MercadoLibre (MELI) 23 Feb 232022 Q4 Earnings call transcript

Hello, everyone, and welcome to the MercadoLibre Earnings Conference Call for the Quarter-ended December 31, 2022. Thank you for joining us. I'm Richard Cathcart, Investor Relations Officer at MercadoLibre.

Today, we will share our quarterly highlights on video, after which we'll begin our live Q&A session with our Chief Financial Officer, Pedro Arnt; and President of our FinTech business, Osvaldo Gimenez.

Before we go on to discuss our results for the fourth quarter of 2022, I remind you that management may make and this presentation may contain forward-looking statements.

for the our screen, Investor earnings and Form to be will Relations refer XXXX. our in ended available materials XX-K please disclaimer which on also website So year the on our

With that, of a our results. begin let's with summary

KPIs I'm whole. strong the and while business key profitability navigated the happy reached Alongside inflation. to to technologies. in share been We're sustaining during particularly we've a and across MercadoLibre's rates messages successfully the operational and market products deliver share of despite year. combination the gains uncertainty high able and a quarter We've pleased throughout investment fourth XXXX and to records all of an year challenging around environment, level everyone. consumer of new about interest performance Hi, the and spending, as growth attractive a have

a With item a XXXX milestone record the ever, quite surpassed Revenues TPV, results mark quarter, for GMV, EBIT. first as time for in net well the end strong $XX fourth billion as the for example, and with ship we revenue for billion in of expansion. margin delivering XX% year-on-year. while new at perhaps our the And while is more still even unique margin revenues record level, surpassing EBIT EBIT at roughly company. combination also landmark came and growing $X expansion a

Latin strengthened During the America. in leadership XXXX, market its MercadoLibre e-commerce of

region with prop investment extended aspects grounded Mexico all data we are also and commerce gains and that the achieved Brazil of indicates our time. value around our entire out. share of execution As consistent period share an These market standing our in gains and market across

continued of continues product at revenues, fast overall merchandize prices competitive Mercado a and also improved sellers all profitability key the expansion the our by business. ability of deliveries offer a from commerce our business sales on Our healthier scaling assortment margin XP the of ads year-on-year fourth be for The during a budgets, helped management differentiator and broad company. better of quarter with to very the substantially to of sizes promotional

for of basis focus Ads strong quarter, their Mercado while major EBIT in a example, another of XX monetization the technology XXXX, technology presence been ads improve better Development see ahead opportunities maintaining GMV, fourth our increasing Ads and as grew growth well. to points penetration, despite We continue of has of serve of still for attractive ads as margins. its advertisers. for we plenty us growth to during

while on fantastic XXXX for Mercado expectations a with take rate was our basis. Pago, a expansion year-over-year growth also delivering year exceeding TPV

all, business driven On business, strong Brazil, the of and acquiring first growth and in we our payments QR Chile. POS performance, and maintained Mexico our by margin

business, digital On in the the triple side accounts highlighting the payments grow and of choice digital our XXXX, other both to digits continued of account at Pago, TPV becoming in traction of cards the users.

well a These effective realities. controls were profits. the our about quarter remain going the fourth and growth risk We performed year and the as changing of contributing Credito tougher Throughout effects optimistic once again us forward. of Credito able in Mercado ecosystemic to in closely performance resulted the year, profit our whole, the positively despite conditions. we manage to to economic in as Mercado the well book record positive

to a product, wider Pago credit by leaves of on cards. value will been proposition of performance much performance card the credit Mercado on the the has a most But improved models, forward. for remain element encouraged key adjustments product. and XXXX year the seen a hand, other from we've the strategy which That the cohorts the of recent underwriting us improvements going with that

services offering, wider been broadening important offer. scope an year our complement of for products financial credit these terms the which of able has of Mercado All Pago XXXX to we're

a that stack us have base. to our to now principality is we our accelerate core within will which place efforts We enable achieve to user in that day-to-day think sufficient needs, meet product

of discipline cost strong All have leveraging these execution to top-notch and in team results continued dilution. deliver scale our been by from the made possible

of much a results to and also of these shareholder our have both financial more all Investor You detailed fourth operational Relations our letter published review are you available website. quarter and which presentation, in made on

updates the through hand to I'd With Richard some that, business go of and live like quarter before turning year. the and Thank to back you. to product to section, of it the latest Q&A

