MercadoLibre [MELI]
As of 2026-07-30. Spot $1,833.15. Diluted shares 50.697m. Market cap $92.94bn.
Sources: FY2025 10-K (filed 2026-02-25, meli-20251231.htm), Q1'26 10-Q (filed 2026-05-08,
meli-20260331.htm), Alpha Vantage normalized statements (81 quarters), Alpaca daily bars.
MELI is two businesses stapled together and the 10-K discloses both volumes. The decomposition is the thesis.
| FY2023 | FY2024 | FY2025 | Q1'25 | Q1'26 | |
|---|---|---|---|---|---|
| GMV ($m) | 44,749 | 51,467 | 65,037 | 13,330 | 18,951 |
| GMV growth | — | +15.0% | +26.4% | — | +42.2% |
| Total payment volume ($m) | 146,738 | 196,660 | 277,823 | 58,303 | 87,186 |
| TPV growth | — | +34.0% | +41.3% | — | +49.5% |
| Acquiring TPV ($m) | 115,953 | 142,200 | 188,105 | 40,317 | 55,993 |
| Items sold (m) | 1,404 | 1,787 | 2,429 | 492 | 722 |
| Fintech MAU (m) | 46 | 61 | 78 | 64 | 83 |
| Unique active buyers (m) | 85 | 100 | 121 | 67 | 84 |
| NIMAL | 36.2% | 28.2% | 22.4% | 22.7% | 17.8% |
Commerce. Commerce revenue includes first-party product sales, which are not a take rate. Both cuts:
| Q1'25 | Q1'26 | Δ | |
|---|---|---|---|
| Commerce revenue / GMV (headline) | 24.78% | 25.69% | +0.91pp |
| Commerce services revenue / GMV (ex-1P) | 20.16% | 19.73% | −0.43pp |
Net product revenues were $1,130m in Q1'26 vs $615m in Q1'25 (+83.7%), against total revenue +49.0%. The headline commerce take rate rises only because first-party inventory sales are growing at twice the company rate. On the marketplace-services basis the take rate is falling. 1P revenue is booked gross against inventory cost; it adds revenue optics, not marketplace economics.
The company confirms the mechanism in its own words: the FY2025 commerce services increase was "mainly related to a 26.4% increase in gross merchandise volume and higher flat fee contributions for low gross merchandise volume transactions" — i.e. genuine monetisation on small baskets — but also that shipping carrier costs netted against revenue fell $42m "mainly due to an increase in the share of shipping services where we act as principal, as opposed to agent". A principal/agent flip inside the same line inflates reported revenue with no economics attached. That is the same class of distortion as BKNG's merchant shift and RBA's inventory mix, found here inside a single sub-line.
Fintech.
| Q1'25 | Q1'26 | Δ | |
|---|---|---|---|
| Fintech revenue / TPV | 4.51% | 4.56% | +0.05pp |
| Fintech revenue / Acquiring TPV | 6.53% | 7.10% | +0.57pp |
Flat on total TPV. But the fintech "take rate" is not a take rate — it blends payment-processing fees with credit interest income. FY2025's $3,981m fintech revenue increase splits $2,258m Credits / $1,716m Financial services. In Q1'26 the split is $866m Credits / $474m Financial services: 64.6% of fintech's incremental revenue is lending, not payments. Payment monetisation is roughly flat; the fintech growth story is a balance sheet expanding.
Verdict on the analytical question: growth is overwhelmingly VOLUME, and the volume is real. GMV +42.2% and TPV +49.5% in Q1'26 are the load-bearing facts, and neither is an accounting artifact. But the revenue growth rate of +49.0% is flattered by three separate gross-ups — 1P product sales, the shipping principal flip, and credit interest booked gross against provisions in opex — so revenue overstates the rate at which marketplace economics are compounding.
This is where MELI can manufacture growth, so it gets the most scrutiny. Findings, in order of severity.
| FY2023 | FY2024 | FY2025 | Q1'25 | Q1'26 | |
|---|---|---|---|---|---|
| Provision for doubtful accounts ($m) | 1,050 | 1,858 | 3,091 | 603 | 1,244 |
| % of revenue | 7.0% | 8.9% | 10.7% | 10.2% | 14.1% |
| Operating margin | 14.1% | 12.7% | 11.1% | 12.9% | 6.9% |
Q1'26 operating margin fell 6.0pp year over year. Provisions rose 3.9pp of revenue over the same period — 65% of the entire compression. MELI attributes the FY2025 rise to "the increase in originations growth at 61% (mainly related to the credit card, consumer and merchant products)."
