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. "