XXXX ecosystem mission have to in MercadoLibre. in Latin investments the technology continue at and of democratize to key America. to today, some was another impacts investments we for our financial commerce as important delivered share these year And we our want on services

full offer our and able a technology now to users products of months stack services of day-to-day XX Pago millions intense after financial of We're Mercado deployment. to

data to our We to and services users. are new leveraging products our in order cross-sell

payments Users to building profiles objectives buckets of offer different more step Mercado Pago along also their day-to-day debit useful our a minimum This BRL an our transfers, digital with is online towards investment X dedicated principality. QR access and choose with code and Mercado cards, they risk important an and needs. account have and specific achieving from are in to making users' saving of in for Pago Brazil. credit just able to

from in fixed Pago a the app. users Mercado can simple also deposit includes three quick recently, institution funds. investment investments and financial simple Brazil rate now certificates have actions and banking in more to with process our Users by This make a

our that insurance their in against different with users' many offers offers to life, needs of our also personal suit lives. transactions face online daily Pago accident may and protection Mercado This customers options uncertainties insurance.

financial region. Pago to foster in to well a services provider enabling product region, the is us positioned Mercado the become stack, inclusion with a financial across Now complete leading

by a the Our mark items commerce XXXX. platform in we've currently sold surpassed serves X.X million sellers world-class of offering billion experience

retail e-commerce deployed categories low. spend to investing of online, more where is in drive to our decor, particularly improve the and Auto fashion users and shopping several in XXXX, this We Parts. to beauty continue believe improvements categories we We including online in will home are as technology experience penetration

surge simplified filters home to experience lab decor our parts the developed For discovery a we navigation in and the order category, further specialist and example, in experience. category, more whilst we've the have in auto create

New as advertising to in features the videos out in different by formats. improvements of all sellers views. which our to to improve our logistics products products percentage penetration net fulfillment flat pages. means their of even our And sellers delivery in times the geographies. GMV fastest promote with to Short We're enabled fulfillment the have of of presence millions MercadoLibre our a also their a And the recorded we monthly deliveries, of reached increased improvements deliver continues have in in have in of that fuel to productivity centers, product remained year-on-year. have shipping significant of in network. XXXX, promote efficiency investing overall key were technology broadly higher our cost able

MELI to service. the Our over NPS through of returns a than over done These network Places have the other grew returns higher with actions, already X,XXX places. local postal locations as half such

buyers same, NPS the Places choose homes. the to MELI up deliveries the the from For their items buyer's to made is network, the that pick

the times well with We MELI also lead lead optimizing as times as one day improvements costs. in in reducing Air delivered over operations

we XXXX yet is that are the as us, with and as stronger great best We confident ended opportunities ecosystem a ever to come. ahead and of

from from question Andrew Stanley. And [Operator comes Instructions] first Ruben our Morgan

Your now line is open.

Hi, for and the detail. thanks very question much

of fast-changing You environment, in elaborate what release what as specifically operating a in curious a and about and if not? competitive the made could Brazil. type that in comment in run competitive I'm business, you your landscape you changes

Andrew. Hi,

general, very over think defined market dynamic the barrier situations the extremely has speed to in, of in one to when change the high and characteristics think same having and consumer we and how technology specifically last we that's refer commerce markets course, entry, which And competitive both at is. long-term are structures. low years what And dynamic the XX about time, a this adapt speed our strategy. to we and focused been I So talk consistently clearly while FinTech operate area generate areas I of

And long-term technology is we remained consistent The our very over what we on to merchants, try tactically, of And the time. we're areas quality very building has Our consumers, our adapt incredibly our our and for that vision consistent. speed of focus products market technological changing and changing to we to because we've into dynamics we've adaptation that habits. think served well that dynamics, we consumer of built operate. quickly and and shareholders consumers how culture our our

the business, you're if over just a et thoughts Thank up thinking about I terms Great. how you. area time. the cetera? was know business. about you've feeling slowed greater about down talked updated how an about Thank of you. XP it but you're the year, a past bit I And quickly, in that that in opportunity Any follow could economics,

capabilities, first technology of has business we've XP how coming of and the So out operate in we that promoting. see capabilities been to run we've in and of and better continued in-house those pricing, PPMs improvements, the improved consequence And buying economics a that and improvements to foremost, terms built business.

