Investing.com — MercadoLibre Inc (NASDAQ:MELI) reported third quarter results that missed earnings expectations, sending shares down 7.8% in after-hours trading Wednesday as investors reacted to the profit shortfall and declining operating margins.
The Latin American e-commerce and fintech company posted adjusted earnings per share of $8.83, missing the analyst consensus of $9.34 by $0.51. Revenue reached $10.75 billion, slightly above the $10.69 billion estimate and up 45% YoY. Income from operations totaled $676 million with a 6.3% margin, down from 7.0% in the prior quarter and representing a 6% decline YoY.
The margin compression reflected higher costs from expanded free shipping, new fulfillment capacity added ahead of peak season, and increased affiliate marketing spend in Brazil. Net shipping margin fell approximately 200 basis points as a percentage of gross merchandise volume since the first quarter of 2025, as the company absorbed costs from lower-priced items and more frequent shipments following its decision to lower free shipping thresholds.
“Mercado Libre delivered another quarter of strong growth in Q3’26, with net revenue and financial income of $10,750 million, up 45% YoY,” the company stated, noting it gained market share in its three largest markets of Brazil, Mexico, and Argentina.
GMV grew 38% YoY to $23 billion, while total payment volume increased 53% to $109 billion. The company’s credit portfolio reached nearly $18 billion, up 62% YoY, with the credit card now representing 47% of the portfolio. Fintech monthly active users grew 29% to 93 million.
In Brazil, FX-neutral GMV grew 36% YoY with sold items up 45%. Mexico saw slower growth with FX-neutral GMV up 21% as tax reform and weaker consumption weighed on demand. Argentina posted 40% FX-neutral GMV growth despite soft consumption conditions.
The company expanded its fulfillment network by almost 20% quarter-over-quarter in square footage, contributing to near-term margin pressure. Sales and marketing expenses rose to 11.6% of net revenue from 11.2% in the prior quarter due to increased investment in Brazil’s affiliate program.
Net income was $448 million, up 6% YoY, with a 4.2% margin. The company completed a $1 billion investment grade bond issue in September.
Original Article
MercadoLibre falls on earnings miss, margin pressure
Applovin shares surge on strong Q3 results and guidance
Coherent quarterly profit jumps 91% as AI data centre demand drives revenue growth
