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MercadoLibre (MELI) Up 8.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for MercadoLibre (MELI - Free Report) . Shares have added about 8.8% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is MercadoLibre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
MercadoLibre reported second-quarter 2026 earnings of $9.19 per share, which beat the Zacks Consensus Estimate of $8.69 per share by 5.75% and declined 10.86% year over year from $10.31 per share in the year-ago quarter. Revenues rose 49.76% on a year-over-year basis (43% on a foreign-exchange-neutral basis) to $10.17 billion, surpassing the Zacks Consensus Estimate by 4.07%.
Commerce and fintech revenues grew 50% and 49% year over year on a reported basis, respectively. Brazil delivered foreign-exchange-neutral GMV growth of 39% year over year, Mexico posted 26% amid tax reform headwinds, and Argentina delivered 38% against a challenging consumption environment. Advertising revenues rose 62% year over year on a foreign-exchange-neutral basis, with MELI surpassing a 10% share of Latin America's digital advertising market for the first time.
MELI’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with an average surprise of 107.32%.
MELI’s Q2 in Detail
Brazil: Net revenues in the second quarter reached $5,530 million (54.39% of total revenues), up 59% year over year on a reported basis, aided by currency tailwinds, credit card portfolio expansion and robust advertising uptake. On a foreign exchange neutral basis, growth was 42%.
Mexico: The market generated revenues of $2,337 million (22.98% of total revenues), increasing 55% year over year on a reported basis and 38% on a foreign exchange neutral basis. Growth continued to be tempered by the tax reform headwind flagged in the prior quarter, along with a softer macroeconomic environment.
Argentina: Net revenues in the reported quarter were $1,839 million (18.09% of total revenues), reflecting an increase of 20% year over year on a reported basis, as currency movements acted as a headwind. On a foreign exchange neutral basis, growth was 48%.
Other countries: These markets generated revenues of $463 million (4.55% of total revenues), representing growth of 63.03% on a year-over-year basis, with cross-border trade continuing to contribute meaningfully to assortment depth.
Key Metrics for MELI
Gross Merchandise Volume of $21.9 billion increased 44% year over year and 36% on a foreign exchange neutral basis.
The number of successful items sold was 795 million, up 44.55% year over year. Unique buyer growth was 25.35% year over year, with the number reaching 89 million. Items sold per unique active buyer reached 8.9, growing 14% year over year, led by Brazil, where the metric grew 19% year over year.
Fintech Monthly Active Users rose 29.41% year over year to 88 million. Assets Under Management grew 68% year over year to $23 billion, with AUM per user reaching $264, up 29% year over year. The credit portfolio expanded 75% year over year to $16.4 billion, with credit exposure per user in the consumer and credit card portfolios reaching $231 and $446, growing 34% and 20% year over year, respectively.
Total Payment Volume rose 56% year over year and 56% on a foreign exchange neutral basis to $101 billion. Acquiring Total Payment Volume grew 44% year over year to $64.1 billion, with foreign exchange neutral growth of 42%.
Total payment transactions increased 43.65% year over year to 5,181 million.
The credit portfolio reached $16.4 billion, growing 75% year over year. The credit card issued 2.6 million new cards in the quarter, up from 1.6 million cards a year ago. Asset quality remained solid, with the 15 to 90 day non-performing loan ratio at 7% for the total portfolio and 4.6% for the credit card specifically, both close to historic lows.
MercadoLibre’s Operating Details
In the second quarter, gross margin contracted approximately 468 basis points on a year-over-year basis to 40.9%, primarily reflecting pricing and supply initiatives in Brazil, higher shipping costs and increased device costs in Acquiring, particularly in Mexico.
Total operating expenses were $3,476 million, increasing 53.2% year over year. Income from operations declined 17% year over year to $683 million, with the operating margin contracting 550 basis points to 6.7%, as MELI continued to prioritize investment in free shipping, the credit card, first-party inventory, cross-border trade and user acquisition in Acquiring.
Product development expenses scaled favorably from 8.4% of revenues in the second quarter of 2025 to 7.2% in the reported quarter, reflecting productivity gains from AI adoption across the engineering organization. AI investment grew roughly $80 million year over year in the quarter, split between cost of goods sold and product development.
Net Interest Margin After Losses declined to 20.7% from 23% in the second quarter of 2025, driven primarily by a shift in mix toward the lower-spread credit card, which rose from 43% to 47% of the total portfolio. Credit card NIMAL compressed from breakeven in the year-ago quarter to negative 2.5%, reflecting the step-up in issuance rather than any deterioration in asset quality.
Balance Sheet of MELI
As of June 30, 2026, cash and cash equivalents were $3,649 million, down slightly from $3.68 billion as of March 31, 2026.
Short-term investments were $2,081 million as of June 30, 2026, compared to $1.97 billion as of March 31, 2026, an increase of 5.63%. Net debt increased to $6,425 million at the end of the quarter from $5.75 billion as of March 31, 2026, reflecting continued funding of Mercado Pago's credit operations, including $2.1 billion deployed into loan book growth during the quarter, partially offset by $560 million in fintech funding.
