A marketplace giant for Latin America, MercadoLibre runs an online shopping platform where millions buy and sell everything from phones to home goods, backed by Mercado Pago for payments and loans and Mercado Envios for delivery. It was born in 1999 when MBA student Marcos Galperin sketched a plan inspired by eBay and launched from a Buenos Aires garage. Its name literally means "free market" in Spanish, and in Brazil it goes by Mercado Livre.
MercadoLibre Q2 revenue rose 49.8% to $10.2B, but gross margin fell to 40.9% and operating margin hit 6.7% as credit provisions and shipping costs climbed.
MercadoLibre's growth accelerated, but the cost of that growth is rising faster. rose 49.8% to $10.2 billion, driven by a increase in its credit business, yet contracted 4.7 points to 40.9% and fell to 6.7% as the nearly doubled. The company is trading profitability for scale at an increasing rate.
Key takeaways
rose 49.8% to $10.2 billion, with Fintech growing faster than Commerce as credit revenues and total payment volume accelerated.
fell 4.7 points to 40.9%, the lowest quarterly print in the data provided, driven by a reduced free shipping threshold in Brazil, higher shipping operating costs, and increased cost of goods sold.
contracted to 6.7% from 12.2% a year earlier, as the nearly doubled to fund the rapid expansion of the credit card portfolio.
Section summaries
Management's Discussion and Analysis
Revenue surged 49% YoY to $19B, driven by credit and commerce growth, but margins compressed due to higher shipping, 1P costs, and credit provisions.
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Consolidated net revenues and financial income grew 49.4% to $19.0B for H1 2026, with Commerce up 48.8% and Fintech up 50.2%, boosted by GMV and TPV growth.
rose 25.5% to $3.7 billion and rose 22.5% to $3.2 billion, continuing the strong cash generation that reversed the Q1 2025 dip.
rose 45.5% to $10.6 billion, continuing a multi-year trajectory of increased to fund growth, while cash and equivalents fell 47.0% to $3.6 billion.
A 10% strengthening of the US dollar against all foreign currencies would have reduced first-half 2026 by approximately $202 million, with Argentina remaining the primary FX risk driver.
What changed
The Q1 2026 watch item for was whether the reduced free shipping threshold in Brazil would continue to compress profitability. It did: gross margin fell further to 40.9% from 43.7% in Q1, confirming the trend is not stabilizing.
The Q1 2026 watch item for the asked whether could recover above 10% if credit losses moderated. It did not: operating margin fell to 6.7% from 6.9% in Q1, as the provision for doubtful accounts continued to climb with credit card portfolio expansion.
The Q1 2026 watch item for asked whether the $2.1 billion Q1 print confirmed the Q1 2025 dip was an anomaly. Q2 operating cash flow rose to $3.7 billion, up 76.5% sequentially, confirming strong underlying cash generation.
The Q1 2026 watch item for asked about further increases after reaching $9.9 billion. Long-term debt rose another 7.0% sequentially to $10.6 billion, continuing the multi-year trajectory of increased .
What to watch
Q3 2026 against the 40.9% Q2 level to see if the reduced free shipping threshold in Brazil and higher funding costs continue to compress profitability or begin to stabilize.
Next quarter's after the first-half 2026 increase to $2.5 billion, and whether can recover above 7% if credit losses moderate.
Q3 2026 after the $3.7 billion Q2 print to confirm the $5.7 billion first-half run rate is sustainable against the $12.1 billion full-year 2025 total.
trajectory after reaching $10.6 billion and any new note issuance or draw on the $400 million .
margin declined to 42.2% from 46.1% in H1, primarily due to a reduced free shipping threshold in Brazil, higher shipping costs, and increased cost of goods sold.
fell to 6.8% from 12.5% in H1, driven by a 95% surge in to $2.5B, reflecting rapid expansion of the credit card portfolio.
Brazil led with $10.3B (54% of total), growing 57% , while Argentina's growth was 21.6% in USD but 55.7% in local currency, offset by a 28.1% FX .
was strong at $5.7B, but was $158M as $4.1B was reinvested in net loan portfolio growth and $712M in for logistics and IT.
Quantitative and Qualitative Disclosures About Market Risk
MercadoLibre faces FX, interest-rate, and equity-price risks, managed via derivatives and cash centralization.
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A 10% USD weakening vs. all foreign currencies would have lifted H1 2026 by ~$202M to $1,085M; a 10% strengthening would have cut it to $718M.
Brazilian, Mexican, and Argentine operations carry material FX exposure: a 10% BRL would reduce local-currency net assets by ~$444M, while a 10% MXN depreciation would reduce them by ~$303M.
Argentina is treated as (USD ); a 10% ARS would trigger a ~$63M FX loss on the non-functional currency net asset position.
A hypothetical 100bps rise in interest rates would increase H1 2026 pre-tax charges by ~$39M, driven by variable-rate debt ($7.6B) and floating-rate assets.
Equity price risk stems from (): a 40% stock-price swing moves the total contractual obligation fair value from $385M to $899M.
The company uses FX forwards, cross-currency swaps, and interest-rate swaps/futures to hedge exposures, and centralizes excess cash into USD-denominated accounts.
As of June 30, 2026, there have been no material changes in our risk factors from those disclosed in the Company’s 2025 10-K. 63 | MercadoLibre, Inc. Table of Contents
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As of June 30, 2026, there have been no material changes in our risk factors from those disclosed in the Company’s 2025 10-K.
63 | MercadoLibre, Inc.
Table of Contents