Mercadolibre Inc Q4 FY2025 Earnings Call

Hello, everyone, and welcome to the MercadoLibre Earnings Conference Call for the quarter ended December 31, 2025. Thank you for joining us. I'm Richard Cathcart, MercadoLibre's Investor Relations Officer. Today, we will share our quarterly highlights on video, after which we will begin our live Q&A session with our management team. Before we go on to discuss our results for the fourth quarter of 2025, I remind you that management may make or refer to and this presentation may contain forward-looking statements and non-GAAP measures. So please refer to the disclaimer on the screen, which will also be available in our earnings materials on our Investor Relations website. Please note that this call is being recorded, and a replay will be made available on our IR website also. With that, let's begin with a short message from our CFO.

Good evening, everyone, and thank you for joining us. I'm pleased to report that we ended 2025 with robust operating trends that reinforce the strength of the MercadoLibre ecosystem. Our relentless focus on customer experience translated directly into strong financial performance with fourth quarter net revenues growth of 45% year-over-year. Our performance is supported by two primary growth drivers: the acceleration of our commerce business, and the rapid adoption and structural expansion of our fintech services. Crucially, both of these are increasingly supported by the tangible impact of our investments in artificial intelligence. Turning to commerce. In Brazil, our largest market, GMV grew an impressive 35% year-over-year alongside a 45% increase in sold items. This acceleration is the result of our strategic investments to enhance the value proposition, most notably the decision to lower the free shipping threshold. More free shipping is driving higher purchase frequency and bringing new buyers into the ecosystem. This volume is translating directly into efficiency. Our logistics network absorbed the increase in volumes while driving productivity gains, proving our ability to scale effectively. Our value proposition is generating traction in Mexico, too, where GMV also grew 35%. Across our ecosystem, we are seeing clear evidence that our investments in artificial intelligence are accelerating revenue. In advertising, AI is powering our bidding algorithms and automated campaign tools are generating better returns for sellers. This improved performance is driving higher adoption and capturing a larger share of advertisers' wallet, propelling the business to grow 67%. AI is also transforming the effectiveness of our acquiring sales force. In Brazil, these tools helped identify high-value merchants faster, resulting in higher TPV per merchant and shortened payback periods. This contributed to acquiring TPV growing 25% in Brazil and 50% in Mexico. Our Mercado Pago AI assistant is solving 87% of interactions without the need of human support. Millions of users already adopt this conversational tool to manage their credit card, make transfers and understand their credit offerings. In fintech services, we reached a historic milestone. Mercado Pago now holds the leading Net Promoter Score in Brazil, Mexico, Argentina and Chile. Monthly active users are growing close to 30% for 10 consecutive quarters. Our credit portfolio nearly doubled year-over-year to $12.5 billion, including almost 3 million new credit cards issued in Q4 alone. Assets under management are close to $19 billion growing at 78% year-over-year. This is helping us to increase principality amongst our users. Regarding our financial performance, our revenues full year growth was an impressive 39%. Income from operations grew 22% for the full year. The margin compression reflects our decision to invest in the areas of the business with the greatest long-term growth opportunity, especially shipping and credit card expansion. We remain confident these investments strengthen our ecosystem, deepen our competitive advantages and expand the long-term growth runway in a region where both e-commerce and financial services remain meaningfully underpenetrated. We enter 2026 in a position of strength. All our business units are growing at a fast pace, demonstrating that these investments are already generating results and unlocking long-term value. We are as excited as always with the opportunities ahead. And now we open up to your questions.

Our first question today is from Andrew Ruben with Morgan Stanley.

Congratulations on the growth this quarter. It was helpful you mentioned in the release the 5 to 6 percentage point margin impact from factors like free shipping, 1P, cross-border, and credit card investments. Perhaps it makes sense to discuss these individually, considering that cross-border might be more relevant than credit card investments. I'm interested in understanding your position in this investment cycle. We recognize your disciplined approach, but where do you see these investments currently at peak intensity, and where do you anticipate a more extended cycle?

