MercadoLibre (MELI) 2 Aug 232023 Q2 Earnings call transcript

Hello everyone and welcome to The MercadoLibre Earnings Conference Call for the quarter ended June 30, 2023. Thank you for joining us. I am Richard Cathcart, Investor Relations Officer at Mercado Libre. Today, we will share our quarterly highlights on video, after which we will begin our live Q&A session with our Chief Financial Officer, Pedro Arnt; and Fintech President, Osvaldo Gimenez; and Commerce EVP, Ariel Szarfztejn.

Before we go on to discuss our results of the second quarter of 2023, I remind you that management may make, and this presentation may contain, forward-looking statements, so please refer to the disclaimer on screen, which will also be available in our earnings materials on our investor relations website.

podcasts quarterly Investor would and understand Relations resources, as our that to has our to questions such new asked our website videos, business. turning results, investors like we highlight new to Before help frequently better and is live

find We also to around and SEC making it the have earnings site, documents. navigation easier improved our

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

'XX across top-line sustain last share and of I'm strong Rapid you that QX potential as to pleased few and continues the margin growth over to with and once to business very, its everyone. units, expansion a momentum of Hello Libre strong quarter. again very was strengths were quarters. the Mercado continue broad-based financial model we geographies showing solid our the business scale. our

me financial with the begin Let highlights.

revenue high Our year-on-year, big operations with than operations and operational to this, in more and size, margin. our combined our a quarterly scale, record. income a from new led from step-up remains efficiency despite Income reaching growth doubled

will are is above vectors behind, a with cash for like us margin run, potential margin solid we testament the in it every the but there growth points to performance. and to upside combined short not quarter result long certainly we growth this, term In rates expansion our still of deliver. market the multiple quarterly inherent invest look can for This to believe

time. of Argentina an Mexico growth items QX, driven to commerce overtook and largest our the In of delivered Mercado previous GMV to and This quarter. KPIs business. successful mark the both acceleration the geography the for second Brazil our Mexico, growth mainly XX was to for compared first commerce surpassed Libre’s Turning Brazil first become time. by which the billion

proposition, strength. position strength value leadership As the been has from MercadoLibre’s our in to going region to bolster we continue

QX. growth pickup also commerce in a in of Other our Brazil, include Product and further the momentum, X.X% GMV, by with accelerating, engagement ahead high is that grew strong, remained of of business, top party business highlights Ads. a which our higher GMV revenue of new in with well reaching of On during penetration driven reaching Advertising equivalent first fulfillment which overall

TPV well. delivered TPV in results Brazil per as The up growth Mexico. continues successful remained move Pago’s deliver as and to Mercado our strong business larger higher acquiring device, market to SMBs both

also also these On the account the TPV management, improved, the our digital products more as and product indicated. and with newer offering KPIs gaining and stack traction complete scale we engagement consumers. are to businesses, front, smaller our Insurtech and asset improve product as and experience

credit, expand back to NIMAL continues in performance broadly of Mexico, the stable credit overall healthy delinquency. a the card on in Turning good and Brazil to spreads from

strong share again, pleased We our shareholders. MercadoLibre’s to are, once with results

to value on value yet develop We aggressively, creation. and our proposition, investing long-term will with discipline continue always focusing

we before in you, back more share go into news I Just reporting and the a will look to to Richard you. Thank detailed some you forward with quarter. business Q&A,

in Mexico. operations share detailed fintech Today view of we to want more our a

country, Latin in large Mexico opportunity. America, exciting a currently than Mercado growing financial population Pago, For is other such represents adoption a lower Brazil. an as It markets has that services of with

payments development one services. for been few fintech rolling in of of digital the as positioning quarters, Mexico, market stack and Over MercadoPago leaders have the financial the other last we out our the product in

and to focusing is serve users our strategy are on Our both within merchants, already that ecosystem. payers

our fintech trust users. brand, the better Mercado of this, we Libre’s relationships to commerce build business the build on on and knowledge from do user and we As the serve

any physical debit online important partner use our transfer within from The solution and To card, generates into interest other time rate account, feature account minutes, at can at money get in their dominant. free is users at benchmark money-in banks can or money with an Mexico money Mercado stored transfers economy cash our stores, where still Pago and payments. a the digital used the an in the open account in through free. for can be users

is Another service important characteristic used of every of the Mexicans Mexican millions remittances, market a month. by

offers an Felix Mercado encourage and with represents this through the Pago, renowned an Pago. players, established partnership account. For digitalization of with Mercado partnerships recently into a to digital third transfer two exciting opportunity cash, the startup, and directly with transfers Pago launched these

than This ecosystem, higher with credit marketplace of credit. with popular solutions perform synergies buy helping marketplace Mexico in on other later continue are consumer well penetration the having geographies. knowledge the highlights and to Our pay product our the our our now, of underwriting

money into to deposited last to credit also significantly fulfill and profitability with continues financial consumer needs. users increased consumer stable well, strong in loans, has day perform account day size the book XX and NPLs. to the We offer months with in The

