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Back of Napkin

MercadoLibre, Inc. MELI

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MercadoLibre grew revenue 49.8% last quarter and its operating income fell 17.2%.

The gap is the credit book, which reached $12.0B while the allowance against it nearly doubled to $4.4B.

MELI · price with moving averages

Daily · 6MWeekly · 3Y
$1056$1467$1877$2288$2698 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

MercadoLibre is the Amazon and the PayPal of Latin America, and increasingly the bank. The marketplace connects buyers and sellers across Brazil, Mexico and Argentina. Mercado Pago processes the payments, originally for the marketplace and now everywhere. Mercado Envios ships the goods.

The newest and fastest-growing piece is lending: working capital to merchants, consumer instalment credit, and credit cards. That business is why the profit line and the revenue line have stopped moving together.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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