Thank you for your question, Andrew. I appreciate the opportunity to clarify. We've been discussing our investments and their results, but I want to highlight the specifics of these investments and their impact on margin compression. We focused on key areas such as reducing the shipping threshold last year in Brazil. We're also investing in the credit card business in Brazil, Mexico, and Argentina, while our 1P continues its path to profitability, though it is not yet profitable on its own. Similarly, the CBT is expanding to the China and U.S. corridor, along with additional smaller countries where we plan to invest as we scale. All of this together has created margin pressure of approximately 5 to 6 percentage points. This information was included in our letter for your clarity. Regarding the trajectory, it aligns with our previous discussions. CBT is profitable when fulfilled locally, but international fulfillment needs to scale, which will continue to impact our margins. The 1P business remains profitable on a variable basis before accounting for central and indirect costs, and we anticipate that scale will help enhance profitability. The credit card segment, which Osvaldo will elaborate on during the Q&A, is showing improved profitability, especially in Brazil, where a substantial portion of the portfolio is becoming profitable. There are many moving parts; each business is growing and progressing positively, despite some experiencing faster growth than others. Ultimately, we are confident in our investments aimed at long-term opportunities and in enhancing the user experience on our platform. In this quarter, we recorded our highest NPS levels in commerce and fintech across Argentina, Brazil, and Mexico, which reflects the effectiveness of our investment strategies. We feel very comfortable with our ongoing investments in our ecosystem.

The next question is from Irma Sgarz with Goldman Sachs.

So quick question on the direct contribution margin in Argentina, which was down a little bit quarter-over-quarter. And I know there were some specific pressures last quarter that perhaps you managed to address this quarter in terms of repricing of the credit spreads, whereas others may have still lasted, especially on the logistics and shipping side. And I know fourth quarter is also more promotional in general. But I was just hoping if you could break it down for us a little bit more and how we should think about this margin going into 2026 just in terms of some of those pressure points rather than specific guidance. And the other question I had was just as you had some very interesting comments around how you deploy AI across the demand and search side as well as the supply side for merchants. How one of the debates around the Agentic commerce obviously relates to the long-term opportunity for ad monetization. So I was hoping you could perhaps share some of your thoughts about or early initial thoughts about how you think about the risks and preparing for some of those risks of ad monetization moving further up the funnel.

Martin here. I'll address the first part. We are experiencing some compression in Argentina. It's important to note that Argentina remains our most profitable market in terms of margins. However, we observed some compression primarily due to fulfillment costs. Recently, we opened a few new fulfillment centers, which led to an increase in year-on-year COGS. Additionally, we've seen provisions for bad debt related to the credit card we launched in the middle of last year, contributing to the compression. The credit card requires upfront investments, and there has been a year-on-year rise in funding costs. While it's true that, sequentially, the funding cost of our credit portfolio decreased in Q4 compared to Q3, it is still higher than it was a year ago. These are the main factors behind the compression we experienced this quarter.

Irma, this is Ariel. Let me step back to address your question about AI and its impact on our revenues, starting with the concept of Agentic commerce and its potential to disintermediate. It's still a bit early to tell, but we believe that just addressing one aspect of the value chain won't fundamentally change the market dynamics. The key remains creating the best overall experience for our customers. Searching for items is important, but factors like reading reviews, timely package delivery, a broad selection, competitive pricing, effective financing options, fraud prevention, and excellent customer support are also crucial in influencing purchasing decisions. Additionally, we are focusing our efforts on developing our own agentic experience at MercadoLibre. We are confident that we possess valuable first-party data that allows us to build superior search and recommendation systems, enhancing the agentic experience enabled by new technologies. If Agentic commerce advances, it could quicken the transition from offline to online retail. This positions us well to capture advertising revenue in the future, as we envision MercadoLibre as the primary destination for online shopping. Furthermore, we acknowledge that Agentic commerce will also happen outside of MercadoLibre, which represents an additional opportunity for others in the market. Currently, we offer advertising services to third parties using our technology stack, including collaborations with Google Ad Manager, Disney, Roku, and HBO Max. Our unique data, customer insights, and attribution capabilities set us apart in a competitive landscape. In summary, we are confident in MercadoLibre's ability to drive traffic with our own agentic experiences. We see advertising as a significant revenue opportunity in an environment influenced by Agentic commerce, which could accelerate the shift of advertising expenditure from traditional offline channels to digital, further expanding our opportunities. We remain optimistic and focused, understanding that we need to continually invest in our developers to create the best advertising tech stack and agentic experience within MercadoLibre.