our point well look for are capabilities like forward those reaccelerate that sometime business allow going combination also to that where closer closer and bodes few of business to the that So of over the in expectations again and XP quarters. we the next terms P&Ls we the and feel us what

you. helpful. Thank Very

question comes And from for moment one And Sachs. Irma our Sgarz you. Thank question. Goldman our from next next

open. now is line Your

impact think how opportunity. CapEx side you level? CapEx for the at to you forward, equipment, was bit cetera, the And lower to logistics had your there. the the just the what than and quite automation imagined But deploy the of those of going centers have maybe came fulfillment The network you next a technology no year. to we fulfillment I path the negative on a et as for year overall maybe thanks -- specifically outset a lower would for take little within just bit Yeah, still bit results in just actually trying obviously, the to the characterize

in the different room function about seeing And then and offering you're shifting for how space? how in crowded is about And thinking business from pricing what develop? as been Can point as sort talk Brazil And a share that more shifting see competitors you MPOS -- how been to that, to adjustments? to you've that you've release, how driving the your bit how you upmarket. in churn payments of you you -- gains little expect the you're of

Irma. Sorry,

take CapEx So let me first. one the

'XX both the them, available fourth look cash and in year flow, at we cash and the that of generation also you in think year aspects. the we one cash offer from If both in full Cash change XXXX, an around operational cash generation. profile delivered in PowerPoint some of was but stellar disclosures I was a quarter the many free

in utilization -- peak that Part in centers of generation logistics some we are cash operating to and and of because logistics our centers. CapEx of our was fulfillment geographies close terms sortation

'XX as So incremental on in 'XX primarily CapEx anticipate of in logistics some we build are incremental investments some we capacity we when at that needing primarily Mexico. in do terms we markets, the versus front look

development, of seeing developers. of the big pace and net of CapEx capitalized new is other forward in bit slowdown is developers which item, a In of the what going think terms you're product a I adds

still past that most over few going adding we're continue than we the more we measured somewhat think a hire, I probably to had in but others been pace years. at against engineers

higher generate now. a in future than a years. see terms of we of R&D the right did So at as in But in capitalized cadence also, when least, that way, into 'XX net-net, should it we 'XX look will come CapEx, lower

better excited than the regions, were a rather to the are because that up And are the Brazil our grow regards to we recognized market robust our selling some believe it's connectivity, and have year something been more been in and better had the When and TPV. we than per POS by look been not out move out It's we our able of rates very ago, better because we at is driven products increase more payment whole devices lot about. Brazil, regarding this we in the how and past, deploying have approval that but in have larger we that NPS we rolling pulling With a of device. has are significantly question able TPV all in users. and to we by

are we significant a device. increase this for seeing so And [Indiscernible] in what is

a but in deploying we own, than we is the force a the And nonetheless, enable third-party Most scale segment. are sales in not it also, they is the did past. force SMB larger us sales of to our

you. Thank

from question. moment you. from JPMorgan. Thank question Marcelo And Santos our comes next one our for next And

open. Your is line now

question. my taking for Thanks the Hope evening. you provisioning good can the question business. Hi, The about is on hear credit me.

in presentation, So mean you down provisioning reduce credit the that Does mentioned that of this past you think -- didn't showed because of improved the in you you went like you previous quality. provision because partially amount the change? quarter, I better Did quality cohort. provision to a per terms think of you. I the you the range Thank that how for payments? late change it or in that much

Marcelo. Hi,

describe few has quarters. over I detail me last what let more in think happened the

to our for each countries has As the you quarter we're of decided the each higher we conditions saw the second restrictive the lower of risk we been second and exposure segment. of lower higher-risk end recall, and during in That market case the and segments. to to and third more the quarter, as be the fourth businesses our the towards We to were exposure that worsening. quarter,

As that drove that risky, is. reduction accurately are our down reduction we But are NPLs a had what NPLs less estimate provisions best a the in risk consequence new in of nonetheless, and Nonetheless, reflect originating they lower have of provisions. that, slowed proportionally. as the we loans

with comfortable the the in we improvement provisions just have. It's are we taking. we risk of an reflecting are So level

next Thank for And question. Bank from our you. Robert our one Ford question America. of next comes from moment And

open. Your now line is

advantage Hey, having question. Osvaldo, to Congratulations categories? Pedro, that suppliers on relative market dislocation taking And quarter. the about any support disruption key is Thank Pedro, And thinking the impact near-term are my share from you you thanks our much. on how opportunities? very promotional the Richard. in for and competitive

thanks. Bob, Hey,

So answer to question Andrew's of in way, it's a a continuation beginning. the the at

what but driven on doing what Our strategy focused not has doing more much we're doing, never been by our competitors consumers. are and or

