MercadoLibre (MELI) Stock Drops 7% as Earnings Miss Overshadows Revenue Beat

TLDR

• MELI fell over 7% in after-hours trading after Q1 earnings missed analyst estimates
• EPS came in at $8.23, missing the $9.37 consensus by $1.14
• Revenue jumped 49% year-over-year to $8.85 billion, beating estimates by $530 million
• Brazil unique buyer growth hit 32% YoY — the fastest pace in five years
• The credit portfolio grew 87% YoY to $14.6 billion, the largest quarterly increase in nominal terms

MercadoLibre (MELI) dropped more than 7% in after-hours trading Thursday after Q1 2026 earnings missed analyst expectations, despite the company posting its fastest revenue growth in nearly four years.

MercadoLibre, Inc., MELI

The stock had gained 1.6% during the regular session before the results hit.

MELI reported adjusted EPS of $8.23, falling short of the $9.37 analyst consensus by $1.14. That figure also came in below last year’s $9.74.

Revenue for the quarter reached $8.85 billion, up 49% year-over-year and ahead of the $8.29 billion consensus estimate by $530 million. It was the fastest revenue growth rate since Q2 2022.

Gross merchandise volume rose 42% year-over-year across the platform. Mexico led with a 48% jump, while Brazil posted a 54% increase. Total payment volume climbed 50% to $87.2 billion.

Net income totalled $417 million, with a 4.7% margin. Income from operations came in at $611 million, reflecting a 6.9% operating margin. Free cash flow was -$56 million, broadly in line with Q1 of last year.

MercadoLibre pointed to its decision to lower the free shipping threshold in Brazil as a key driver. Unique buyers in Brazil grew 32% year-over-year — the fastest in five years. Items sold surged 56% YoY, more than double the 26% growth recorded in Q2 2025 before the threshold change.

Brazil’s GMV grew 38% YoY on a foreign exchange-neutral basis.

Fintech Growth Picks Up Pace

The fintech segment continued to expand. Monthly active users reached 83 million, up 29% year-over-year.

The credit portfolio grew 87% YoY to $14.6 billion — the largest quarterly increase in nominal terms. Assets under management rose 77% YoY to nearly $20 billion.

Commerce revenue reached $5 billion, up 47% YoY. Fintech revenue totalled $4 billion, growing 51% YoY.

Advertising revenue grew 73% YoY in USD. MercadoLibre said its Mercado Ads unit is now the fastest-growing advertising player in the region.

AI Now Powering Search

MercadoLibre rolled out its first AI-powered search experience in Q1 2026, rebuilding the entire search architecture around large language models.

The company said the shift away from keyword-based search improved product relevance in Brazil and Mexico, leading to higher conversion rates and better click-through rates for sponsored listings — both translating into additional revenue.

The EPS miss of $1.14 against consensus was the primary driver of the after-hours sell-off, even as the revenue beat and operational metrics remained broadly strong.

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