | 974 | (232) | |||||||||
| Other investing and/or financing activities | (11) | (36) | |||||||||
| Effect of exchange rate changes on available cash and investments | 10 | 219 | |||||||||
| Net increase in available cash, investments and digital assets | $ | 1,416 | $ | 669 | |||||||
|
Available cash, investments and digital assets (2), at the beginning of the period
|
6,710 | 4,603 | |||||||||
|
Available cash, investments and digital assets (2), at the end of the period
|
8,126 | 5,272 | |||||||||
| Net cash used in investing activities | (7,708) | (4,178) | |||||||||
| Net cash provided by financing activities | 3,810 | 1,522 | |||||||||
(1) Includes accrued interest and financial income net of interest received from available and restricted investments, and results on digital assets.
(2) Includes cash and cash equivalents (excluding cash and cash equivalents restricted due to management restriction policies), short-term investments (excluding time deposits, foreign debt securities and foreign government debt securities restricted and held in guarantee) and long-term investments (excluding foreign government debt securities restricted and held in guarantee, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost) and digital assets.
64 | MercadoLibre, Inc.
MercadoLibre Inc. published this content on November 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 05, 2026 at 11:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]