MercadoLibre (MELI) dropped more than 7% in after-hours trading Thursday after Q1 2026 earnings missed analyst expectations, despite the company posting its fastest revenue growth in nearly four years.
The stock had gained 1.6% during the regular session before the results hit.
MELI reported adjusted EPS of $8.23, falling short of the $9.37 analyst consensus by $1.14. That figure also came in below last year’s $9.74.
$MELI (MercadoLibre) #earnings are out: pic.twitter.com/aUczWxDkdT
— The Earnings Correspondent (@earnings_guy) May 7, 2026
Revenue for the quarter reached $8.85 billion, up 49% year-over-year and ahead of the $8.29 billion consensus estimate by $530 million. It was the fastest revenue growth rate since Q2 2022.
Gross merchandise volume rose 42% year-over-year across the platform. Mexico led with a 48% jump, while Brazil posted a 54% increase. Total payment volume climbed 50% to $87.2 billion.
Net income totalled $417 million, with a 4.7% margin. Income from operations came in at $611 million, reflecting a 6.9% operating margin. Free cash flow was -$56 million, broadly in line with Q1 of last year.
MercadoLibre pointed to its decision to lower the free shipping threshold in Brazil as a key driver. Unique buyers in Brazil grew 32% year-over-year — the fastest in five years. Items sold surged 56% YoY, more than double the 26% growth recorded in Q2 2025 before the threshold change.
Brazil’s GMV grew 38% YoY on a foreign exchange-neutral basis.
The fintech segment continued to expand. Monthly active users reached 83 million, up 29% year-over-year.
The credit portfolio grew 87% YoY to $14.6 billion — the largest quarterly increase in nominal terms. Assets under management rose 77% YoY to nearly $20 billion.
Commerce revenue reached $5 billion, up 47% YoY. Fintech revenue totalled $4 billion, growing 51% YoY.
Advertising revenue grew 73% YoY in USD. MercadoLibre said its Mercado Ads unit is now the fastest-growing advertising player in the region.
MercadoLibre rolled out its first AI-powered search experience in Q1 2026, rebuilding the entire search architecture around large language models.
The company said the shift away from keyword-based search improved product relevance in Brazil and Mexico, leading to higher conversion rates and better click-through rates for sponsored listings — both translating into additional revenue.
CFO Martín de los Santos called Q1 2026 “another exceptional quarter,” saying the company is investing to transform how hundreds of millions of Latin Americans shop, pay, and access financial services.
MercadoLibre noted that twenty-six years after launch, it is growing at startup rates across all its major markets. “Nowhere is this more evident than in Brazil, our largest and most established market, where growth is not just fast — it is accelerating,” the company said.
The EPS miss of $1.14 against consensus was the primary driver of the after-hours sell-off, even as the revenue beat and operational metrics remained broadly strong.
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