On gain to those of those by strategy, become those that shares a market if into competitors. changing there and gains share we tactical advantage. available, then try can that lean share are potentially of without will are opportunities or And see how level, I potentially lost take some we being in think our some

strategy market how that. of forward again, might in much plans a potentially nothing have But the business perspective advantage And I think more develop, seeing some do to negative. some consequence that might or as not the from changes are ways short-term we happen we being positive, can tactical what importantly, to trying from a So disrupted take in going with we're ways we lines see of

terms incremental That more platform the on in of of any makes And in business, timing Ad demand improvements? a as the you and as can provide functionality ad sense. little color bit terms side well the server of expected the

Yeah.

think we've business. very the probably last accelerated product and about there year. about a focus tech quarters, the we've ad on investments -- headcount technology our been two the how over new or talking I So and We've engineering half consistent doubled probably deployment and three

when results and we coming in, think, improvements and hard predict and lag is been lag, launches I take. technology to long might also, see it's the We us actually for a that how that in there consistent between product have the very saying the

of year. And we'll plays need see how so out most to that this throughout

significant We've business continued to into of product enhancements QX the beginning in in push and 'XX. the advertising

next and so remain returns the we report those something few to reap stack over about And being the able optimistic eventually in be of we'll to improved able investments hopefully, ad the quarters.

penetration percentage the to We of structure continues revenues from GMV, when look of see the most a margin be streams continue we revenue advertising constant that gains one and attractive there. to as at

year as are all posted flow we go and keep focused let's begin and into the to guess how this, on I in. results the very we So forward you

much. very you Thank to. forward look we'll Yeah,

moment from Macruz next one Thank question our Thiago comes Itau. question. our And next And from you. for

Your line open. is now

Hi, guys.

questions on congratulations from the First, quarter. Two us.

if key First, I to principality, the the that want avenue there's lower or is and is dependent regarding here. think to Mercado cost a just if users understand And Credito reaching another e-wallet, achieving business, that further of that I funding end? entirely on

the the just seller rather guys showcasing Thank of a growth that follow-up are Those standpoint? question for not from by it Is what the offering on and restriction a marginal business questions. two technology the minutes a ads my further fair of demand economics to generating you. few is eventually the you And say ago. are

we throughout Tiago. we started relevant -- we the users used we Hi, the funding to fourth because through impact early in cost so getting had be still think CDBs -- with of the grow launched overall have the I offer has I the funding parties. we third to third future. of Pago, yet and this, and since days CDBs are our have in in are don't it have say the we since promoting Mercado I to could is relevant would parties the this then But one more growth we in think past, do quarter. paying until similar this the But CDB. Still, expand I more are at from we, cost done as of we the we -- far, it's to

Thank you.

Sorry, the second a previous question. part was There to one second.

ads piece, is benefit. if to think It a the the technology the to being scale understood is an that out able to reach. we long-term correctly, it do like reach have not On a that Tiago, we I and additional of advertising necessity question core business just nice or the size have would

see real delivers their made DSP platform. in advertising to platform reporting self-service and and in advertisers able the of react of that advertising near for to self-service So display be quickly. the in a ad for inventory results positions for improvements time improvements the the incremental server ad we've improvements throughout to that The technology terms displays. -- in launch The

all of of to simply we of platforms important, before audiences us few technology in so And within the weren't with the quarters, and over some the most probably technology focus put equal ability the target terms begins to the last -- on footing better equally successful largest there.

a the get So now of the kind different of would encouraged by see this right. to it's I we these there's very out really necessity deliver technology have the say, pieces results all there. hopefully, stack that it and We're launched adoption that of is, fact we'll over this And the

guys. Thanks, Fantastic.

moment Thank question for our next one from comes you. question. Elliott Geoffrey from next And Autonomous. And our

is now open. line Your

The Chile, release taking a board. like increase we Brazil, Hello, give that more question. the on charging penetration of across kind thanks update stand very Mexico, Can sequential a you where much for talks on about in in looks on the detail Thank bit fulfillment you. fulfillment? us for and

still terms terms of the and space. we of quarters quickly few we've in time, monetization in yet and introducing opposing we of space, Mexico-like direction that and over usage outside a way, same are at objectives to Mexico-like What Mexico the in saying two both levers. that we last rental of generates model, inventory behind those adoption charge levers been of for push inefficiencies doesn't charge And is have rotate of for So fulfillment enough dual levels that floor service the the are primarily levels. in

introduced we've so pricing kept And relatively we've low. but full model, the

If you results, Envios in operation fourth in monetization logistics Mercado actually look overall higher. quarter the the at the was

cost still XX-plus reflect in offering. that being in fulfillment, Brazil, adoption. done dialing the bearing behind still Chile, been to better mind gradually gradual that Again, part it's logistics monetization and so have primarily around growth Colombia need of are terms repeating to points we to significant pace. But offset penetration services of very cost side Mexico percentage we're drive we in increases at in Argentina part myself, in in a So still also and up services, the

