MercadoLibre Profit Misses Estimates as Logistics Spending Cuts Margins, Revenue Tops Forecasts

MercadoLibre reported third quarter results on Wednesday, November 4, 2026, that missed profit estimates while revenue came in ahead of forecasts, as heavier spending on logistics and free shipping cut into margins.

The Latin American e-commerce and payments company posted net income of $448 million for the July to September period. Analysts expected $476 million, according to LSEG data cited by Reuters. Net profit rose about 6 percent from a year earlier, returning to growth after three straight quarterly declines.

Revenue told a stronger story. Net revenue and financial income rose 45 percent to $10.75 billion, ahead of the $10.66 billion analyst consensus, with Brazil leading growth. On a currency neutral basis, revenue growth was 41 percent, down from 43 percent in the second quarter. That marked a fourth straight quarterly slowdown, according to Motley Fool reporting on the results.

Margins narrow as capacity grows

Operating income fell 6 percent to $676 million. Earnings were $8.83 a share, below the $9.36 estimate. The operating margin fell to 6.3 percent, down from nearly 10 percent a year earlier and below the 7 percent analysts expected.

The company tied the pressure to investment. MercadoLibre increased fulfillment capacity by about 20 percent from the previous quarter, compared with 10 percent in the same period last year, as it prepared for major promotional events including Black Friday. Margins were also hurt by the higher cost of free shipping after expansions in Argentina and Brazil, increased marketing spending in Brazil, and rising fuel prices. The company raised shipping fees for merchants in response to the fuel costs.

Chief Financial Officer Martin de los Santos framed the spending as a timing cost. "The quarter when you are building capacity, you don't have the revenues yet, so you have the cost. That creates some margin compression that you make up the following quarter," he told Reuters.

He added: "Our investments are working. We are delivering tremendous growth, a lot of engagement, people are buying more frequently. We continue to be very optimistic about the long-term margin trajectory."

Fintech growth also slows

At Mercado Pago, the fintech arm, the credit portfolio grew 62 percent from a year earlier to almost $18 billion, though that pace slowed from recent quarters. The provision for doubtful accounts rose 65 percent to $1.34 billion, from $815 million.

Fintech revenue growth on a currency neutral basis slowed to 40 percent, from 47 percent in the second quarter, according to Motley Fool.

Shares fall after hours

Shares fell in extended trading after the results. Reuters reporting put the drop at about 8 percent, while Motley Fool put the early after hours move at about 10 percent. The stock is down about 13 percent this year, after rising nearly 140 percent between 2023 and 2025. The shareholder letter gave no financial guidance.

The results leave a clear trade off for investors. Sales and lending are still growing fast, led by Brazil, but the cost of building warehouses, expanding free shipping and funding credit is arriving before the revenue it is meant to support.