{
  "id": 18769476,
  "title": "MercadoLibre's Profits Fall Again. What It Means for Investors",
  "url": "https://urgent.news/2026/11/07/mercadolibres-profits-fall-again-what-it-means-for-investors",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-11-07T18:45:02.000Z",
  "source": {
    "name": "Motley Fool",
    "slug": "motley-fool",
    "url": "https://www.fool.com/investing/2026/11/07/mercadolibre-s-profits-fall-again-what-it-means-for-investors/?source=iedfolrf0000001"
  },
  "original_language": "en",
  "account": "MercadoLibre (MELI) reported a decline in profits once more, causing its shares to drop 12% on Thursday. This drop in earnings has investors concerned about the company's investment cycle, as it continues to spend on lower free shipping thresholds, expanded logistics, and the growth of its credit business. Despite this, the company's revenue for the quarter surged 45% to $10.75 billion, surpassing analysts' expectations of $10.71 billion.\n\nGross merchandise volume increased by 38% to $23 billion, while total payment volume rose by 53% to $109 billion. Operating income fell from $636 million to $601 million, and the net income margin dropped to 4.2%. Per-share earnings, however, rose to $8.83 as the company benefited from lower tax expenses, but this was still below analysts' estimates of $9.27.\n\nDespite the profit decline, MercadoLibre has managed to gain market share in its three largest markets - Brazil, Mexico, and Argentina. Furthermore, the company sees significant potential for growth in purchase frequency, with its buyers making an average of 12 purchases per year compared to more than 50 for e-commerce shoppers in developed countries. By offering faster shipping, reducing the free shipping threshold, and expanding its selection, MercadoLibre aims to create a sticky habit and strengthen its competitive advantage in the market, similar to Amazon's strategy in the U.S.\n\nThe company's credit card portfolio has been a headwind on the bottom line, as it needs to set aside provisions for expected losses when issuing new cards, even before any profits are earned. The credit portfolio grew 62% to $18 billion, and default and interest metrics remained stable. Management noted that e-commerce penetration in Latin America is increasing at its fastest pace since the pandemic, which justifies their investments in grabbing market share. As the business has scaled up, its cost per shipment in Brazil has fallen by 5% in constant currency over the last year and 14% since the first quarter of 2025, indicating effective scaling of logistics operations.",
  "summary": "The Latin American e-commerce operator fell again on earnings. Is a recovery near?",
  "key_points": [
    "MercadoLibre's profits fell again, shares dropped 12%",
    "Revenue surged 45% to $10.75 billion, beating expectations",
    "Net income margin dropped to 4.2%, per-share earnings rose to $8.83"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}