But a over monetization, of least. be process. and step years. be will wouldn't anytime the in at significant a steady next any expect and gradual consistent it gradual process the will It very I So in functions many not near future terms

Great. Thank you.

from International our Friedman our question. Thank Group. from Jamie Susquehanna moment for question one you. comes And next And next

open. now is line Your

Hi, thank you question. for taking my

I ask and first number so it for the would just be like That's How we between even off? one obviously, journey TPV was two would the the What great. the off on off the in What questions, mean, acceptance Pedro So platform? about platform. Osvaldo, take off-platform thinking get journey or upfront. especially -- on, to it more should ubiquitous

the Previously and are credit. improved more company? the And two messaging you. my terms what to Is strategy was the more current then more Those is that still if in I sheet? comfortable taking the the balance for on great questions. was would you and of goal quality that today, of Thank syndicate be of some approach? Credito, Or profitability credit thought

Jamie. Hi,

start me with regarding the first Let TPV. one

on we -- TPV we we're already that has we now platform merchandise gross volume are think already basically at in XXX% really long happy at how I the for platform evolving. been with tracks the a time. TPV-off XXX% have been do marketplace,

that Argentina several years the e-commerce is which with the growth also there. growth. regards the Brazil nicely, And is TPV marketplace wallet, So growing I for avenues related that seen been most has we volume, over Mexico are think to last POS very have growing off-platform, tracks there strongly. and X the is growth the few in to and is more which Probably

payment, in online basically store. e-commerce than And already relatively all retail. is but at a share online of payments or total small larger pace Latin we a There's in lower that America, online in-store, have fraction have because because then is a we payments growing in also

-- is not I one second The sure right. I'm got it

for would great you Mercado funding as If Credito. repeat, that can regarding the be

improving. trying totes, own first understanding, was through it's credit may goes now when fatigues push credit then XX-XX was deteriorating, out. of I'm XXX, through of So My to the my origination like for this on you the but syndication a the you XXX -- up. the dollar were more mess gets urea next looks it's syndicated I understanding sorry, and

trying Credito. So of balance would sheet figure to you more I'm just out,

So unchanged. no, remains the strategy

far. gigs of has come a tranche, that retaining the been that of [ph], the us very We which through so our continue, off to while incremental amount should size still sheet can profitable potential subordinate the credit for so growth given books balance the we increase

CDBs The forward that additional mentioned a potentially more the becoming funding relevant source in is Osvaldo are that going question. previous

around CDBs we that we as piece will with structure growing banking is think the in for ourselves to And taking our business, of equity window relationship then warehouses distribute so now the structure in when past that to through of capital can of credit relevant be been as The the gigs terms investments. piece. in the own advantage So third digital the there equity own our addition third should be the capital wallets had very the in we partnerships doing the the credit or business.

in emulate the a to a have from at funding The same initial from like, perspective, savings CDB product it's allowing savings potentially start time at not CDBs regulatory a a way, perspective, looks But own although higher business account our to what that's essentially a users a us. for is cost. that but source

Perfect. Thank you, both.

Fong Thank And from comes Marvin next from for our one next our BTIG. moment question And question. you.

is now line open. Your

Two from for questions. quarter. Thanks evening. good questions And Hi, my on taking me. also congratulations the

So on Credito. first one

Just underwriting. at a become high you've more with your and strong, very level, obviously, profitability is conservative gotten the

how of about more -- the thinking book extension and the Just to bit aggressively? curious a returning on growing growing little you're credit

little more aggressively? position for such is more you can believe get waiting Or other in Credito credit a start maybe that the to extend In strong a favorable? leveraging of macro a words, you do kind to environment are you little that strength that

for question, with then I groceries. that e-commerce saw the on Carrefour you second delivering partnered And side

definitive on grocery. expand a Thank bit your handling this you Should in more not little of could Just with a sign that as kind partnerships curious and a you're strategy basis? we decision a made if to that you take proceed you. on grocery XP interested and with

Marvin. Hi,

first more to we healthy start I'd the be as And better we we last with safe we're with better -- that to sure we ended on expected, cautious more collections spreads. had conditions What of with take. willing spread were And saw decided worsened, risk couple where market as credit, quarters, also, make say you to expensively as the our up me we the up one. we a the to over and mentioned from the very regards outlook price be happening Let we to on ended decided that than side. lines to

will when see market we then as we improving. aggressive. the when deem evolving. flexible conditions more we again, how be, see and we'll more aggressive, regarding market that allow And is will for dynamically that become case, Now are we probably the And probably

please you part lost I second question? Could repeat the the of think you. I

-- you believe distribution you're partnership that if into right on could guys was and expand had of you I Brazil. kind Carrefour about on entered with in I wondering just a grocery how thinking your grocery now?

