MercadoLibre (MELI) 6 Nov 242024 Q3 Earnings call transcript

Company Profile

Participants

Richard Cathcart	executive
Marcos Galperin	executive
Irma Sgarz	analyst
Osvaldo Giménez	executive
Andrew Ruben	analyst
Ariel Szarfsztejn	executive
Marcelo Santos	analyst
Geoffrey Elliott	analyst
Martin de Los Santos	executive
James Friedman	analyst
Craig Maurer	analyst
Deepak Mathivanan	analyst
Neha Agarwala	analyst
Robert Ford	analyst
Joao Pedro Soares	analyst

Call transcript

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Operator

Good evening, and welcome to MercadoLibre's Q3 2024 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Richard Cathcart, Investor Relations Officer. Please go ahead.

Richard Cathcart

to XXXX. earnings welcome ended call and XX, September everyone, the conference MercadoLibre for Hello, for us. you Thank joining I'm Richard Cascade, MercadoLibre's Investor Relations Officer. Today, on video, our our quarterly we share with begin team. session live we will Q&A management after will which our highlights .

discuss go management measures. the that third results we contain non-GAAP or make refer XXXX. Before this our remind forward-looking presentation and of may I for to on you may quarter to, and statements

earnings our will So on please begin disclaimer the Relations available With our materials refer our website. on screen, Investor be with in which the results. to that, let's summary of

Marcos Galperin

Hello, everyone. an later excellent to businesses that had quarter all across MercadoLibre of our I a am pleased quarter and We outstanding growth. geographies. share

the So was performance strong really all around.

we our quarter, fintech our year-on-year e-commerce in reinforced strategic rewarded have time and Mexico. GMV gains XX% of the these with this in customer enhancing Every commerce America. we market growth results, platform investments growth in the in and Latin have In and position resulted both In and market XX% fintech invested we in been strong experience. our results both we platform, continue This leading as Brazil past, in in the and With position. share our in in make also countries. to improvements

our items In in the at which platform, the sold XX%, sold items is grew ever XX Argentina, and we million surpassed highest volume.

market. the in continue Argentinian to improvements see We

pandemic. than platform. during number a saw is added that almost We have the higher peak into million record of the of the This buyers X a number new our we

the new we that even this during users we saw that, a me let experienced explosion the not of So of clear at level. number on demand pandemic, in be

on we of it core of e-commerce most Only in when other to continues Latin the be XX% to more relatively of low online. regions. penetration America developed compare know, As you

growing. plenty it's of So room to continue

online volume crucial have lead more in of e-commerce. penetration As role region, driving and the player increasing we in a this the

our we strategic invest that and in program. loyalty continue logistics as For our purpose, to initiatives, such

opened X in Mexico, X.X fulfillment ago. penetration we a compared increase shipped facilities of better QX, us a our the and in having ecosystem. fulfillment X out turn, own delivery volume senators, buyers by a and know more In in much experience We new year a that and growth to helps or in improve further percentage that for Brazil volume results better more of much points fulfillment faster conversion results and user sellers in reliable in and of

role that Mercado choosing online people for technology plays our and biofriction. in critical Pago business main with products Investment service their that as removes provider. bringing more because engagement in financial more a consumers and more see also it Pricing show having we are

as achieve credit credit by the cards. invest grew behind We critical within last we year. users. In QX, product principality card And XXX% our credit TPV to continue to our a is issued new card

growth credit, of card last our As risk consumer and in of but to this credits, only compared we improvements merchant accelerated also not year. our of in the underwriting we see credit resulted have portfolio XX% models,

that Rather total of the on fact us are becoming of know portfolio percentage already puts the the the short-term confidence profitable, We and as card portfolio, cards have investments. combined cohorts a our pressure shift more we of gives seen that spreads. with our NPLs credit faster credit some in growth that credit stable earlier

results. Turning now to our financial

our of we business lie opportunities great FX a us Our execution just Mexico headwinds Brazil. of of that XX% growth but A a KPIs the QX suffer our that year-on-year also the result translated despite revenue team, in strong successful testament into not growth ahead performance of in and operational and is many ecosystem. of