The next question is from Bob Ford with Bank of America.

Just to expand on the discussion on agentic solutions. The press release comments on the agentic solution for Pago in terms of handling queries without human intervention. But the functionality appears to be far more sophisticated than that. And I was curious, how is that Pago agent increasing engagement impacting borrowing or savings behavior or promoting the adoption of new financial products? And Daniel, maybe you could comment about how you're thinking about a personal agentic solution or solutions for the marketplace and the functionality and how to deploy that you're anticipating?

We are very excited about Mercado Pago's AI assistant, which is already addressing questions and concerns from our users. We have integrated a lot of functionality into our agent, allowing users to do nearly everything they can with Mercado Pago. For instance, you can ask it to show you all your invoices due in the next week, and then instruct it to pay them all. The functionality is quite impressive so far. Most interactions have been initiated by users, and the agent handles the majority of these without human intervention. While we have not yet begun to use the agent for cross-selling, it's something we plan to implement. During a conversation, for instance, the agent could inform consumers about credit offers or the benefits of a credit card. We see significant potential in this area, and the system will become more proactive. Additionally, it will start acting like a personal banker, helping users allocate their portfolios or make recommendations on suitable credit options. We believe there are major opportunities here. On the acquiring side of Mercado Pago, we also see potential in assisting merchants with presales and post-sales, integrating with platforms that can eventually use Mercado Pago credentials for payment processing. Overall, we are very enthusiastic about the opportunities presented by AI at Mercado Pago.

Just to complement Osvaldo here on the marketplace side, while we have many, many features that are powered by AI, starting with our search algorithm, our recommendation and so on, I think it's worth highlighting the fact that we have a seller assistant today running in our platform, basically 20% of our GMV is somehow advised by our assistant. It's actually proving to be pretty successful in helping sellers improve their live listing, reduce their lead times to get better reputation in our platform, capture some of their questions and requirements in terms of customer support. So very positive on the progress in that regard as well.

The next question is from Marcelo Santos with JPMorgan.

I wanted to discuss advertising. You had some good growth, accelerating penetration. Could you discuss what are the main products that are driving these or regions or if there is any particular driver behind the acceleration?

Marcelo, Ariel here. So yes, to your point, we are very pleased with the performance we had in ads this quarter. Revenue accelerated to 67% on an FX-neutral basis with higher adoption and spend basically driven by improvements in our tech stack. It's broad-based. So there's no one silver bullet driving that growth. But basically, we are attaching our product in the different parts of the value chain, right, auction bidding, placement optimization, demand generating initiatives and all that powered by an improved and easy-to-use platform in terms of front end for our customers. So extremely, extremely satisfied with that. Just to give you some color on a few of the initiatives. Our budget orchestrator allowed sellers to reallocate and use budgets across campaigns that were capping the use of dollars previously and that happened, of course, within the same advertiser, and that was positive. We also scaled a budget boost for seasonal campaigns with recommendations powered by predictive signals in order to make sure that advertisers have the right budget in place in order to deal with all the demand that was coming during peak season. We have performance-driven recommendations based on insights that our technology is capturing. We have AI agents supporting our advisers and engaging directly with sellers in order to accelerate the penetration of ads for mid- and long-tail sellers. So many, many tools being deployed and scaled, many of which are using AI. But I would say, in all, great progress from the team, but still lots of things to do. So penetration of ads with revenues as a percentage of GMV is still small compared to its potential. So very happy with the results so far, but even more encouraged with the potential looking ahead.

Next question is from Rodrigo Gastim with Itau BBA.

I would like to focus on the margin investments in Brazil. How do you view the balance between sustaining the strong growth in GMV above 30% and addressing margin pressure in 2026? Given the market share you've captured recently, do you believe we should start seeing increased operating leverage in Brazil going forward?