credit cash. launched consumer it our This an key principality credit market Mexico of the product in the we as Pago piece and be small is scale, Mexico, the our proposition value to digitalization the of of still first to the it of Mexico but important a This at drives In long-term. card XXXX, offer. in product engagement, we development in expect for in is half complement

we digital followed for our that, in insurance Libre, Like product personal with low for solutions, cellphones, of for Mexico. Mercado and accidents product offering we bought by cover, penetration by a building items year geographies, other insurance in expanded extended life, on top another began core account stack this On complete have important needs. warranties consumers’

merchants the bringing country to Mexico, to serve has cross-border of the strategy adoption country. merchants been extended the and expanded in our like By and sides In first consumers we both the to also among market develop time. payers finance, we underbanked an QX, to product market development. for drive digital purchases In drive warranty more

and Mercado combined rates. competitive complete market payment offers the That fastest Pago discount why receivables these in solution merchants, payment the is to with settlement

to at focus on increased in XXXX, POS Mexico, also their During to TPV. merchants installments generate that have able higher aimed tools buyers. and Merchants payment to in online we offer our access smart larger our payments are

merchants to can opportunities we Pago to top of access our and businesses. Pago, the firmly at to of robust Mexican early for our their first presents Mercado but is is develop and stage their these continue individuals for time On an lines potential through With proposition a the and ever, needs. to still Libre. product we many of offer, to services a Mercado Mercado Mexico market in grow credit and merchants development, products, believe work tailor will that sizable value

to yet As always, the best is come.

Thank you.

first line of the conduct from session. Goldman with the Sgarz Sachs. of Instructions] proceed Our question now question. comes [Operator question-and-answer your will Irma We Please

cards as free the your year. just intend are certain out lower headroom at by In for and top the previously to the of below for immediate Can But a priorities short remarks, items curious lean noted are use into us lay some the created that I'm a where to you here. of near-term? state in those items And of operating the leverage shipping which regarding priority you threshold. half the areas this business imagine areas or XP you are would that value second you've credit I in you

an cross-border for applied to cross-border margin discussion markets. same Mexican you or the operation so Is in to this that if Brazil? Mexico, market? light accretive in operation other related model and more of compared have overall And can somewhat Specifically be is ongoing sizable the the this in a

been Board growth. invest across in We've last our us the for few So extremely pleased gains to share the delivering market over to see continue users quarters. behind we've we general, and multiple with the opportunities been

us And business. overall act so size expansion of the between to we it's margin long-term scale and balancing important that continue carry that for out and short-term

quarters we're I'm to is, areas very on in where growth we there the really answer, and and but even accelerate skirting opportunity So multiple into vectors growth lean we feel where have strong to are choose more. not coming that bottom-line can it multiple in

We've there of loyalty some mentioned launched a are them, multiple new others. program. recently You've but

our to continue in for We heavily technology advertising business. invest

trying to and as can continuing are longer delivering And leverage periods opportunities what a share over time. that's of to on, and taking we're continue to capture is as really to we while vectors growth which and long-term operational view very market be maximize trying there multiple consistent many of

business CBT very performing is Mexico in The well.

on I about GMV, in GMV think it's trade and of We is focus build how it business. growth and cross-border non-cross we cross-border at a border can out of the product. very been a we when good growing XX the results example strong Mexico profitable deliver has

Ford comes next with the Our line Bank question. America. of from of proceed question Bob your Please of

we there, context thought were and more the talk Pedro, leverage of impressive. operating that and performance credit building book, about big can all in some was you the in gains the Mexico specifically? the There advertising

landing Brazil. last business page the the for week, And in the you've cross-border changed in

X.X to Conforme? how added You've are certification relevance in following process value new about proposition long you thinking Remessa million view? the take the your up about the cross-border and will of and Conforme And compliance listings. categories have Remessa gotten How

little as work? And far Libre? do initial from bit been the you in Thank titles the you have in well the can And of the changes about marketplace the stages, in of early then Mercado Pago? you. terms what lastly, talk both are many as launching model the a so how How economics with, users engagement Mercado

Ariel here. is this Bob, Hi,

generating been discussions with Let the border some weeks. last Brazil, have in which me cross few start in

And the the competing supposedly the we've scheme, several loopholes old import and against at been it's who created zero for Asian it's tax players some the companies Brazil for BXC rate years items were in moreover, So, importing country. implemented, in now. way

new So, is the the that increase it everyone. think actually we anything, taxes will way for if about scheme

from and with next is think lead the I currently scenarios will nonexistent. offering new that presents in be demand we in business will terms simultaneously the or value guess the times speeds day be in our for still model that the will as well same scheme tell we're of not, new but Libre but Brazil, improvements, new opportunity CBT Mercado far still if generated that country proposition increase actually best almost will the our time case day

in that infrastructure, etc, can So our we actually our business, a local payments the we taking our logistics, trust and advantage such of cross-border build brands, our scale robust strengths, our etc. as traffic, think own

as in at business our As you but some those in we triple Pedro twice digits put much website, is we if as growing look Mexico countries. also and our growing what are Colombia, before, Chile of cross-border cross-border in was focus each doing where saying is in

be So, it we our play the effort We'll around out. scheme. with probably think will we way could And some putting so. in allow cross-border build the us there guess that's do to resources something whenever new I

early, Libre, version first it's Regarding we of think our Mercado the deploying catalog. I just increasing products, too are the

share to you numbers I many not one, leverage take that guess to on in sell Pedro, either. Mexico? be to much not So want