XX.X% more a investments The on can with year find was margin margin. we Investors those initiatives comes that strategic of EBIT to earlier. from $XXX the detail shareholder from discussed majority million last investments the compression Our our letter. in

by million the reduction EBIT by lower in with income $XXX year, FX our in XX% to offset partially reaching last quarter, Net rose losses. a compared

finish we tremendous our commerce us, year of As also fintech both opportunities growth anniversary, ahead to XXth in continue we now advertising. and and see in

focused future a of have growth, the business. generation vision profitability and long-term We clear our are and on flow cash the

quarter. to examples share of some implemented I that the want have innovation we Now during

I I'll you. those Richard to will it So explain turn back to

Richard Cathcart

just of snapshot September, benefits new some back cash coin or today. account. could This stable get fintech the where investments Meli all minimize created have a in benefits include America. smartest of MercadoLibre share Pago is a Mercado to on cash much users making is on We we to those the In Those card of years users and credit paid is higher back used increase are back value shift on force the yield dollar purchases purchases more funds commerce happen for installments want remunerated inclusion subscription, it the to include Continuously experience back package that proposition, into offline innovations our in our fintech able investing they is by our or Cash benefits making service made that of a digital than of the users. card major accounts. levels held for benefits. to differentiation These for melimise to and online marketplace. held credit pay make marketplace accounts deposited Mercado on and in to be Pago and Latin extra choice in the driving user financial in come. to and key purchases means the the

consumers needs. in that free Disney+, marketplace Deza and choice cheaper on plan to has fintech services. access best are Melimise and offers Essential total other a Whilst great all plan purchases and content of cashback benefits. the the suits of We also discounts a streaming additional the with X all the shipping, introduced plus that gives The of includes plans plan an tier essential or their plan benefits

Day drives and which multiples dilute Delivery for higher on It piece To free of us costs. to frequency to core day. the a enables program. and the on delivery of Meli lower-value our delivery Meli incentivize users our purchase purchase be items, continues popular shipping last-mile loyalty enables

shipping items our made to more user free the have of the visible engage lower-value We they as platform. with

higher initiatives a online to other buyers QX. the aimed in purchasing of this helps improving new record Several peak have the live us COVID during at gone In the even journey previous attract QX, than pandemic. number

to enables by category-specific the as mechanic develop the we those launched ship schedule Auto appointment vertical Parts, drive retail In off-line with purchasing, the to items install continue they vertical. We are an a mechanic. we way a items to feature that to buyers to and directly new

that profile. includes coupon, page, introduce suggests short a personalized makeup notifications. push cross-category new we users products to launched new online. enables high to different a their In cut increase frequency technology personalized category suggestion based that barrier a apply on a button the to category to in To that our individual face page and consumers for special major a makeup shop landing users a home beauty see shopping, tackles buying users a app. This on category, to the tool This we

in Paulo September, were announced shipping online means experience. XXXX. added increase be An day Brazil we which to the in of we will the deliver operations XX number of the XX% QX. of important the In new cities increasingly more driver on as enable outside This same plans of shifting investments by of is by we offline fulfillment X operations, Brazil double our These number than retail will us XX%. end to Sao the network. regionalize where centers these of in of

Some smaller will operations last de model the that to which are them introduced be similar in target centers individual of Rio year, metro fulfillment Janeiro we cities.

a of our we innovations a live of choice just MercadoLibre, have is that to snapshot as is because Latin come. the of always enhance destination recently, gone to innovations America This shop the yet pipeline in that have best at strong position online the as and will

Operator

the [Operator begin At from Instructions] pause we first President; session from Gimenez, assemble now question-and-answer time, de Goldman Commerce Osvaldo CFO; this Santos Sachs. Irma momentarily Sgarz with Fintech our will And roster. Martin and question President. Ariel We our Szarfsztejn, to los will comes

Irma Sgarz

I'd to like we And saw where there's card question. element the about pronounced was my growth. a quite twofold portfolio a credit to ask

driving in drove the the what Firstly, third quarter, where at are of growth has a for this from to over you've should geography generally into to and X was messaging there about acceleration the acceleration jump that think whether I or leaning and specifically you've the acceleration. know sort I next, further incremental But credit card, portfolio see pretty pace quarter-over-quarter of cohorts the been the in been quarters. acceleration -- the understand quarter and for pace here? this for to surprised originating of last couple positive, been curious in stable which of sort of just customer we incremental from

seeding may then spread new to you of feeling wouldn't duration where expand second loans on it but to I make lower risk slightly confident larger, why And those with curious like ramp-up a really over sort into ahead? from that for little geographies. were about perhaps emphasized a have maybe all mean more more if more more loans, And your your generally that, what part you users the you mechanisms, bit if as the you longer confident you're just risk of does higher customers? go underwriting that classes pressures And feel that, element leaning was of then into initially you smaller time also growth in could be