Loans receivable, gross: $12,508m (2025) vs $6,573m (2024), +90.3%.
| 2024 | 2025 | |
|---|---|---|
| Total past due / portfolio | 26.8% | 26.3% |
| 91–360 days past due (non-accrual) / portfolio | 17.5% | 16.8% |
| Allowance / gross loans | 25.5% | 25.1% |
| Renegotiations / portfolio | 1.4% | 1.6% |
| Write-offs ($m) | 885 | 1,796 |
This does not support the "loosening credit to manufacture revenue" hypothesis on the stated delinquency metrics. Past-due and non-accrual ratios improved slightly while the book nearly doubled. I looked specifically for the AAOI/AIOT pattern and it is not here.
What is here is NIMAL: 36.2% → 28.2% → 22.4% → 17.8%. Net interest margin after losses has fallen 18.4pp in nine quarters. Management's own definition — credit revenue less funding costs and provisions, over average gross loans — makes this the cleanest available measure of unit economics on the credit book, and it has been cut in half. The stated cause is mix: credit cards went from $2,639m to $5,656m of the book (40.2% → 45.2%), and credit cards are lower-yield. So the growth is real and the risk is contained, but each incremental dollar of loan book earns roughly half what it earned in 2023. A business growing volume 90% while halving unit economics is a different investment from one compounding at a stable margin, and the reported revenue line does not distinguish them.
Per the DATA_DEFECTS instruction to read the cash-flow statement and notes rather than trusting any DSO variant:
"The gain arising from sales of credit card receivables, net of the costs recognized on sale of those credit card receivables, is $1,124 million and $1,246 million, for the years ended December 31, 2025 and 2024" — FY2025 10-K, Note 2. "$367 million and $255 million, for the three-month periods ended March 31, 2026 and 2025" — Q1'26 10-Q.
MELI runs a receivables-sale programme and books the gain in revenue. Magnitude: - FY2025: $1,124m = 3.89% of revenue; FY2024 $1,246m = 6.00%. - Q1'26: $367m = 4.15% of revenue; Q1'25 $255m = 4.30%.
Two consequences. First, the FY2025 gain fell 9.8% in absolute dollars while revenue rose 39.1% — so this line was a −0.6pp drag on FY2025 growth, and the underlying non-factoring revenue grew faster than reported. That is the favourable direction, and worth saying. Second, no DSO computed from the balance sheet is meaningful here, because the receivable is sold before it ages. Accounts payable also carries $1,371m (2025) / $898m (2024) relating to credit-card receivable sales in Argentina, and there is a supplier-finance programme with $616m (2025) / $425m (2024) of confirmed obligations outstanding. Both are debt-like and neither appears in the screen's net-cash construction.
Argentina has been accounted for as highly inflationary since 1 July 2018, functional currency USD. Q1'26 disclosures: - Argentine quarterly inflation 9.4%; inter-annual average 32.7%. - Official rate 1,382.00 (31-Mar-26) vs 1,455.00 (31-Dec-25); average rate 1,417.76 vs 1,057.00 — a 34.1% year-over-year devaluation. - Brazil: "average decrease of Brazil's exchange rate against U.S. dollar of 10.1%" — a BRL appreciation, a tailwind to reported USD revenue.
MELI publishes the FX-neutral bridge, which is the disclosure the brief asks for:
| Q1'26 | As reported | FX-neutral |
|---|---|---|
| Revenue growth | +49.0% | +45.5% |
| Gross profit growth | +39.4% | +38.5% |
| Operating expense growth | +61.9% | +57.8% |
| Income from operations | −19.9% | −12.2% |
FX contributed +3.5pp of the +49.0% headline revenue growth, and operating income declined on both bases. Note the second row of that table is the important one: FX-neutral opex grew 57.8% against FX-neutral revenue of 45.5%. The margin compression is not an FX artifact.
"For the three-month periods ended March 31, 2026 and 2025, no single customer accounted for more than 5.0% of our net revenues and financial income."
Tested for the AAOI pattern; not present.
EARNINGS_CALL_TRANSCRIPT coverage was not retrieved within the time box; INDETERMINATE, recorded
rather than fabricated. The filing-based substitute, which is auditable: across the FY2025 10-K and the
Q1'26 10-Q, "loans receivable" appears 72 times in the 10-K, "credit card" 94 times, "securitiz" 37
times, and "take rate" zero* times in either document. The company does not use the vocabulary of
marketplace monetisation anywhere in its own filings; it describes itself in volume and credit terms.