Rodrigo, it's Martin here. It's essential to contextualize our discussion about margins and the growth we are achieving. Most of the margin pressure results from our strategic choices to invest in areas that drive significant growth and enhance user experience. In Brazil specifically, we have been increasing our GMV and capturing market share due to these investments. Our revenue grew by 45% year-on-year. Additionally, our Net Promoter Score is at all-time highs, which reflects our ongoing investments. You highlighted areas like CBT, 1P, and advancements in shipping options. We are confident in these investments and our current margin levels because they contribute to our growth, market share increases, and enhancements in user engagement. As I’ve stated previously, our primary goal is to seize the substantial opportunities present in commerce, fintech, and advertising. We are committed to investing to capitalize on these prospects, even if it results in short-term margin pressures. Our focus isn't on optimizing immediate margins. We approach the business with a long-term perspective, believing that these investments lay the groundwork for future growth, and we remain optimistic about our long-term margin trajectory. Thus, we are assured in the investments we are making in credit card services and commerce, and we are already witnessing positive results. This is our strategy, and it is how we aim to create long-term value for our shareholders.

The next question is from Josh Beck with Raymond James.

I'm kind of curious where maybe the business plan shook out versus your expectation with respect to the lower shipping threshold. Certainly, it seems like there's been a very nice frequency lift. Is that pretty much what you had anticipated or modeled? And then related to the improvement in unit cost, I believe it was an 11% decline in unit costs in Brazil. Is that something that is sustainable as you build out this parallel slow delivery network? Or how should we think about the prospects there?

We are very pleased with the results of our lower free shipping threshold in Brazil. This is the third time we have lowered the threshold, and the current results are consistent with what we have experienced previously. Growth has accelerated along with purchase frequency, and we have achieved record conversion and retention rates among both new and existing buyers. We're attracting more new buyers, and our Net Promoter Score in Brazil is at its peak. The number of sellers and live listings per seller is increasing, and we are expanding our market share to record levels. Items sold growth has risen significantly, from 26% year-over-year in Q2 to 42% in Q3 and 45% in Q4. This is significant given MercadoLibre's size. Similarly, Gross Merchandise Volume has grown from 29% to 34% and now to 35%. This growth comes after 25 to 26 years of operation, especially following the pandemic which accelerated our growth. As noted in our shareholder letter, new buyers who joined MercadoLibre since we launched the new value proposition in June are purchasing more items across a wider range of categories and demonstrating higher retention rates compared to earlier cohorts. We're very encouraged by this impact and optimistic about the foundations we are establishing for the shift from offline to online commerce, which is ultimately our goal—to serve our customers better and offer the best value proposition. Regarding shipping costs, we are satisfied with our performance. Cost improvements are driven by multiple factors, including increased volume that dilutes costs and our ability to utilize idle capacity in our slow shipping network. We continue to focus on enhancing efficiency and sustainability through technology and productivity improvements. We see no reason for this positive trend not to continue, and we believe the team has done an excellent job, though we acknowledge there is still more work to be done.

The next question is from Geoffrey Elliott with Autonomous.

Can you discuss the changes that you announced to the shipping model in Brazil, I believe, on January 20 and getting a little bit more variable around different shipping rates for different types of shipments? And then high level, how do you see that impacting financials impacting margins?

So basically, we are trying to deleverage a bit the way we charge merchants and we think shipping costs do correlate a lot with measurements and weight. And for that reason, we decided to move to a different type of table in which we are able to charge merchants in a much more correlated way to the cost structure that we have based on actual dimensions and weight of the items. I think it's early to make comments on impacts on financials. As you know, we don't guide. So probably at the end of Q1 with our results at that time, we will be able to share more details and color on impact. But again, as always, we continue to evolve and sophisticate the way we manage the business and what we've done with the shipping tables is no different from that.

The next question is from Kaio Prato with UBS.

I have two quick questions on my side, please, on Mercado Pago. First, specifically in Brazil, we are seeing a really solid growth on your deposit franchise, basically doubling year-on-year looking at the Central Bank data. So can you please clarify if these deposits are now being used for funding to your credit business or not? If so, how much of that? I would like to understand how you see this usage going forward and what type of impact it may bring to your NIMAL as well. And quickly, the second is in terms of your NPL ratio, the early NPL ratio between 50 and 90 days, it increased a little bit. Can you walk us through the impact of that as actually the seasonality is usually positive in the 4Q and expectation going forward?