Great.

have our we be they a meaning XP partnership will with that on Carrefour, So a merchant platform.

with in one can that ones. challenging the is most of end-to-end a to supermarket category And where of the which always groceries we -- necessary through terms they offering, will head as and very bring will able model partner user centers, be assortment think and is Ideally, and experience, and the we fulfillment experiment the we fulfilled welcome their purchasing I one part key CPG supermarket inventory greatest be for sent entire us. over they the best of a perspective, one the which the always consumer our by MELI have control that process. is where from are to deliver to logistics

it's within think huge within repeat the behavior a from and P&L economics from perspective. continuous everyone, a It one has to experimentation context challenging Again, within a an improving terms think flip challenging loyalty purchase for still subcategory, in we've users. of I category supermarket. perspective. So potential But our that on of it's of see I continued the side, economic

try going innovation make most it lot and experimentation to to figure our and that. what do a most region, is would sense with as of the there's model so And on which partners there we for appropriate the out

Great. Thanks guys. so much,

our moment Joao And next Thank Citi. comes from question. for And our question one next you. from Soares

Your line is now open.

Thank you.

quarter. Just presentation a a mean this I was my margins was get overall. hoping on fourth on side. very Pedro just very look XXXX one to clearly quick I at

as and a go a the parts time, but more XP into a even you business, so better advancing very past, has of about lot which I it we're at there clearly that a of to robust in same business on margins bit And our the was are detract. though moving economics. the ad -- reaccelerating talking fairly mean a has the XXXX, business a It's also

your So just about XXXX? think just I how we should for Thank overall margins was get to hoping you. view

Sure.

it's but know, you as valid guide, think a we So question. don't still I

bit consistent model dollars, central very consistent depends in margin directionally, mix happens financial what different modest ideally but do remain of for units year-on-year-on-year consistent going shift, annual little So also deliver the business a That we we increase the in expansion. businesses to that to the saying manage manage forward. in we different margin try EBIT but and terms to try expansion on sub

committed continue that time, as growth to. to future bets And that that wants your different we company see Yet we are same at position. businesses and on today the have of many still continue negative deliver gains, to market engines are, a see many EBIT you its leadership to share in in lot a continue ourselves consolidating as question, cases, mentioned we

one ideally sequential as in in of the I to it's can extrapolate assume leverage increase dollars, the kind but necessarily don't So always, you next deliver that think EBIT we year. margin consistent expansion, year, linearly

P&L to through begin if bets very, look have have lose money do capacity if and out more more the business in scale profitable that businesses. today deliver this scaled in I towards are hands, out and skewed increasingly healthy become more those do we consistency, very to we and that early our three our years, these when then don't many on and five think margin generation a operational of attractive consolidated we and bets that positive between portfolio mix EBIT get those efficiencies primarily

That's you. clear. Thank

And Thank you. one UBS. And next from our moment our question. Prato comes from Kaio for question next

Your line open. is now

in and all [Indiscernible] sort on know us Thank business update have specifically across driving you share expectations exact what -- FinTech asking could profitability was well, the this everyone. I flat? if were morning, this? please you If not close Good as merchant the forward your of about your payments not in taking numbers, one And you provide figure? you question moving the the that but think you going finally, could if is us some question. I how segment is is today for but with for business. the don't

Sure.

