MercadoLibre, Inc. Q1 FY2026 earnings call

Brazil is a highly competitive e-commerce market. MercadoLibre Brasil has strong engagement metrics with strengthening frequency, multiple category shopping, retention. Conversion rate in Brazil increased one percentage point year over year. Competitive intensity is bringing new consumers online, expanding the market pie and MercadoLibre is capturing a larger slice. The company is investing based on performance of different initiatives like credit card, 1P, CBT, free shipping offering in commerce, and in fintech by scaling credit card portfolio. Investments in fintech and commerce have positive results and continue to be made to capture long-term opportunities.

The philosophy is to look at investments and their results, continue to invest behind the ecosystem to capture opportunities. Not managing the business to a particular margin level, optimistic about current quarter's performance and will monitor investment opportunities over time to position for long-term cash flow and higher margins.

Q: There are seasonal headwinds in 1Q from credit business, are ramping investments masking seasonal effects and EBIT margin to be around 1Q levels?

A: Competition makes MercadoLibre stronger, it thrives in competitive environments. MercadoLibre Brasil has structural gains in value proposition, conversion rate increased, reaching new records. Competitive intensity brings new consumers online, company's supply, GMB, successful items sold, retention are growing. Regarding margins, invested based on performance, will continue to invest behind initiatives, monitor energy costs.

Q: Follow-up on credit book, asset quality deterioration, renegotiation strategy, credit card insurance pace, NIMO going forward?

A: NE-MAL has seasonality in Q1, sequential compression. Higher mix of credit cards, personal loans portfolio expanding. No change in renegotiations, extending loan duration has people prepaying, no impact on quality or regular negotiations. No change in credit card insurance pace mentioned, not sure if new recurrent NIMO, but will monitor investment opportunities.