Kaio, let me begin by addressing the first question about deposits. Currently, we are not utilizing deposits for funding. We are not engaging in fractional banking; however, we are pleased with the growth in deposits. Since we introduced ports and higher interest rates on ports last year, we have seen a notable increase in our deposit rates. Users who utilize ports tend to have more funds with us and exhibit significantly higher engagement levels. This trend is evident across both Mercado Pago and MercadoLibre. These users are completing more transactions, using our credit products more frequently, and are more inclined to utilize our debit or credit cards. We consider this to be a major factor in increasing engagement and our Net Promoter Score, which we monitor closely. We are proud to have ended the year leading the Net Promoter Score among financial institutions in Brazil. Regarding the second part of your question about non-performing loans and the slight rise from the third to the fourth quarter, I want to point out that the non-performing loans on our credit card portfolio reached a record low of 4.4% in the fourth quarter. However, the increase in non-performing loans was primarily related to our consumer and merchant books. That said, I believe it's more crucial to focus on NIMALs, which have improved, indicating greater profitability compared to the previous quarter. Consequently, we expanded our credit offerings to more individuals with higher risk profiles while ensuring that we price this risk appropriately. This strategy resulted in a larger spread than in the prior quarter, and it can be seen as a calculated risk that proved successful.

The next question is from Neha Argawala with HSBC.

I'd like to follow up on the last question. We have certainly seen a pickup in loan yields quarter-on-quarter in the fourth quarter. And as you mentioned, you're taking more risk, which is resulting in the early delinquencies going up in the fourth quarter despite positive seasonality. Does this mean that maybe in the next quarter or two, we will start seeing an impact on 90-day NPLs and they will start going up again since you're taking more risk? Although I understand that your pricing for it, but is this a trend that we should continue to see going forward? And just to confirm, the increase in loan yields was just from taking higher risk in the new Mexico and not coming from an increase in the share of the portfolio in Argentina?

Neha, as you know, we don't guide, but we are very comfortable with the amount of risk we are taking. We have seen our model is improving. And what we have been doing is pricing risk accordingly and having good spreads. When we expect the loss, we booked that in advance. So we don't believe there will be any surprises there. And then I would say that we don't see an increase in yields coming. I'd say we are growing in all three countries in a very similar fashion. We were more cautious in the fourth quarter in Argentina because of the election. Because we saw some macro instability because of the election. So we were a little more cautious. Also, there was a spike in interest rates prior to the elections and then they came down and therefore, being interest rates higher, there was less demand for credit. But beyond that, we did not see any significant change in the other markets in terms of demand for credit or change in loan yields.

Maybe to add to that, it's Martin here. Our approach to credit has always been to expand our credit portfolios as long as they remain healthy. As Osvaldo pointed out, you're only seeing a portion of the situation regarding non-performing loans. However, we are proactively pricing those in advance. The margins in Argentina and Mexico are exceptionally high, significantly better than last quarter. When analyzing NIMAL, which considers both bad debt and provisions as well as the revenues generated from that portfolio, it shows an improvement quarter-on-quarter. We are very comfortable with the quality and health of our portfolio. This is why we are experiencing a 90% growth in our credit book, as we have confidence in our models and collection processes.

Your next question is from Donnie Tiger with XP.

I would like to explore a little bit the sales and marketing and provision of doubtful account dynamics. Firstly, regarding sales and marketing, we see an increase quarterly in terms of investments as a percentage of sales. But you also mentioned in the release some tactical investments being done because of seasonality. So it would be interesting for you to share with us some color around how we should think about this investment going forward, especially as we see a lower intensity coming from competition especially in Brazil in the beginning of the year. And also regarding the acceleration of consumer books that you mentioned in Brazil and Mexico and that being the key lever for this doubtful accounts not improving quarter-on-quarter. You also mentioned that you are benefiting from a higher cross-sell with your marketplace while as you mentioned, overall metrics remain healthy. Should we think that maybe this pressure is a consequence of you guys capturing this opportunity of kind of increasing the overlap between the two platforms? And since you have a strong momentum in commerce that is fueling the consumer book growth?

Martin, I believe the first part of your question relates to our sales and marketing efforts, which is in line with what we've been discussing over the last few quarters. This quarter, sequentially, we increased our marketing spending by 60 basis points, and for the year, it rose by 1.4 basis points. This increase primarily stems from our expansion into social channels. As we've noted before, our affiliate program is growing and yielding very positive results. For example, in Brazil, the number of affiliates nearly doubled in the fourth quarter compared to the third quarter, and year-on-year, we have six times as many affiliates promoting products on MercadoLibre. We see this as a very encouraging development and believe it will contribute to our growth moving forward, which is why we're investing in this channel. This largely accounts for the rise in our marketing investments, while other areas have remained stable. There may be some seasonal effects in the fourth quarter, but overall, this is driven by the affiliate program. To provide some context, over the past several years, our investment in sales and marketing has typically ranged between 11% and 12%. We are currently at the higher end of that range, consistent with our historical levels of investment.