Total loans receivable, net of allowances, stood at $11,996 million compared to $10.74 billion as of March 31, 2026, an increase of 11.72%. Adjusted free cash flow was $214 million, improving from negative $56 million in the first quarter of 2026, even after absorbing $441 million of capital expenditure, consistent with the seasonal normalization of cash generation following the first quarter's seasonal weakness.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, MercadoLibre has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MercadoLibre has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
View the Zacks #1 Rank List
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MercadoLibre (MELI) Up 8.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for MercadoLibre (MELI - Free Report) . Shares have added about 8.8% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is MercadoLibre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
MercadoLibre’s Q2 Earnings Beat Estimates, Revenues Rise Y/Y
MercadoLibre reported second-quarter 2026 earnings of $9.19 per share, which beat the Zacks Consensus Estimate of $8.69 per share by 5.75% and declined 10.86% year over year from $10.31 per share in the year-ago quarter. Revenues rose 49.76% on a year-over-year basis (43% on a foreign-exchange-neutral basis) to $10.17 billion, surpassing the Zacks Consensus Estimate by 4.07%.
Commerce and fintech revenues grew 50% and 49% year over year on a reported basis, respectively. Brazil delivered foreign-exchange-neutral GMV growth of 39% year over year, Mexico posted 26% amid tax reform headwinds, and Argentina delivered 38% against a challenging consumption environment. Advertising revenues rose 62% year over year on a foreign-exchange-neutral basis, with MELI surpassing a 10% share of Latin America's digital advertising market for the first time.
MELI’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with an average surprise of 107.32%.
MELI’s Q2 in Detail
Brazil: Net revenues in the second quarter reached $5,530 million (54.39% of total revenues), up 59% year over year on a reported basis, aided by currency tailwinds, credit card portfolio expansion and robust advertising uptake. On a foreign exchange neutral basis, growth was 42%.
Mexico: The market generated revenues of $2,337 million (22.98% of total revenues), increasing 55% year over year on a reported basis and 38% on a foreign exchange neutral basis. Growth continued to be tempered by the tax reform headwind flagged in the prior quarter, along with a softer macroeconomic environment.
Argentina: Net revenues in the reported quarter were $1,839 million (18.09% of total revenues), reflecting an increase of 20% year over year on a reported basis, as currency movements acted as a headwind. On a foreign exchange neutral basis, growth was 48%.
Other countries: These markets generated revenues of $463 million (4.55% of total revenues), representing growth of 63.03% on a year-over-year basis, with cross-border trade continuing to contribute meaningfully to assortment depth.
Key Metrics for MELI
Gross Merchandise Volume of $21.9 billion increased 44% year over year and 36% on a foreign exchange neutral basis.
The number of successful items sold was 795 million, up 44.55% year over year. Unique buyer growth was 25.35% year over year, with the number reaching 89 million. Items sold per unique active buyer reached 8.9, growing 14% year over year, led by Brazil, where the metric grew 19% year over year.
Fintech Monthly Active Users rose 29.41% year over year to 88 million. Assets Under Management grew 68% year over year to $23 billion, with AUM per user reaching $264, up 29% year over year. The credit portfolio expanded 75% year over year to $16.4 billion, with credit exposure per user in the consumer and credit card portfolios reaching $231 and $446, growing 34% and 20% year over year, respectively.
Total Payment Volume rose 56% year over year and 56% on a foreign exchange neutral basis to $101 billion. Acquiring Total Payment Volume grew 44% year over year to $64.1 billion, with foreign exchange neutral growth of 42%.
Total payment transactions increased 43.65% year over year to 5,181 million.
The credit portfolio reached $16.4 billion, growing 75% year over year. The credit card issued 2.6 million new cards in the quarter, up from 1.6 million cards a year ago. Asset quality remained solid, with the 15 to 90 day non-performing loan ratio at 7% for the total portfolio and 4.6% for the credit card specifically, both close to historic lows.
MercadoLibre’s Operating Details
In the second quarter, gross margin contracted approximately 468 basis points on a year-over-year basis to 40.9%, primarily reflecting pricing and supply initiatives in Brazil, higher shipping costs and increased device costs in Acquiring, particularly in Mexico.
Total operating expenses were $3,476 million, increasing 53.2% year over year. Income from operations declined 17% year over year to $683 million, with the operating margin contracting 550 basis points to 6.7%, as MELI continued to prioritize investment in free shipping, the credit card, first-party inventory, cross-border trade and user acquisition in Acquiring.
Product development expenses scaled favorably from 8.4% of revenues in the second quarter of 2025 to 7.2% in the reported quarter, reflecting productivity gains from AI adoption across the engineering organization. AI investment grew roughly $80 million year over year in the quarter, split between cost of goods sold and product development.
Net Interest Margin After Losses declined to 20.7% from 23% in the second quarter of 2025, driven primarily by a shift in mix toward the lower-spread credit card, which rose from 43% to 47% of the total portfolio. Credit card NIMAL compressed from breakeven in the year-ago quarter to negative 2.5%, reflecting the step-up in issuance rather than any deterioration in asset quality.
Balance Sheet of MELI
As of June 30, 2026, cash and cash equivalents were $3,649 million, down slightly from $3.68 billion as of March 31, 2026.
Short-term investments were $2,081 million as of June 30, 2026, compared to $1.97 billion as of March 31, 2026, an increase of 5.63%. Net debt increased to $6,425 million at the end of the quarter from $5.75 billion as of March 31, 2026, reflecting continued funding of Mercado Pago's credit operations, including $2.1 billion deployed into loan book growth during the quarter, partially offset by $560 million in fintech funding.
Total loans receivable, net of allowances, stood at $11,996 million compared to $10.74 billion as of March 31, 2026, an increase of 11.72%. Adjusted free cash flow was $214 million, improving from negative $56 million in the first quarter of 2026, even after absorbing $441 million of capital expenditure, consistent with the seasonal normalization of cash generation following the first quarter's seasonal weakness.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, MercadoLibre has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MercadoLibre has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.