Mercado Livre released its financial statement for the first quarter of 2026 and recorded a net profit of US$417 million during the period, a remains 15.6% in the annual comparison. The result was below analysts’ expectations, impacted by investments in logistics, credit expansion and free shipping.
In return, the company presented an expressive 49% growth in revenuewhich reached US$8.8 billion in the quarter. Despite the negative reaction from investors after the release of the numbers, Richard Cathcart, responsible for investor relations at Mercado Livre, defended the strategy adopted by the company.
Cathcart stated that the not short-term profitability.
“Our priority is to ensure that we do not miss any of these opportunities,” he declared, referring to the possibilities for expanding e-commerce and financial inclusion in Latin America. According to him, the company is “building a company for the next decade, not the next year and certainly not the next quarter.”
The executive highlights that growing 49% per year in a company with revenue of almost US$30 billion in the last 12 months “is not easy at all.” He acknowledged that they cause margin compression in the short term, but highlighted that all engagement metrics are improving and strengthening.
Brazil and the free shipping strategy
Brazil stood out in the quarter, with an acceleration in gross merchandise volume (GMV), an increase in users and items sold. In June last year, the company reduced the minimum value to from R$79 to R$19 in the country. Cathcart explained that this is the third reduction since free shipping was introduced in Brazil in 2017, and is part of a structural strategy lasting almost a decade.
“We’re doing it because we have the data that shows it’s one of the biggest factors that brings people from the physical world to the online world,” Cathcart said. He added that the presence of e-commerce in Latin America is still relatively low compared to markets such as the United States and China, which represents a great growth opportunity for the company.
Mercado Pago and credit card
Cathcart also addressed the role of Mercado Pago in the company’s results. According to him, the credit card is “a key piece” for the strategy of becoming the largest digital bank in Latin America, with relevant operations in Brazil, Mexico and Argentina. Card issuance exceeds one million per quarter in Brazil alone, with default metrics that improved year on year.
Regarding the future of Mercado Pago in relation to the marketplace, Cathcart was direct: “The answer is honest, we don’t know.” He acknowledged that the financial arm is growing at a faster pace than the marketplace at the moment, but stated that both sides of the company still have a lot of room to grow, and that current investments aim to generate more engagement, scale and profitability in the long term.
Artificial intelligence already generates results
Artificial intelligence was also a central topic of the conversation. Cathcart stated that the company is already capturing concrete benefits from technology on two main fronts: efficiency and productivity. In customer service, AI tools they now resolve problems more quickly and satisfactorily.
In the technology area, team productivity grew between 7 and 10 times more than the 8% increase in headcount recorded in the first quarter.
Furthermore, the company implemented a new search architecture in the marketplace based on artificial intelligence, capable of interpreting the intention behind user searches, and not just the words typed.
Cathcart said that these advances are already generating incremental revenuebut the potential of the technology is still in its infancy.
“We are super optimistic about the potential of the technology, because even though we have only implemented it over the last 12, 18 months, we are already seeing exceptional results”, he concluded.
