MercadoLibre reported robust top-line growth for the April-June quarter while delivering a net profit figure that topped analysts' forecasts despite a year-on-year decline. Net income for the period came in at $466 million, higher than the $433 million consensus in a LSEG poll, even as the company recorded roughly an 11% decrease from the same quarter last year.
The profit contraction marked the third consecutive quarterly decline and was attributed in part to intensified free-shipping programs in Brazil initiated in mid-last year and to provisions tied to the companys credit-card expansion, according to Leandro Cuccioli, MercadoLibres senior vice president of investor relations. Those initiatives are part of a broader investment agenda that Cuccioli says is intended to drive longer-term customer engagement and revenue growth.
Revenue for the quarter reached $10.2 billion, a 50% increase year-on-year and the company's strongest growth rate in four years. That figure exceeded the $9.7 billion projection from the LSEG poll. Gross merchandise volume - the measure of total ecommerce sales - expanded 36% on a foreign-exchange neutral basis, reflecting sustained demand across the platform.
Operating income, or EBIT, was $683 million for the quarter, a decline of about 17% from the prior year but modestly above analysts' expectations of $658 million. The companys EBIT margin narrowed to 6.7%, down from 12.2% a year earlier and slightly below the 6.9% margin recorded in the first quarter. MercadoLibre has recently shown a pattern of sequential revenue growth paired with falling profits and margins as it prioritizes strategic investments over near-term profitability.
Cuccioli highlighted one area of strategic progress: customers who use both the ecommerce marketplace and the fintech arm Mercado Pago increased by 37% during the quarter, compared with annual growth rates between 20% and 30% seen previously. He characterized these dual-service users as more valuable, noting they undertake more transactions and deliver greater profitability compared with customers who engage with only one of the company's businesses. "This is the most valuable segment for us," he said.
Cuccioli also described the current investment stance as deliberately focused on reinvestment of gains into the business. He said the approach is generating operational leverage, but emphasized that MercadoLibre intends to continue reinvesting in the near term rather than prioritizing margin expansion immediately.
On the balance-sheet and payments front, the company reported a credit portfolio of roughly $16 billion, representing a 75% increase in dollar terms and driven mainly by credit-card lending. The 15-to-90-day delinquency rate stood at 7%, up 0.3 percentage points year-on-year but down one percentage point from the first quarter.
Volume processed through MercadoLibres acquiring business rose 42% year-on-year on a foreign-exchange neutral basis, underscoring growth in payments activity even as credit losses and provisions required additional reserves. Management cited cross-border sales expansion and credit-card growth as core components of the long-term strategy that are weighing on near-term profitability.
While the company delivered results that beat analyst expectations on both net income and revenue, the continued investment push has kept margins under pressure. The mixed outcome - top-line strength alongside compressed margins - leaves investors balancing faster growth and higher customer engagement against ongoing reinvestment and credit-related costs.