Argentina Profitability Decline
Q: Is Argentina's EBIT decline a new normal?
A: Management noted that due to tough macro conditions and devaluation, Argentina's EBIT contribution decreased from 60% to 19% year-over-year. Strong growth in Brazil and Mexico offset this decline. They consider the current EBIT levels more normalized and attribute the decrease to devaluation and reduced volumes.

Credit Strategy Amid High Rates
Q: Has the credit strategy changed with higher rates?
A: The company’s strategy remains unchanged despite expectations of prolonged higher interest rates in Brazil and Mexico. They continue to cautiously expand the credit book, focusing on underwriting capabilities and growing the credit card business, which is critical for their fintech strategy.

TPV Growth Acceleration in Brazil
Q: What drove TPV acceleration in Brazil?
A: Acceleration was mainly due to online payments by adding larger merchants and increasing wallet share, along with better performance and approval rates. Changes in the point-of-sale go-to-market strategy also contributed, leading to accelerated growth.

Melimize Program Efficiency
Q: Are Melimize efficiencies offsetting higher shipping costs?
A: Melimize adoption led to increased engagement and volume, slightly raising shipping costs by 20 basis points as a percentage of GMV. However, this is more than compensated by incremental volume. Management believes there's room to further optimize logistics and reduce costs.

Increase in Early Delinquencies
Q: Why did early delinquencies increase?
A: Early delinquencies rose due to shifting to riskier segments, with improved models allowing better risk forecasting and appropriate pricing. Additionally, holiday timing in late March affected collections temporarily.

Drop in Average Interest Rate
Q: Why did average interest rates on loans drop QoQ?
A: The sequential decline is due to seasonal factors, with Q4 typically having stronger collections. Accelerated growth in the credit card portfolio and originations also increased provisions upfront, impacting margins.

Ad Penetration Rate Increase
Q: Did ad penetration improve across regions?
A: Ad penetration increased from 1.6% to 1.9%, with revenues growing 64% in dollars year-over-year. This improvement was consistent across countries, notably in Mexico, driven by product enhancements and changes in algorithms and placements.

Fintech Strategy in Mexico
Q: What’s the fintech strategy in Mexico?
A: The company aims to be the largest fintech in Mexico, offering a full suite of products from acquiring to financial services. They introduced a rapidly growing credit card and offer remunerated accounts, seeing a significant opportunity as financial inclusion increases.

Accounting Change for Mercado Envios
Q: Why change accounting for Mercado Envios now?
A: They adjusted terms to reflect their own logistics operations, formalizing responsibility for execution already in place. This accounting adjustment better reflects business operations, with no operational changes or added risk.

Monetization of Logistics Services
Q: Will you start charging more for logistics services?
A: Management sees a long-term opportunity to increase monetization but remains focused on cost efficiencies and increasing seller adoption. They believe it's not the right time to change monetization strategy.

Argentina Growth Below Inflation
Q: Is slower growth in Argentina expected to continue?
A: The company experienced decreased growth due to recession and consumption slowdown, with nominal growth below inflation. They will manage the macro situation and believe in the resilience of their marketplace.

Loan Originations by Country
Q: How did loan originations perform by country?
A: Acceleration in originations came mostly from Brazil. In Argentina, growth occurred but at a significantly lower rate in dollar terms due to caution and devaluation. In Mexico, originations grew year-over-year but remained similar to the prior quarter.

Impact of Easter on Volume
Q: How did Easter affect volumes?
A: Easter resulted in reduced volume, with four consecutive holiday days impacting March numbers. They estimate a loss of 5 to 6 percentage points in that month, which may reverse in the following quarter.

Interoperability in Argentina
Q: What's needed for credit card interoperability in Argentina?
A: To interoperate for credit card transactions, which are a minor part of their volume, they need tokenization for security and agreement on commercial terms with banks. They're negotiating interchange fees and are technically ready but awaiting counterparts.