I think the second part of the question was whether there has been an acceleration of credit driven by e-commerce momentum. To some extent, that might be true, but primarily we've focused on separating the answer into two key areas. First, regarding the yielding account, we've been heavily promoting it last year, which has been the main factor behind its growth. The super yielding account offers a higher return, and that has significantly contributed to the acceleration. I wouldn't attribute this solely to increased marketplace activity. On the credit card side, there are two main factors at play. We have improved how we integrate the credit card offer at checkout and have also introduced more installment options. Thus, the marketplace plays a substantial role in driving credit card usage growth. Additionally, we have continuously enhanced the quality of our credit models, allowing us to feel more confident about issuing more cards. Therefore, the increased accuracy of these credit models has been a key factor in issuing more cards, alongside the integration with the marketplace checkout.

Next question is from Craig Maurer with FT Partners.

I would like to ask a different aspect of the previous question. Over time, considering the investments made in provisions and expanding the credit book through credit cards and other loans, could you detail the impact on basket size or GMV spend for customers with a credit card or borrowing options compared to those without? Additionally, I'd like to know about the retention rates between these two customer groups.

Craig, look, we have not disclosed a specific number in terms of a lift. We see neither spend or retention, but definitely is, I'd say, significant. We measure several things. One of them is how much interaction they have with the marketplace, also Net Promoter Scores, there's a significant lift when someone start using our credit products, so they get a credit card and Net Promoter Score. And I would say, on top of those two things, we do see a higher engagement and higher net spend. Also, when we look at each of the main countries, I'm talking about Brazil, Mexico, and Argentina; and we look at what percentage of mix of all of the NMV is paid with Mercado Pago products, and those lines have been growing steadily in all three markets. So if you combine buy now, pay later, credit card, store balance, and so on, that is growing and is becoming a more significant part of NMV in each of the markets. And those transactions are great because typically, they have a significantly higher approval rate and a lower cost, and many times, we are double-dipping because we have some income also on the Mercado Pago side, or at least a lower cost. So I think there is really a big synergy going on between the marketplace and Mercado Pago there.

The next question is from Marvin Fong with BTIG.

I have a couple of quick questions about the credit card segment. You mentioned in your prepared remarks that you issued over 3 million in the fourth quarter, which is a significant increase from the 1.5 million you reported in the second quarter. It seems that Argentina wasn't the main factor behind this growth. Can you clarify whether the growth in Brazil and Mexico is considerably higher compared to the second quarter? Additionally, as the non-performing loan performance in credit cards continues to improve, is there an opportunity in the future to reduce the upfront provision and make it more margin attractive at an earlier stage?

Marvin, I will address the first question regarding the number of credit cards we issued in the fourth quarter. We issued nearly 3 million cards, compared to 1.5 million in the second quarter and 2 million in the third quarter. From the second quarter to the third quarter, most of the increase originated from Brazil, where enhancements in our models allowed us to identify more users who align with our payback criteria. Transitioning from the third quarter to the fourth quarter, there were two main factors. One was Argentina; we began issuing cards around the middle of the third quarter, and the pace significantly accelerated in the fourth quarter, resulting in about 100,000 cards issued as we ramped up in that market. The initial results are encouraging, showing that we are reaching lower-risk users compared to our standard consumer loan applicants. We are optimistic about Argentina's growth, and we are just at the beginning. Additionally, in Mexico, improved payback periods led us to increase the rate of card issuance, and we feel confident about the tempo we are maintaining. In summary, we saw acceleration in Brazil in the third quarter and continued growth in Mexico and Argentina in the fourth quarter, and now we are fully engaged with all three countries.