Osvaldo Giménez

product continuing basically rose we XX% minute with lower share cards. drivers. now. quarter since year . Also, move start to to product. This the question the the credit in X back me mix credit a of NIMAL moving by I'll second to this market. credit a in of then refer the yes, from up is XX% is whose business, Let And affected largest the XX% portfolio mix regards key the ramp-up this NIMAL, spread or driven are NIMAL NIMAL. increase to and in of part ago card The I With X about

very with very, are We this. happy

income comes higher And the lower have simply the that we lower accelerating the grow to profitable with have lines customers. durations of We the it proportion we provisions. with to we is move to the the have whenever portfolio market. lower larger credits we of fact spreads the a and interest the in risk offering been have happy that way size X the and is initially, but started also customers. were that had afterwards. longer which are we're of then from end, third revenues that And by portfolio, the very part smaller are than These the low to do And

to hit has solid broadly I And a stable So is XX days asset -- quality have the having we said say, NIMAL. both indicators that, for been whenever rates, at which very X.X%. growth NPLs, are we're growing rapidly, there would XX, had stable

all good some a have positive. that first early the we when also to contributions of are been XXXX contributions and and Brazil on is credit part country of doing of in evolving, moving already are positive even net variable And longer. cohorts already at this for and the have Brazil cohorts -- a with the yes, those have in news Now the we how excited where all with Mexico. XXXX, for And is have is value we positive from regards question in both business we card. XXXX this to look

cards we use power drivers cards, general, in very Pago higher are are and we how a Scores, the marketplace, of of current in that from the increased higher that both credit in portfolio the increased the so Mercado marketplace, principality. transactionality but recent our P&L the that in in all total not an penetration in users evolving significant or profitable, also is increase cohort fact who Net only our but because other the fast increased Promoter the an -- see us impact So of excited of and represent has in credit the quarter, products our have makes off part returns bring growing are cohorts with the we product already and because also

we that excited with So is are how evolving.

the in I X of issuing, were in cards, mentioned, portfolio, beyond And TPV, is credit and therefore, we portfolio in that as relevant which that the things. are the all number is the believe we the doing the of think of metrics is other I the mentioned before. more has the -- in we penetration been TPV think has size of growing, of the lines, increasing You regarding One of that the increasing increase cards of the number cards. cars which I resulted

Operator

Stanley. comes The Ruben Andrew Morgan from next from question

Andrew Ruben

dig centers Brazil to in X quite investments, given the being a bit the to shipping quarter in distribution Hoping a sizable. in

some a the or So And outside but reach long perhaps if hoping on takes us there's give and these Paulo, how up typically color category you help ramp can reach give distribution you to of productivity. center facilities mentioned any otherwise, capabilities you? incremental Sao

we related, capacity constraints season. some network last the you then had And recall year, during

with views season. this on what So the so network compares your far demand the expansion I'm capacity during to your curious how year, expectations the are holiday now

Ariel Szarfsztejn

Ariel Andrew, here.

higher we a So of quite we've we yes, and of in that facilities saying this things. to grow because fulfillment because we higher were think as NPS leads been from rates, time, terms significant our rates. higher I fulfillment progress of operations for GMV promises, for X made seller and I conversion delivery And past there, in you clear said, retention faster fulfillment need some to the our think stronger capacity buyer

of demand, we Brazil our will what of expectation we huge we because opportunity continue in business with Mexico. A, in need luckily, see in to growth future. the grow and grow both the And the for in future marketplaces, to think capacity

to Second, available And of in least, we need a build we that because Mexico. Brazil. we last effect capacity there's not fulfillment need normalizing higher penetration but the consistently are of increases having in in -- capacity

to to business are deal the will capacity different demands our required this and overall, from buyers, importantly, the we more meters and only growing but are expanding bringing confident the big we square continue So have sellers with with that into we network, our not regions. that in

are we center, productivity, lower every fulfillment the the progress with in terms utilization, operating making we tends ramp-up we to and a from then window first but So In right? time of representatives, shortening your natural, part it's ramp-ups of question, our which open consistently start productivity grow.

the some our but our long-term for point, in for So users. short of term, is see this yes, you and scale can crucial our -- for to your capacity cost strategy pressures, growth, our serving our

Operator

The next Robert Ford comes of Bank from from America. question

Marcelo question next comes from Our Santos from JPMorgan.