So and these not basis, on a again, segments. reporting are consolidated

you we've Mercado this lot there we spend disclosed on FinTech, losses. expenses there done the to the distribution businesses to existing our I that of So give acquisition. users. are or low think A margins is the directional low operational consolidated discussed interest that is And relatively credit given basis. in after Pago understanding within The either of portion MercadoLibre are a

the So business. very credit is profitable business a

is expanding The profitable also merchant of points very online which the margin a acquisition basis directionally XXX is still fairly TPV. with business business payments business and attractive

at then the which The also business when we but is to online build terms positive MPOS business, than look we're services consumer slightly and strong of payments, overall business a is margins still profitable of financial in franchise, And acquisition the business. a contributor EBIT. a trying merchant lower with

savings significant products, the not some EBIT So the consistent bets on text that those last that cards, but the for the very very consumer credit few the shown digital are of continue to the areas years. yet, digital over do positive future economics and have core the wallet, be have improvements banks,

margin annualized top overlay pace and is That business. small still which the terms tens that, And of then insurtech of very to already grow on on millions fairly is is of EBIT. final but to perspective volume, dollars attractive from deliver of the in continues of a

Thank you.

Thank for next Agarwala next question And from question. And moment our Neha one from our comes HSBC. you.

now Your line open. is

question. taking for thanks my Hi,

strong or market XXXX the in e-commerce also gains during markets. of e-commerce very share be aware showed the of headwinds be mindful should strong with any which First your question expect trends on Any should we we in markets? some that should of in in XXXX? business business, What directionally of the

the second book. And on question is my credit

mode? you to products? XXXX, about why for any the be in much. environment? there Are last the up which conservative you to you in are asset start all So going seeing quarter you so you a quarters. at least products are first improved in could the thinking of of this the propel still encourage Or are two in Thank new year? has or quality, you beginning stable Are or credit being And growth to second growth that conservative current in the almost picking originations book

So the one. first let take me

are in to terms by of in to in and at I monetization think that whatever seen present. on And to I information be referred logistics the rate shipping and commerce a and we continue honing everyone. execute we of take significant anticipate fourth quarter, lot happens I level, some those the macro driven we're that's for headwinds that improvements We've business that the don't on advertising think anything. the consistent earlier. that's revenues of should if accordingly incremental with that a levers available exception

drag can we've did the year. signaled reduced on see in take business, turning quarter versus anything, hit of point we a last if sales reaccelerate We some the of I've we and year cautiously XP rate terms from feel this And fourth that again. in XP that

trends And incremental be rates. well. aspire deliver terms we should share, maintain execute we strong pace continue continue GMV And if also us to to again, to that so as well gaining in -- as take of should on that

when be and happen. more exactly to aggressive. regards happening, when guide, have aggressive With We credit risk will that last decide with we to it's more portfolio. quarters, growth to regards the we we be we of results book, to market again seen wait the and again, difficult we before good yes, see taking the but improving don't foresee conditions have will will And we see that we to in until --

are pilot it because And we car synergy very, We're a new the a just product pilot has is in strong loans. in still now testing testing it very our terms It's with by of We very, it's interesting pro marketplace. small. products, that one believe Brazil.

entered was focused maybe the are The business, is, risk something businesses concerns that understandable one necessary. I of caution growth times would where highlight on growth existed are as here a credit when the one credit I we that many recall management like company thing where how and with would most deal we

we terms and that constantly risk And back look it's management in need think look the backdrop you 'XX how when very of has really originations it in in at strong very credit that very and manage team terms the that do think, our been on timing we kind seen, down capabilities, but you've grade ourselves the at And if managed reprove within tough a which and I risk to interesting slowed a negative. extremely higher-quality for segments they've of I gives of focused results I been how with macro. we

a through continue now been a we've the been from and forward. have to environment, both credit extremely of consumer And think managed and on successfully. perspective, perspective profitability focus that's and a in going I pandemic primarily that Brazil, those manage challenging we'd both very, way like to risk very

Thank for our Wolfe next you. our Deepak And Mathivanan moment from question. And one next question from comes Research.

line now open. is Your

do very taking improving How at MercadoLibre? this the headcount Thanks on efficiencies about for focused are how plans? level many in this the productivity year think about companies Pedro, then the U.S. you your additions company questions. at And for Great. we the should here year. in feel

all second developments? strategy on should recent shifts question, in so the XP on given And landscape business, the with your much. competitive think particularly any developments, Thanks the with Brazil currently side, about then we these all

Sure.