And in terms of the profitability of a product, if you look at Brazil, which is the oldest cohort we have been issued credit cards in Brazil since 2021, cohorts that are older than two years are already profitable at a NIMAL level. So that gives us a lot of encouragement to continue expanding the user base. But obviously, as we incorporate a large number of new users, the average is still not profitable, but we are seeing light at the end of the tunnel, right? So it should be a profitable business, it should add to profitability when it comes to maturity. But still, we are at a stage where we are growing the user base. So on average, it's not profitable yet. So just to put in perspective, we have three books of credit. We have consumer credit, which is a relatively high-margin business in terms of NIMAL. If you look at NIMAL, it's in the 30s, in the high 40s merchant credits. The credit card at this point, it's not NIMAL positive on average, but half of the portfolio is already NIMAL average in Brazil. We are seeing positive trends also in Mexico and would be actually too early to tell.

The next question is from Jamie Friedman with Susquehanna International Group.

So I had a question about the acquiring TPV. In terms of the mix of on and off-platform acquiring TPV, how does that mix impact, say, that the consolidated take rate of acquiring? And if it does, is the interchange component of that now facing the regulatory caps that I think are underway in Mexico?

Jamie, let me explain our approach to acquiring. We have three segments, which include both on-platform and off-platform. For on-platform activities, we are directly measuring marketplace economics, so that doesn’t show up on the acquiring side. However, we do track acquiring activities online and offline, including POS systems and merchant services for various merchants. Typically, online transactions carry a higher risk and complexity, resulting in a higher take rate compared to POS transactions, which usually have little to no risk. Consequently, online transactions yield higher margins. That said, offline transactions are growing significantly, and we see a lot of potential there due to our lower market share in that segment. Regarding the interchange cap in Mexico, it has been postponed by the regulator, meaning there will be no immediate changes to interchange rates in Mexico.

The next question is from Joao Soares with Citigroup.

I appreciate the broader strategic upside you've outlined on agentic commerce. And I fully agree with the merits of driving online retail penetration in digital advertising. What I want to hear is your thoughts on the risk component. So essentially, how these independent agentic systems could introduce new forms of disintermediation and engage clients directly, right, leading to potential changes in monetization. The most obvious one we can think of and discuss a lot is the dollar flow of advertising. So I really want to hear how you view these risks and how you're approaching them strategically.

Thank you, Joao. Let me clarify my earlier points as I address your concerns. There are knowns and unknowns. We can't predict what hardware people will prefer in ten years or which models will dominate. However, we do know that consumers prioritize a seamless end-to-end experience. This encompasses not just product searches, but also quick delivery, a wide selection, competitive pricing, attractive financing options, and strong post-purchase support. Furthermore, there is technology available today that can greatly enhance the product discovery process. For this reason, we are dedicating significant resources and engineers to create our own agents and shopping assistant at MercadoLibre. While it's too soon to gauge the impact of other shopping assistants, I understand your concerns regarding potential risks. Nevertheless, we believe we are approaching this confidently, given our strong relationships with consumers and our brand's popularity in Latin America. We possess valuable data on past purchases that will enable us to provide an excellent shopping assistant. We're focusing on what we can control, which is building the best possible assistant, and only time will reveal the outcome. I believe MercadoLibre is in a strong position to leverage this technological shift, which I previously mentioned will likely accelerate the transition from offline to online retail. This is particularly significant for a region like Latin America, where we are about a decade behind the U.S., U.K., or Asia.

This concludes our question-and-answer session. I would like to turn the conference back over to Martin de los Santos for any closing remarks.

Thank you all for joining the call and for your questions. We are very excited with the results that we're seeing across our ecosystem. In 2025, we achieved record market share gains in commerce in Brazil and Mexico. In fintech, we also saw important market share gains in our acquiring business, and we continue to scale our credit portfolio, which is very profitable, as we discussed earlier. This resulted in Q4 revenues growing at 45% year-on-year, marking the 28th consecutive quarter of growth above 30%, which is another sign of effectiveness of the long-term investment and customer focus that we have within our ecosystem and the way we manage our ecosystem. In 2025, we reached a record NPS in commerce and fintech in Brazil, Mexico, and Argentina, which is a great achievement that should enable us to sustain future growth as we look into 2026. I look forward to coming to you again in May when we disclose Q1 results. In the meantime, the Investor Relations team is available for any further questions. Thank you again, and good evening.

The conference has now concluded thank you for attending today's presentation. You may now disconnect.