Marcelo Santos

to ask and the Brazil between credit Mexico the experience card so about I you differences wanted far.

markets where bring like NIMAL So you whatever could have be you X you're frequency, contrast growing these NPL would information perhaps interesting.

Osvaldo Giménez

it when we relevant the in we that difference for this. is us Marcelo, was time probably doing credit I'll most say card the were launched that Brazil, the first

in adjust models So months, out initially, X new generation Therefore, we have we learn those then quite the had lot roughly the what product Mexico models. we started and loans. And iterated really, for a been relying And lines. built more we to learned we and consumer on more in last experience, along models. we roll able we those on when how And did we're of have launched to reliable terms of year, every to expect. a

in in the are Clearly, cards some, And Brazil. market the would Mexico. is we cards credit credit about than in believe is significantly of in Having what is Brazil users opportunity said huge. that, the than differences significant I was in it say, Therefore, structure been say also, credit is for ramp-up higher Mexico of And countries. I Mexico. Mexico and there has in in therefore, penetration less the both faster in the significantly would for the scoring how there information public it

information the is have the to each Also, and differences after because there day in So less more transactions working works terms third of when a country you the have in capital how to next Brazil in days. on XX are information. rely sell little and you Mexico, internal parties in

in than the capital are they are think are I differences. And Brazil. main those So in higher Mexico requirements working the

Operator

comes from question Geoffrey next Elliott The Autonomous. from

Geoffrey Elliott

in go I about to If you've quite you're centers a QX. few point could back the opened investment in fulfillment, the making fulfillment

You've . on going relative had Can to this X a or of is I X sense XXXX. the weigh on X got or Because were clearly give you planned a a significant where end another, long ago. profitability. believe, to quarter you weigh pretty it's by how of impact margins, us

Martin de Los Santos

margin said, in -- levels of in that of the are Mexico, of the credit up this -- we to to margin Osvaldo increase in the to a the Brazil business, lot the you penetration similar grew give from of it's cards, Martin think like just recently. we Ariel And the I just mentioning year-on-year. mentioned continue to take you and same fulfillment look at compression because of particular to case at continue which their XX% and -- here, compression fulfillment. before, came invest was there quarter, think growth you the this Mexico this centers Most we I quarter have in pressure it in as level fulfillment of and if wasn't

pressure the we answer volume so on that put question, that the past will as the But if it X we are continue because increased usual of your margins. X some look better we significantly. doing the short-term business able as to focus to years, over and on costs it So to addition invest then the all experience you been productivity. penetration in on, user have because always incremental of past back put dilute Has years. And for we to brings those

cost quarter, penetration higher we improved per year-on-year of even shipment we This significantly is actual productivity. fulfillment. the The though have down

usual done But particular fulfillment the continue this a that. and we So as in margins I to significant there think past. invest for pressure have as business it will in wasn't quarter, because of we

Unknown Executive

a square XXX Geoffrey, first Martin, testing highlight to we in not Rio we we are new announced every complement, So that another open center Janeiro. here fulfillment quarters de back, necessarily Just meter that our is metro facility, to a point few that -- right? is warehouse

that the X opened are of and, metro centers those, we -- of investment potentially of a are profile warehouses different different and of fulfilment open the coming in which type years. will This different. quarter, more have course,

Operator

Friedman comes The Jamie Susquehanna. next from . question from

James Friedman

I I'm fail debt you is wondering, is maybe the the and quality modeled? bad wanted to the that Or credit different is It's Slide specifically of ask something had margin underlying there originations? that bridge here. about about call that's new first than out the -- XX. like

