Mercado Libre CFO Talks Investments & Tariffs

Bloomberg Audio Studios, Podcasts, Radio News.

Hey listen, we have been really lucky in checking in on the c suite this week, and a lot of it has to do because so many companies around certainly across the United States, but around the globe also reporting their results. Shares of Mercado Libre they are actually trading up about two point eight percent in today's session. They will lower in the pre market, but certainly the regular session investors coming in. This is after the e commerce

How are you?

Yes, we had a great quarter, really in terms of the results that we delivered revenue Glubay thirty four percent a year, the delivery operating income a record operating income of eight hundred and twenty five million dollars. I'm more important than that we continue to grow our news surveys both on our commerce and fintech platform. Our buyers on the commerce platform luble by twenty five percent year a year.

On fintech's rule Bay thirty percent.

Credit book double year and year GMB, which is the volume to accepted America liver grule by twenty nine percent in Brazil thirty two percent in Mexico. In both cases we continue to gain market share, so very good, you know, very strong operating metrics. And like you said, this particular quorder was a quarter of investments. We opened two new food filming centers to add to the more than thirty four film centers that we have throughout the region.

We also made a big change.

In terms of lowering the free shipping threshold in Brazil, which is a strategic move that we have been doing for many years and it's paying off very nicely. And also we got you to invest in a credit card, but very excited normally about the results. More important than that about the future and the opportunity that we had ahead of us, both in commerce as well as filtech.

You mentioned the threshold for free shipping in Brazil as one of the contributors. I think to you missing estimates for net off it as well as core earnings. I'm just wondering, as a CFO of a fast growing business, how do you think about profitability and how do you manage the short versus versus long term that's.

I mean, we talked about this, Nina, I remember talking to you a few quarters ago.

That's it.

We try to balance, right, We try to balance short term profitability with the growth opportunities that we have ahead of us.

So we want to make sure that we do not miss those opportunities.

When you look at commerce penetration of e commerce in Latin America, it's roughly mid teams fifteen percent compared to maybe twenty five percent, thirty or forty percent in China, hour in the US, So there's plenty of room to

So I think it's a it's a strategy that has paid.

Out to us, and the long term investors of Margalivera understand it, and we're already comfortable with the investments that we're doing.

You mentioned Brazil. It's of course an interesting market just in the current terror of debates that we're seeing with the Brazilian government so far holding out tow to Trump and basically not giving in on the Trump Terraff suggestions for Brazil. Just wondering and how far are you seeing that play out in terms of consumer confidence and consumer spending.

Yes, this is something that we are monitoring closely. Obviously, we do not export into the US, so there's no direct impact on our business, but it can have secondary effects on the economy, as you mentioned, we have not seen that so far. As I mentioned earlier, we are growing by twenty nine percent our GMB in Brazil as that the management which is amount of money investing of our users, investor mark delivery more than DOW in Brazil ear year. Our credit card book has grown by one

So we have not seen any you.

Know, any deterioration on macro, on consumption, but obviously it's something that we are monitoring closely.

Martine Gwendia Matt Miller here in the studio with the ladies. I was really blown away by the growth at Mercado Credito and I wonder if you're watching closely for signs of credit stress there, because I think you had like ninety percent growth.

That's correct, that's correct. Thank you for for a question.

Yeah, obviously, when we look at credit, we take it very seriously. We are very careful in the way we manage credit, but the way I used to run the great business before taking the position of CFO. So the first thing we look at is the health of our book. We saw that npls and we disclosed this number are the lowest record, lowest number since we've been disclosed in the metric. The NAYMA, which is a measure of profitability,

We're talking with Martin de los Santos. He is the CFO Mercado Libre joining us from Uruguay. We should also point out that this is the largest company we to point Latin America's most valuable company if you think about market caps, so really significant. We were talking about fintech, and you know, you were talking about kind of the health of that portfolio, but what can you tell us more Martine when it comes to the mix of customers that are in that portfolio.

I think what we're seeing is we're seeing all the different type of customers within the economics segments of the population.

So you will find people of all kinds of.

Social levels within our ecosystems that are like half of the people that we offer grade too. We offer credit for the first time they never had access to create. But also the other half are people that properly moving their fintech business to us because we offer it much better user experience than the traditional bands.

Martin one question in terms of earnings, I noted that you also pointed out the impact of the Argentine peso on your results. Of course, we've seen JAVMLA make various changes in Argentina in recent months, including making changes to the companies to the country's currency, which has resulted to in basically the spread between the official and inofficial rate

Yeah, I think that the HEADLFT of Argentia that we continue to see a big recovery. I mean unique virus in Argentina group by thirty percent your year, our GMB group by seventy five percent in local currency or thirty five percent in dollars, the items sold on the platform group.

By forty six percent, so very strong recovery.

As we see inflation coming down, consumption improving, and also as you mentioned, the FX market.

Be normalized also helps our business.

They opened the economy, so we are bringing more products from the US into Argentina as well.

So most you know, most of the business.

Are performed here extremely well in Argentina and we're very happy.

With the way things are going for our business.

There you mentioned, Martine, you ran credit before at Mayer Coutolibre. You ran also strategy into it and you were at Paine before that, so you know strategy up and down. I want to know about your strategy regarding ad revenue because it was also searched like up thirty eight percent. Is that a profit center for you, a future profit center or do you view that more as a tool to drive your core marketplace growth?

Yeah? Other times in business is roughly a one billion dollar business.

He's rowing at thirty eight percent, as you mentioned, and he's as a profit business for the company, but it has tremendous potential going forward.

If you look at the number of people interacting with our ecosystem.

Last year we had more than one hundred million people buying on Marcaire have sixty eight millium monthly active users of our fintech platform.

So in terms of a.

Number of eyeballs within Latin America, we are the third largest pan regional platform and that gives us a great opportunity to continue distributing advertising. We also can leverage all the one first part the information that we have on our users or to target marketing campaigns. So we see a big, very large opportunity. I think it's more future to the past and advertising business. We're just getting started, but as you mentioned, we have been growing very rapidly for the past several years.

There's plenty of growth going forward.

Martin just got about twenty seconds. We always liked to when we've got lucky enough to have someone like yourself a global CEO, how would you describe the global outlook? And just quickly.

Yeah, I think well, obviously we operate in Latin America and depending on the countries and countries have some tough micro situations and some others might be in a very conditioned we're talking about Argentina recovering. But at the end of the day, I think in our business in particular, the trend of people moving online is so much stronger than macroduct We have plenty of opportunities ahead of us.

Inclusion throughout the region. So we're very optimistic about at least on our.

Region, So glad we could get some time with you. Martin de la Santa Ceo, Mercado Libro, cfo, excuse me. Mercado Libre gave him a little bit of a promotion in Inina treatment.

Thank you.