Joao Soares

João Soares sought MercadoLibre's perspective on the risks associated with independent agentic systems introducing new forms of disintermediation and direct client engagement, potentially leading to changes in monetization, particularly concerning the flow of advertising dollars.

Answer

President of Commerce Ariel Szarfsztejn acknowledged the uncertainties of future hardware and models but emphasized MercadoLibre's focus on providing the best end-to-end customer experience, including product discovery, fast delivery, wide selection, and support. He highlighted efforts in building MercadoLibre's own agentic shopping assistant, leveraging its brand, consumer relationships, and first-party data, expressing confidence in its position to capture this technology transformation and accelerate the shift from offline to online retail in Latin America.

João Soares followed up on the risks associated with agentic commerce, specifically how independent agentic systems could introduce new forms of disintermediation and impact the dollar flow of advertising, seeking MercadoLibre's strategic approach to these potential changes in monetization.

Answer

Ariel Szarfsztejn, President of Commerce, reiterated MercadoLibre's focus on providing the best end-to-end customer experience, encompassing product search, fast delivery, wide selection, pricing, financing, and post-purchase support. He emphasized their significant investment in building their own agents and shopping assistant within MercadoLibre, leveraging consumer relationships, brand, and data. He acknowledged potential risks from other shopping assistants but expressed confidence in MercadoLibre's strong position to capitalize on this technology transformation, which he believes will accelerate the migration from offline to online retail in Latin America.

João Soares asked about MercadoLibre's investment cycle versus operating leverage, specifically if the company is satisfied with current investment levels, if there are additional areas requiring resources, and expectations for continuous operating leverage across OpEx lines.

Answer

MercadoLibre CFO Martin de los Santos expressed satisfaction with investment results, particularly the impact of free shipping on marketplace growth, seller engagement, and shipping cost reduction. He highlighted ongoing investments in 1P, credit cards (including Argentina launch), and fulfillment capacity (up 41% YoY). He noted that 39% YoY revenue growth (27 consecutive quarters above 30%) helps dilute fixed costs, leading to strong dilution in G&A and product development, and reiterated a focus on long-term value creation and disciplined investment. Incoming CEO Ariel Szarfsztejn added that record conversion, retention, and NPS demonstrate the strong foundations being built to shift physical retail to e-commerce, funded by continuous efficiency gains.

João Soares inquired about Mercado Libre's satisfaction with current investment levels, potential additional areas for resource allocation, and expectations for continuous operating leverage across OpEx lines, given the ongoing investment cycle and observed leverage in product development.

Answer

CFO Martin de los Santos expressed extreme satisfaction with investment results, particularly the full quarter impact of free shipping in Brazil, which boosted volume, sellers, and items listed while lowering shipping costs. He highlighted ongoing investments in 1P, credit cards (launching in Argentina), and fulfillment capacity (up 41% YoY). He noted strong dilution of G&A and product development costs due to 39% YoY revenue growth, affirming focus on long-term value and disciplined investment for growth. Incoming CEO Ariel Szarfsztejn reinforced the positive impact on buyer frequency, conversion, retention, NPS, listings, and sellers.

Joao Soares asked about the potential repercussions on commerce growth from the strategy to de-risk credit originations and also inquired about the opportunity and potential timing for launching a credit card in Argentina.

Answer

Osvaldo Giménez, EVP of Fintech, stated he does not expect any negative impact on marketplace growth, as 'Blue money'—payments from Mercado Pago's own funding sources—continues to grow as a share of GMV. He announced plans to begin issuing credit cards in Argentina in the second half of the year, expecting it to be a highly relevant product by leveraging learnings from Brazil and Mexico.

João Soares inquired about the CapEx guidance remaining at BRL 700 million despite a reduced number of new store openings (5 vs. 10), asking for a breakdown between BTS and maintenance CapEx. He also sought to understand the strategic rationale for slowing expansion, given the company's strong balance sheet and tax credit monetization capacity.

Answer

Aymar Giglio Jr. (CFO, Assaí Atacadista) and Belmiro Gomes (CEO, Assaí Atacadista) explained that the CapEx figure includes carryover from previous years, maintenance investments, and significant spending on new projects like drugstores and technology for picking operations. They noted that most new stores are BTS (built-to-suit) using third-party capital, and the reduced expansion pace is a strategic decision to prioritize leverage reduction amid high interest rates.

João Soares from Citi questioned the CapEx guidance of BRL 700 million for 2026, given a lower number of new store openings (5 vs. 10 previously). He asked for a breakdown of BTS (built-to-suit) vs. owned capital, maintenance CapEx, and the strategic rationale for the revised expansion pace despite a strong balance sheet.

Answer

CEO Belmiro Gomes explained that the CapEx remains at BRL 700 million due to carryover from the previous year, maintenance investments, and new projects like drugstores and technology. He noted that most new stores are BTS, meaning a reduction in store count doesn't proportionally reduce CapEx. The strategic revision considers high interest rates and the need to reduce leverage, leading to postponement of some projects and focus on high-performing regions like São Paulo.