Marcos Galperin

question. Jamie, last part of your -- let me with start the

reason, origination. and In fact, the and the we we're our are accelerating models, of credit that the very our about quality confident Osvaldo credit is explained, this prediction as

X.X point to. that pointing compression is are that not this explaining percentage So you part out

Here, quarter-on-quarter. increased portfolio $X what's happening is we billion that roughly

If you XX%. is were rapidly increased mentioned, this Osvaldo on credit but books. And we very when consumer debt incremental as are the we quarter, only portfolio on to happens by losses an profitable which quarter. also compression as we upfront. provision But look generates at accelerate, need margin did it you bad which provisioned the year-on-year, merchant to that not very and card, And you generating as increase credits, credit that this upfront, we and

fact the it's are they which the products. you of we we're all can markets you When the at originating, this the much the of I that pulled and are way which look that also confidence year, way, by pretty see accelerating, in not the accelerating our we're related to in of portfolio. all about performance speaks it So control. think NPLs, And under we the

the comfortable of our very about books. feel we So quality

Operator

Craig from . Maurer comes from Partners. question FT Next

Craig Maurer

your you related is onetime if if setting fourth new cost was of to into ask flat perhaps . comment operating second, quarter-over-quarter. facilities to or wanted rate going the year, that. expectation and penetration margin on those ad can penetration the costs ongoing the I And the for could perhaps quarter was what curious up versus out unchanged next you compression of I facilities. separate

Martin de Los Santos

low, Martin of margin see versus relatively investments you overall disclose we on compression, level, cost have of percentage the it's of here. specifics Craig, see We was less to and our that disclosures the of fulfillment. can which if fulfillment part in treated impact point the you than don't up compression. the investor X incremental ramp But

about that. I So to that's as as want say much

those short-term very we and about as feel pressures for I the through time, we're we investment volume, earlier, over in mentioned think, making incremental up I make that for treatment. comfortable

Ariel Szarfsztejn

with again. U.S. revenues of in So Craig, an this we GMB over this year-over-year, performance X% said, that, had are Mexico high in you neutral, reaching grew record increase XX% XX% about dollars. And we question this is percentage quarter. with that's once FX Ariel. X.X pleased as To quarter, we the of points Brazil We your and reached penetration

we So are that fact our ad well growing the with above GMV. are revenues happy

business We what's be are linear, full funnel better product great continue we the on as of technology, Still will see ads more growth potential stack we future focused analyzing our to in develop across so not never for the explain we efforts. you. But happening they FX, levers from quarter-over-quarter. changes. There and progress many, with . are the of we are seasonality great that Thank whatever, mix see making effects, excited results are our advertising. all conceptually, many are do

Operator

question next from Mathivanan from comes Cantor Our Fitzgerald. Deepak

Deepak Mathivanan

drive the give get NIMAL of and share So does generally it's And volume difference or anything in the the between some Is between terms the how to the on e-commerce lower consumer on in specifics much quarters? to and credit next there behavior to then e-commerce products, few fintech issuance secondly, cards, the credit can processing cohorts, is the you cards. of post ramp either over credit? just in the you it historical credit customer NIMAL benefits side. cards on can differ then just on us growth on color on How cards likely various credit some typical how based

we the precisely. a can think about that headwinds more little the modeling for So future

Osvaldo Giménez

Hello, Deepak.

we They the with the who engagement. also And have Mercado highest the credit MercadoLibre happy using Pago. thing impact credit users are the a who to more is with They we more a often. it. to on card buy regards credit products have -- what and has ecosystem access and the start top cards our see users So of They marketplace. see use that using line on those users on the first and are our

users engagement have credit with us. So users next a use so you, who significantly those engagement. -- views But on. then who are second credits basically, these then products increases increases getting card -- clearly, And those and are those credit have and of the are card those then all it those a

probably methods loans very is penetration another the consumer case you Also, are factor relevant we is proportion great Mexico is coming we the within highest already marketplace, at that consumer on a that within were from was payment layer where building the of see that it marketplace. And we loans. look when of of card. penetration because was the our mix case we the adding had credit the top for of that, a

So becomes products gaining it and volume and profitable. of the we of in credit continue marketplace, therefore, more the share all more with

say are relevant those the impacts. I'd most

In increasing the issue, so the of we continue ramping, we'll and we'll cards terms continue lines on. increasing

this working. are is how We comfortable

Martin de Los Santos

Martin here.

