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# MercadoLibre Revenue Jumps 45% While Free Shipping Pushes Operating Income Down 6%
- URL: https://www.bullished.co/mercadolibre-revenue-jumps-45-while-free-shipping-pushes-operating-income-down-6-81cf5989/
- Published: 2026-11-04T23:38:44.000Z
- Updated: 2026-11-04T23:38:44.000Z
- Description: The Latin American e-commerce company says it is choosing to give up near-term margin to build shopping habits, with operating income at $676 million.
- Author: Matteo Parrino
- Tags: SEC Filings, MELI, Industry: Consumer Discretionary

[MercadoLibre](https://www.bullished.co/tag/meli/), which runs an online marketplace and the Mercado Pago financial services platform across Latin America, [reported](https://www.sec.gov/Archives/edgar/data/0001099590/000109959026000027/meli-20260930xex991.htm?ref=bullished.co) third-quarter revenue and financial income of $10,750 million, up 45% from a year earlier, while income from operations fell 6% to $676 million. The company said the margin squeeze reflects a deliberate choice to spend on free shipping, new warehouse capacity and Brazilian affiliate marketing.

## Growth up, operating profit down

Revenue rose 41% excluding currency effects. Operating margin was 6.3%, which the company said was 40 basis points (0.40 percentage points) below the second quarter.

Net income rose 6% to [$448 million](https://www.wfaa.com/article/syndication/associatedpress/mercadolibre-q3-earnings-snapshot/616-ab8e9ea5-7774-4212-8b79-1319f99efccc?ref=bullished.co), or $8.83 per share. A lower tax rate and smaller foreign-exchange losses of $72 million, against $102 million a year earlier, more than offset the weaker operating result.

Gross merchandise volume [rose 38%](https://finance.yahoo.com/markets/stocks/articles/mercadolibre-falls-earnings-miss-margin-214342800.html?ref=bullished.co) to about $23 billion, and total payment volume rose 53% to about $109 billion. The credit portfolio grew 62% to almost $18 billion. Adjusted free cash flow was $285 million, after $503 million of capital spending.

## Where the margin went

Compared with the second quarter, the company cited a net shipping headwind of 60 basis points and higher sales and marketing spend of 40 basis points. Shipping charges rose 60 basis points, against a 100 basis point increase in shipping costs.

The company pointed to three causes: less revenue per shipment from more free shipping and smaller orders, higher energy prices, and a shipping network expansion that added almost 20% to fulfillment square meters from the second quarter. It said adding capacity before peak season is a yearly pattern.

Sales and marketing rose to 11.6% of net revenue after what the company called a tactical decision to invest more in its affiliates program in Brazil.

## Paying for a shopping habit

The shareholder letter frames the trade-off plainly: the company is investing part of today's margin to move commerce and financial services online. Its buyers make 12 purchases a year, against more than 50 online purchases for consumers in more developed markets.

Lowering Brazil's free-shipping threshold in June 2025 accelerated growth but cut net shipping margin by around 200 basis points as a share of merchandise volume since the first quarter of 2025\. In Brazil, items per buyer grew 16% in the quarter.

Management hosted a video and conference call at 5:00 p.m. Eastern on Wednesday to take investor questions.

The company said its structural profit drivers, including lower cost per shipment and a credit book that scales profitably, improved again this quarter, and that the benefit reaches reported margins gradually.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — MERCADOLIBRE INC (MELI)](https://www.sec.gov/Archives/edgar/data/0001099590/000109959026000027/meli-20261104.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit meli-20260930xex991.htm — MERCADOLIBRE INC 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001099590/000109959026000027/meli-20260930xex991.htm?ref=bullished.co) — SEC EDGAR
- [MercadoLibre Earnings: Rapid Revenue Growth but Ongoing Cost Pressure From Aggressive Investments | Morningstar](https://www.morningstar.com/company-reports/1508057-mercadolibre-earnings-rapid-revenue-growth-but-ongoing-cost-pressure-from-aggressive-investments?listing=0P00009FL7&ref=bullished.co) — morningstar.com
- [MercadoLibre Stock Moves Lower After Mixed Q3 Results](https://www.benzinga.com/markets/earnings/26/11/62896036/mercadolibre-stock-moves-lower-after-mixed-q3-results?ref=bullished.co) — benzinga.com
- [MercadoLibre falls on earnings miss, margin pressure](https://finance.yahoo.com/markets/stocks/articles/mercadolibre-falls-earnings-miss-margin-214342800.html?ref=bullished.co) — Yahoo Finance
- [Can MELI's Cross-Platform Users Unlock Outsized Profit Growth?](https://finance.yahoo.com/markets/stocks/articles/melis-cross-platform-users-unlock-155200677.html?ref=bullished.co) — Yahoo Finance
- [MercadoLibre: Q3 Earnings Snapshot | wfaa.com](https://www.wfaa.com/article/syndication/associatedpress/mercadolibre-q3-earnings-snapshot/616-ab8e9ea5-7774-4212-8b79-1319f99efccc?ref=bullished.co) — Associated Press

### More on MercadoLibre

- [MercadoLibre CFO Calls Its 6.3% Operating Margin A Deliberate Trade For Engagement](https://www.bullished.co/mercadolibre-cfo-calls-its-6-3-operating-margin-a-deliberate-trade-for-engagement-456bd7ff/)

[All MercadoLibre (MELI) coverage →](https://www.bullished.co/tag/meli/)