MercadoLibre (NASDAQ: MELI) shares fell about 8% in extended trading on Wednesday to roughly $1,600 after the company reported third-quarter profit below Wall Street expectations. Net income was $448 million, compared with the $476 million analysts expected, according to LSEG data. Profit nevertheless increased about 6% from a year earlier, ending a run of three consecutive quarterly declines.

The quarter pairs a strong top line with compressed profitability at Latin America's largest e-commerce and fintech company, whose marketplace, shipping network and Mercado Pago payments arm make its results a broad read on consumer and credit activity across the region.

Revenue provided a stronger result. Net revenue and financial income rose 45% year over year to $10.75 billion, exceeding the $10.66 billion consensus estimate, according to Reuters. Adjusted earnings per share were $8.83, below the $9.34 consensus by 51 cents.

The earnings figures were also published by Wall St Engine on X:

MERCADOLIBRE $MELI Q3’26 EARNINGS HIGHLIGHTS 🔹 Revenue: $10.75B (Est. $10.66B) 🟢; +45% YoY 🔹 EPS: $8.83 (Est. $9.36) 🔴; +6% YoY 🔹 Income from Operations: $676M (Est. $731M) 🔴 🔹 Net Income: $448M (Est. $476M) 🔴 Customers & Assets: 🔹 MAUs: 93M; +29% YoY 🔹 Credit… pic.twitter.com/kOyJ4zw7EF — Wall St Engine (@wallstengine) November 4, 2026

Brazil, the company's largest market, led growth. Foreign-exchange-neutral gross merchandise volume in the country increased 36%, while the number of items sold rose 45%. Across the business, gross merchandise volume grew 38% to $23 billion. Mexico was slower, with 21% growth as tax reform and weaker consumer spending affected demand. Argentina recorded 40% growth despite soft consumer conditions. MercadoLibre said it gained market share in Brazil, Mexico and Argentina.

Logistics Spending Weighs on Margins

Operating income was $676 million, representing a 6.3% operating margin. The margin was nearly 10% a year earlier, while analysts had expected about 7%. Because MercadoLibre runs its own fulfillment network across the region, warehouse build-outs and delivery subsidies flow directly through to that margin line.

MercadoLibre increased its fulfillment capacity by about 20% from the previous quarter, compared with a 10% increase over the same period last year. Chief Financial Officer Martin de los Santos explained the effect of the investment to Reuters.

“The quarter when you are building capacity, you don’t have the revenues yet, so you have the cost,” he said.

De los Santos said the pressure should ease and that the company expects to recover the margin reduction in the following quarter — a commitment that will be in focus when fourth-quarter results arrive.

Free shipping also increased costs, particularly after expansions in Argentina and Brazil. MercadoLibre lowered its free-shipping thresholds, resulting in a greater number of smaller, lower-priced orders being shipped — a trade-off that lifts order volume but moves low-ticket parcels through the network at thinner economics. Net shipping margin, measured as a share of gross merchandise volume, has declined by about 200 basis points since the first quarter of 2025. Higher fuel prices added to expenses, and the company responded by raising shipping fees for merchants.

Sales and marketing expenses increased to 11.6% of net revenue from 11.2% in the previous quarter. The company cited its affiliate program in Brazil as one factor.

Mercado Pago and AI Plans

Mercado Pago's total payment volume rose 53% to $109 billion. Monthly active users across the fintech business increased 29% to 93 million, while the credit portfolio expanded 62% to nearly $18 billion. The rate of credit growth was slower than in recent quarters. De los Santos said MercadoLibre is being “a bit more conservative” with new loans in Brazil and Argentina. For a lender, slowing origination is a standard lever for managing default risk, since losses on loans extended today tend to surface with a lag.

Chief Executive Officer Ariel Szarfsztejn said MercadoLibre will not currently allow external AI shopping agents to access its inventory and place orders for users. He said the company intends to develop that experience internally. The stance sets MercadoLibre apart from a broader e-commerce trend in which several major platforms have opened their catalogs to third-party shopping agents.

MercadoLibre is testing an AI shopping assistant with a small portion of its user base, but it has disclosed few details about the early results.

MELI shares are down about 14% this year after rising nearly 140% between 2023 and 2025. MercadoLibre also completed a $1 billion investment-grade bond offering in September. The coming quarters will show whether margins rebound as the new fulfillment capacity starts generating revenue, whether net shipping margin stabilizes after its roughly 200-basis-point slide since early 2025, and whether the in-house AI shopping assistant earns a wider rollout.

Source: CoinCentral