we incremental products, volume whom before. up expect those was NIMAL smaller lower minimal I the move in relatively will we don't as interest a charge specific they -- you merchant loans by credits, highest In directionally have mentioning rates country followed by be will also spreads high spreads, Regarding throughout to users which it we credits disclose personal lower and with can Osvaldo market, spreads, with margin. but or margins consumer we risk lower reach as of result product, has and but give both

months few profitability. is card remember, And as Credit ramping a up. to card, the months, reach several itself it it credit takes

neutral are the but the seen positive card marginally older of So the NIMAL have we credit is negative, we spread already. or cohorts scaling as becoming

confident we will to are that our other reach portfolio the portfolio and we continue So increase who a profitability cohorts level. as at clean

Operator

from Neha The next question from comes HSBC. Agarwala

Neha Agarwala

Perfect. Okay.

the give you a what again us percentage Brazil on Mexico. credit My card Could Brazil your on of of in any of credit on also, the of question and is credit cards. as Mexico? and platform is Sorry, to versus in both software zooming other portfolio in cards business. the just breakdown sense roughly, And usage

the that you increase the launched in usage of ambition in-house? M&A merchants? software Thank working it Or providers is to Brazil be business software to the you -- mentioned software you monetization you there? and Are If much. for POS are could space, acquiring your in with attaching How partnership. -- acquiring in-house? with seamless you business. building are you the more what Would You software on make the so it elaborate bit is organic, the a the that? And

Osvaldo Giménez

this those us was of though we off related both card would principality. because and that extra for question that, great . the to in the they platform, countries we many and of the the majority of Brazil using Mexico part is it's gets do, but use incentives, off-platform. to of over do top they're the credit incentives Even between platform. just general, card in the card in believe people volume on gets off that card and do wallet would cases, we we the for marketplace frequently. I more use that the I show first in XX% we The say say not platform. the are gaining And in both volume is is

Martin de Los Santos

part, Typically acquiring software, advances other of you those business, most letter, strategy but we an good in the it companies. have terms to not and making mentioned will are in very are the mentioned, of in some our I the it's in of part regard of important trial, be comodevelopers. With acquisitive it's, for we the think been not as we -- buying

likely will most development. be So on

Osvaldo Giménez

Martin. that X Let say you. me will complement -- that, I things. Thank

develop. many are hand, want to things there we On X the

they use I really be keep to that but of have to able of past. of catalog, with where see medium to we we and with with Mercado and to need to have with things this small invoice in are really with in There you that think front then driving basically this particular I and them. results is do the acquiring, usually the to very we to system and in neural of some have good the have stores. we also to complex engagement achieve are many SMB of we started starting because that that, to We seen ability integrate related several think stocks become MPOs will develop other and -- higher need all in seen Pago system, Also companies regards struggled it typically payment to terms

likely a it's it we usually but to we it's look develop something -- ourselves. So always into, prefer

Operator

from Ford comes Robert Bank question of next from America. The

Robert Ford

and Can in principality? then across indications also Melimise bit the . And little as a and of behavior adoption subscription incremental are funding how Mexico? about Blue verticals Melimise on and rate the specifically, patterns more well. impacting of you of change early And how other following talk there Brazil marketplace is any

Martin de Los Santos

Martin.

on in we As all this. opened credit the content tiers benefits the the all change -- also that $X, we program: benefits of of is we you this plus had, of including fintech the the as of MercadoLibre. as other the marketplace X Melimise -- X includes the benefits at card quarter, both traditionally use included cash where program the now which from backs, we you traditional have the And know, outside free which which our loyalty total, then shipping priced implemented well did we a when called one,

on, but numbers disclose we very adoptions. positive don't specific have We seen

X the the that lower-priced have program, We new one.

enrolling uses, better users lot a the what platform. people our we seen loyalty then We've more in are to program of into program. engaging engagement past. of better the And seen conversion, effects seen have with a that with We have more similar

share beneficial but refer of too it's to the to very excited still early us. on actual Many all relaunch very to numbers that. money. We're the Blue program, our So a it's about

dollar. on than those with card done are well cash accumulating I giving on accumulating As as done early. users the cash we've back you purchases Mercado It's mean of backs as balances. credit are know, we're mainly They Pago still MercadoLibre it. seen too those expanding cores more

balance accounts to there's actually so So increasing, their but is It's nothing early. far. too really report