That is itself a finding about where management's attention sits.
Named, evidenced, and forward: the credit card product. It went from $2,639m to $5,656m of gross loans in twelve months (+114%), is now 45.2% of the book, is explicitly named as the driver of both the 61% origination growth and the NIMAL decline, and carries a disclosed off-balance-sheet unused commitment exposure against which CECL is separately provided. Its expansion is the single mechanism that determines whether MELI's margin troughs in FY2026 or keeps falling: credit cards front-load CECL at origination while interest accrues over the life of the balance, so a book growing at 114% structurally understates its own steady-state margin. When origination growth decelerates to the revenue growth rate, the provision line stops outrunning revenue and roughly 3–4pp of operating margin returns without any operational improvement. That is the underwritable claim.
| Item | Screen / vendor said | Correct | Magnitude |
|---|---|---|---|
net_cash |
−$4,277m (Cash + STI − LongTermDebt) | −$5,748m per the company's own net-debt reconciliation (Q1'26 10-Q), lease-inclusive | $1,471m, 25.6% understated; EV understated 1.5% |
op_margin_pct = 11.1% at margin_period 2025-12-31 |
labelled as the margin | that is FY2025, not TTM. TTM through Q1'26 is 9.6%; latest quarter 6.9% | −1.5pp vs TTM, −4.2pp vs latest quarter |
terminal_margin 0.111, basis "own trailing operating margin" |
— | it is the FY2025 figure on a declining trajectory (14.1→12.7→11.1→9.6), i.e. a ramp endpoint in the wrong direction | see valuation |
AV OVERVIEW.OperatingMarginTTM |
6.91% | true TTM 9.6% | single-quarter defect confirmed on MELI (6.91% ≈ Q1'26's 6.9%) — same failure recorded for ATRC/BSX/DXCM |
normalized_fcf.py trailing FCF margin |
37.3% | company's own adjusted FCF was −$56m in Q1'26 (−0.6% of revenue) and +$58m in Q1'25 | ~38pp, direction manufactures a false PASS — see §6 |
AV shortLongTermDebtTotal |
$12,345m | 10-Q total debt $12,345m | clean, 0.0% error — reported per the "verify per name" instruction |
AV SPLITS |
{"data": []} |
no splits; 50,697,182 weighted shares matches the 10-Q cover exactly | clean |
| GMV / unique active buyers definitions | treated as a continuous series | redefined from Q2 2025 to include food delivery, contribution unquantified | INDETERMINATE magnitude, known upward direction |
normalized_fcf.py --ticker MELI returns a 37.3% trailing FCF margin and a 25.7% "normalized" margin,
computed as (operating cash flow − capex) / revenue. Both are wrong for this company, by a wide margin,
and in the direction that manufactures a false PASS. From the FY2025 cash-flow statement:
Net cash provided by operating activities 12,116 41.9% of revenue
of which: Funds payable to customers +5,341 payment float, not earnings
of which: Amounts payable, credit/debit card transactions +1,592 payment float, not earnings
Investing: Changes in loans receivable, net (6,659) <- the loan book, in INVESTING
Investing: Property, equipment and intangibles (1,343)
| Basis | FY2025 FCF | Margin |
|---|---|---|
| Tool's basis: OCF − capex | $10,773m | 37.3% |
| Less loan-book growth (a real cash outflow, parked in investing) | $4,114m | 14.2% |
| Less payment-float growth (a funding source, not earnings) | −$2,819m | −9.8% |
| Company's own "adjusted free cash flow", Q1'26 | −$56m | −0.6% |
A 47-percentage-point spread depending on definition. The tool's OCF−capex convention silently assumes that a lending business's loan book is free, because US GAAP puts loan originations in investing. DATA_DEFECTS records the sign-dependent interim-FCF bias; this is a scope-dependent one, and on a fintech it is larger. I use 14.2% as the base and show the full surface in the valuation.
Reported receivables are not the right denominator here because credit-card receivables are sold (§2c) and loans sit in a separate caption. On the accounts-receivable caption alone, Q1'26 receivables rose $887m against $71m in Q1'25 (cash-flow statement), against revenue +49.0% — a working-capital build roughly 12x larger than the prior year on revenue 1.5x larger. Directionally adverse, but uninterpretable as a DSO because the balance is partially sold each period. Recorded as INDETERMINATE with the reason, per the rule that a false disclosure is worse than an absent one.