order. answer I'll in reverse So

what on happening does strategy competitors. based Our is not change with

say at as lean becomes But will tactics changes market changes one opportunities do strategy available if competitive I given market into structure that think arise and share bit. earlier, margin. we adapt in wouldn't may mentioned dynamics. And I specific our the we our

way teams, were lot we and is capacity overspent about advantage. If we anything, tech our key island That now hire. throughout the can and an within that first competitive don't MELI disciplined we've position of continue your in or increase world that on this said we've in think think we we one large. layoffs. a And continue the unique that over-hired where size see to as we to because a the we I point, internally where On in us I no puts had pandemic, by conversations will a engineering of in a

said it necessary what and terms that, having positions, the we But across was slow down engineering years, disciplined remain And rate again, there business the team. to past because over of we few think continue grow headcount I the but years. versus downsizing will over last of staff will the in hiring no few

driven. even the decelerate and talent. than much service probably more will are so input those then hires customer incremental and costs, more of speed And output engineering logistics variable are the But

grow. that growth in are the KPI organizations determining GMV reflect So really in the will to those the growth and transactions fast need there how

Thanks, Pedro.

you. Thank next question. from Ju our next comes Credit And for And moment Suisse. question Stephen our from one

Your line is now open.

so you Thank much.

any Is profile markets? conceptually, Thank markets are there And play? are talk for the the at there seller ahead impediments get of one you And to relative the kind to fulfillment products of charged Mexico? has different? comments the the level? or Mexico's to of your earlier. other the other Or levels So Pedro, you there for just other adoption factors building on made Can about Brazil why in you. it services and

different the the for of XX% for within ever terms the in the shipping fourth first we the Mexico So offer. service that mark quarter time mix crossed actually types

in of one our Mexico So of actually initiate XX% centers. shipments in fulfillment

think profiles I combination that so there's is Mexico far led has a ahead execution merchant other and to always the of dynamics, markets. of market be

can the I if mark. Brazil, hit round finally XX%

been growing is to and trend continue it also Colombia Argentina quarters, but over So slower XX%. at past over grow Chile a right X has and grow. continuing the in the pace, to direction.

continue geo levels don't think able geo. to pace grow there fulfillment impediments at service varies other least in getting I Mexico The at clearly to are grow to the to from which we are So to or markets significantly. to structural the

Promoter that, impediments fulfillment. pushing a higher control And of adoption greater delivery it outcome the faster reason its is on see Brazil, to that consider catch indication up structural way Chile that significantly continue after and because is that. any But the to of experience, don't further you we is If is Brazil no, Net times, to was launched think delivers Scores. the I desired over

you. Thank

for next moment from question question. John one from Jefferies. our comes Colantuoni our And you. next And Thank

Your line now is open.

Thanks my questions. Great. for taking

close can you geographies? the gap as for runway Certainly, the perspective clean on So to your to helped give key closer across get other us e-commerce pandemic periods, you the regions. comparison your adoption

if I'm curious adoption? to long runway a customer So adoption recent still and point for trends in trial

sticking with just engagement bit recent to acquired how you about and of cohorts? rates And then quarters customer compared behavior, secondly, Thanks. in cohorts little talk pre-pandemic a can repeat

that. to a in have market the a interesting continued It doesn't slowed been reopened to still the growth. I to you as to strive, has has most down at from significant seem return point market of America effect The Brazil, are it think market we a But top Obviously, on retail somewhere as of type look physical grow. Mexico shrink. share began Latin to to the physical expect to where So that. teens. always, had high which retail the if in gain mid- And to advanced or growth pandemic markets, do we be

purchasing, in proposition found consumption compelling a value online that of stayed have that from a days We gained also -- to early that the still we shift. So the it's think in their that consumer feel online. enough has retail. lot shift consumers we off-line of terms And pandemic accelerated think online

so throughout continue prospects And the about optimistic to the we be long-term of e-commerce region.

it average flattish much it certainly pandemic. last pre-pandemic. overall not cohorts with And In has over means throughout sorry, retention terms higher so, the went are usage year frequency which that or and they cohorts, than -- to frequency remains the line of where were been in

to So pre-pandemic retention per numbers. better to line the able relatively since much unit engagement with we haven't but maintain we been higher have able it usage been in and than user to grow continue pandemic,

Very much. helpful. Thanks very

Officer, now Financial back would to like I for to over the call MercadoLibre's Chief remarks. And turn you. closing Pedro, Thank

Great.

So thank you, everyone.

billion XXX, payments phenomenal billion processed with hit of EBIT. a was and concluded a $XXX strong $XX over quarter. we've fourth of $X we think of XXXX revenue a where over It over I billion year very

So congratulations on assured rest MercadoLibre work successful shareholders. of equally deliver XXXX able and already back shareholders our the be phenomenal to we're our to ideally behalf team and stakeholders, all to for work that and to at the an consumers our

is quarter forward Thank we into updating to look you on you, and over. the things first

today's for you Thank conference This concludes participating. call.

disconnect. now You may