Operator

The Suarez from next Joao Citibank. question from comes

Joao Pedro Soares

Two questions on my side.

coupons like interest uptick I looking seems seems XX.XX%. interest your debt, I had car right? increase some The wanted it slight in outstanding first just like environment, the increasing, the one, right? to Brazil, October mean in So households here hear of we're rates to rates thoughts. course, with It there's the Brazil -- to a right, in with

the I Mexico. I you're the origination Could So Mexico still impact much to But and somehow, confident And is it Brazil growing versus how like -- didn't Brazil? you going about are right? just space, understand could right? back it in about very the you thinking this how just question clarify. at keep growing seems macro? please If

Martin de Los Santos

Yes, seeing increase this Brazil. Joao, in rate correct. in be Yes. here. it's Martin We'll It's interest

of increase countries have look interest we the or cost important ability we is of seen to where predict our the rate different an credit or it more X We But is funding much in reality business, X than operate. points at in when defaults.

because biggest new Now products. and feel about improvements we're that's made of the structure confident the again, population segments are reaching of Again, very our the we have accelerating we we lower models, on are that part once cost that risk. of the

does think much macro, debt. not as predict it bit affect overall, this product I So bad to a as

Osvaldo Giménez

by credit to quarter numbers precise we is the if question, Mexico are in Brazil, more building of we on that in you had experience in disclose second the first we prior first ones don't I the we cards a significantly referring faster because the And than was . at year have Mexico to of What basically issuing rate or card did first models. compare the country. part Brazil,

Operator

Beck comes from from Josh question James. next Raymond our And

Unknown Analyst

to center fulfillment Yes. the I about ask ambitions. wanted

of that's in a shorter cost density benefits then terms delivery seeing fulfillment I type also spoke. centers do a more as are you of multiyear Brazil and obviously X I'm maybe in windows. in of and ability You you Mexico. to serve hub cycle. investment What little have higher Is to and think bit And curious, this a

Ariel Szarfsztejn

here. Ariel Josh,

countries We've of the first in multiyear were your capacity is to and that with for need we normalizing tight. we So in change or capacity make required question, demand which there part we'll cycle to we that a the are in and always the the new Mexico forecasting -- The super ambitions. have no order deal growth that other MercadoLibre. we can continue after running in we to that years we in been in in few growth pretend sure to penetration saying building Brazil operate are

have what we think terms investment no we new reality to been changes need on no just in share over of market cycles, as the So continue we years. gaining few direction, doing last

definitely terms of angle expansion. an in geographic To there your is question, of the second part

countries building the We of warehouses announced. have are not the capitals only in main as we

more means retention and hopefully, hence, coming our regionalizing promises that them. to serve also our from better are rates and capacity We equipped that we'll be with better delivery customers faster

of deep have do never and the economics, the I do before, type future. that serving so have of we and the investments modes I saying economics thinking story gone into and past, need we're But investment warehouses thinking users. what continue different from the that we in that as think unit Different the changing unit probably this not type we'll are our disclosure, profiles to growing not is was we were in of and

Martin de Los Santos

investments me business flow complement these cash just as from to that And a are are usual. perspective, let

opened in look quarter, fulfillment last you the was stable X of more several the to percentage relatively which $XXX compared past is a of than at course, If quarters. logistics million, during quarter was CapEx we revenue our this but which centers, as

but So it's as obviously, -- in this couple something cycle. we past usual the an it's is investment of opened fulfillment It's this not more mentioned. as quarter, business quarters, that Ariel not

Operator

question Autonomous. from a follow-up from next Our Elliott Geoffrey is

Geoffrey Elliott

to What customer points periods. G&A I percentage just due refund point. of explanation on happened periods. relates to percentage nonrecurring that which Why expense X.X get there? X certain prior wanted year-on-year, to for refunds X.X for some rose expenses note a There's points that prior customers a

