MercadoLibre, Inc. Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Call Date: Q2 ended June 30, 2026 | Participants: CEO Ariel Szarfsztejn, CFO Martin de los Santos, Fintech President Osvaldo Gimenez, IR Director Richard Cathcart

Key Financial Highlights

  • Net Revenue: Surpassed $10 billion for the first time, +50% year-over-year (YoY).
  • Income from Operations: $683 million; operating margin 6.7% (down 550 basis points YoY due to strategic investments; broadly stable sequentially vs. Q1 2026).
  • Credit Portfolio: $16.4 billion, +75% YoY, with strong asset quality (15-90 day NPL at 7.0% total portfolio / 4.6% for credit cards, near historical lows).
  • NIMAL: Improved to 21% in Q2 from 18% in Q1 2026, with gains in Brazil, Mexico, and Argentina.
  • Adjusted Free Cash Flow: $214 million (after $441 million capex and $2.1 billion credit book investment).

Strategic & Operational Updates

  • Brazil Commerce: One year after lowering free shipping threshold: items per buyer +19% YoY; conversion +1.1 percentage points YoY (sustainable step-change); daily active users growing faster than monthly; new buyer cohorts showing higher retention and cross-category purchases vs. prior cohorts.

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Richard Cathcart: Hello, everyone. Good evening, and thank you for joining MercadoLibre's conference call for the quarter ended June 30, 2026. I'm Richard Cathcart, Senior Director of Investor Relations. And I'm joined this evening by Ariel Szarfsztejn, our CEO; Martin de los Santos, our CFO; and Osvaldo Gimenez, President of Fintech. Tonight's format will be slightly different. I'll start by handing over to Martin for a few high-level opening remarks, and then we'll head straight into the Q&A. Before we do that, I would like to remind you that management may make or refer to forward-looking statements and non-GAAP measures. So please refer to the disclaimer on screen, which is also available in our earnings materials on our Investor Relations website. Please note that this call is being recorded, and a replay will be made available on our Investor Relations website as well. With that, I'll pass the call over to Martin de los Santos, our CFO. Martin de Los Santos: Good afternoon, and thank you for joining us. MercadoLibre delivered another strong quarter in Q2 2026. Net revenue surpassed $10 billion for the first time, growing 50% year-on-year. Income from operations was $683 million, with a margin of 6.7%, broadly in line with last quarter and the result of a deliberate choice to continue prioritizing investment in long-term engagement, growth and scale over near-term profitability. Before turning to a few details on this quarter's results, I want to spend a few minutes on

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