Martin de Los Santos

a is this X.X to date, prepay. in the the back. them advancements, you of credit of which compression on, quarter, which that an terms the on the a user actual there is products few What the change this It's mentioned, to expense refunding when the years margin Most be from Martin installment sorry, now before was to happened quarter, here. because and our made past refund you of Brazil, for users a a we'll consumer base fintech several due but G&A. as days a they faces non-recurring merchant in days related Yes, that we

them if that for it's refund we a cents, So even installment. will few

go So are decided time forward. we it actual not then, We felt forward. past making and per right to the we paid $X.XX that refunds installment but user, per since back in make years. is very those very, in for to advance small going to them that refund our are doing those $X where this a And it days, average on few change are users that up we was to thing for are do the make it going we are several

So this we is this that the quarter. registered one-off

Operator

Our comes question next from IBBA. from Rodrigo Gastim

Unknown Analyst

the Just X questions program. loyalty here on

margin program seeing pressure you're coming program this the that if given any kind the you loyalty of from First, quarter.

we're on are the plan unit that pressure we any first that's margin that the how one, essential And plan economics front, So the point. total much -- between this on launched. main the the difference investing just what second

just curious how main the see that. of terms in So and to you here economics. the are understand difference What KPIs

Martin de Los Santos

here. Martin It's

the margin I question your loyalty think of is potential because -- margin program. pressures to related

we mentioning still cash marketing we the started up. -- before, The we it's all, loyalty that that investing we're benefits the back, the is program. so and of the to all ramping dollars relocating this I First quarter, way are in benefits was Fintech-related

incremental whatever make So should we compensate keep investment that in on don't of generate expect pressure. expectation margin loyalty is also that we the But mind program significant that that volumes to program. the to bring

Unknown Executive

to in our just Bear the our subscription need essential economics, we while subscription, for of but details big don't our of in content. to the chunk have to total we the type collect disclose as while on basically same we within with users unit mind our that on ecosystem, program. complement don't the part pay content, pay we subscription, in our Disney for So a agreement we what are giving whole of benefits

the from benefits basically, our or help we we the that revenues the subscription So users. us sustain with for get are do pay providing

Operator

And Jamie Susquehanna. a the follow-up question from from Friedman is next

James Friedman

you I significantly trends. consumption could marketplace on was driven some in or share just hoping described further as elaborate you growth that market by But like being in and presentation it elaborate side. see observations in I Argentina looking here you environment the Argentina? what improving the the initiatives about could . Argentina

Ariel Szarfsztejn

Jamie, here. Ariel

roll business. sellers improvement, out So a our us our around presentation, our we But macro an and and as consumer installment, something performance, shipping the our rate hand, conversion right? assortment, to prices, We've tailwind business for the the is there improvement continue in we X from that own boost while general to of in role see improvement, friction health Argentina. yes, like behavior rates and taken a on and in care growth taking help also there also improvement in So play our frequency and experience expand mentioned removing is It's, we of preserving our buyers et to scenario users. in drive to the P&L cetera. measures definitely terms the an

are But very the and saw well, seeing satisfied performing is very, demand we remain over last the are in what that months. general, few we optimistic we in with we country, the turnaround

Unknown Executive

Yes.

also quarter in also rates we good that, product, good and NPLs very with credit business, very -- in we're accelerated on this under our seeing fintech interest spreads complement down, traction coming to credit Just on the Argentina. Argentina. control

the side. So as very from positive well fintech signs

Operator

Are questions the remarks. concludes more turn the session. question-and-answer to no back closing Martin This los conference queue. any Santos over in I'd . our de like to for

Martin de Los Santos

and for had Thanks, We the our throughout of joining quarter everybody, tonight. results call great strong business. growth another

on we which to mentioned, As quarter Pago during logistics, critical credits, is strategic as bringing volume invested continue for we line. this is Mercado as well which on

opportunities to us, -- focusing have investing long-term positioned we sustainable well profitable behind growth growth. that very of are discipline, are all and capture the those with ahead and on We we investment the

for ago. him of for us, a us years Let a all MercadoLibre months of me those to work couple of he take who a a passed Mario He away left on all mark Vasquez, minute strong chance to a member who now XX with years. remember board for had very was

for So we are will call, close And thank miss and to going him. joining. you the now again

Operator

concluded. presentation. now attending The for has you conference today's Thank

now disconnect. You may

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