Yes.

it's expansion EBIT commerce the Mexican margin margin and drove both in share the and growth remarkably both across Mexico applies Brazil this and the products, expansion. in And So, been Brazil to in as of well, consistent multiple fintech. and lion's

other So all of with coming that strong contracted with exception management revenue margin in the solid much streams slightly, cost and are the growth revenue. pretty XP very in

in to nor important that's So, by this credit think I wasn't in Mexico driven Brazil. point solely out. mean, I

take? one follow-up think going process that if Ariel, you to how and just Conforme long compliance I Remessa and the I is certification do could, is

I depends on ourselves. government than it on think the more

to hard it's So, that question. answer

but present and an in adjust cetera, predict. et could It's customs, that, think that, We as from such et opportunity was saying before ready perspective us, I are to eager a engage a cetera. government to for hard to processes this scheme. timing We

Thank Understood. you much. so

here. Bob, what we think

Just one thing. more

important. think I it's

play, asked financial around model. You the the model on

outlay this Most controlled. important on platform. it's content upfront primarily are is contracts a is think out an video structured of extremely on to share. Remember, with advertising I that, point revenue the demand the

solid the content we economic of technology share will efficiently owners. on to outlays in commitments the of with but managed, so, really are terms And out work and the most model build content learn, are trying rev product around

Super Pedro. helpful. so you much, Thank

from the comes of of Andrew Morgan Ruben question next Our Instructions] Stanley. line [Operator

open. Your now line is

the on items what Curious XX here. drove bottlenecks increase Hi, that? fulfillment what's thanks penetration. rate. We are quarter, the you an structure? at fee further? point basis then driving increasing basis for and what saw the of the Thank about step take in for looking when you. shipping Brazil logistics change fees the the about XX question, for increase a see How the are Curious that within we couple point thinking figure And

I So, the see program. regarding fulfillment, in on engage with first trying stronger from demand one our to sellers fulfillment

existing to I think also onboarding technology we new plus cellular our and have seller improved product farming. streamline

the tell inventory and technology drive we more them into exactly the sell and help warehouses. to our So, will fulfillment have sellers in what tools to we think to

combination in penetration. the That the part. key explanation behind first was two probably is the the of increase So, the fulfillment

The second one, me? can Andrew, you remind

increase the the around fees. impact driving are quarter, we just in in Thank what's Yes, you. it? seeing, shipping Curious the

Sure. that's a take mind at market combination rate, shipping When you you that, two in look bear things. should of

it's you their costs. hand, but one including have our we for and hand, logistics the how On sellers distribution charge services, other mainly on the costs, buyers contract much

So basis you the see a both. rates XX that improvement combination take in points of shipping are

So our and we effective pass makes our have very the second productivity the explicit to always inflation sense. as have buyers well. try operation And also that from in trust sellers, on been or we to trying improvements been distribution whenever hand, disciplined saying in get logistics to will it we

two points the are in see is we there. you combination of XX So that basically explaining basis the the

comes Marcelo Please Santos with Our proceed line JPMorgan. the of Instructions] your [Operator of next question. question from

taking have evening to questions. all. Good Hi. Thanks my for I two.

costs wanted about might that I Argentian effectively dealt to how I by peso pesos, U.S. dollar. in first wanted to exercise with denominated you be that understand, you driven ask the release. the are but in that put The you the simulation did

first they issue don't got but did peso amount? Is the converted the And a will earn were somehow I example, or positive U.S. Did just For exercise if did some already whatever to the second use about That's the they that devaluation? to product in salary you discussed probably, credit producing discretion Brazil. I you. address question you cost know, this is in in question. to try developers imagine the linked there money and the is dollar. their and maybe this card increase Thank pesos,

me one. Let take the first

the because clarify all, can appear if Argentina. disclosure, when not from first impact note quantifying Argentine and denominated because obviously devaluing important necessary, that positive appear in also has in revenues think Argentine as a are detail segment, there not spirit Argentine as we simple Argentina, of margins services are impact costs export to it's to the in lot we costs from of segments And a and revenues on a don't other into of I more of get peso segments that denominated. the in the that other but the linearly the because is Argentina, there country devaluation

tie peso denominated could Your potentially have U.S. question but to about underlying, dollars. Argentine that an costs,

through. I into are disagree think Argentina doesn't a Obviously of that that's third terms derivative But in least is benefit currency. is that pesos. devaluation model this in of probably linear a the country IT generates because the that take would a Argentina in pass account. But of in Argentine midterm. its a Salaries devaluation high actually at costs the consistent inflationary a I

credits, the time conservative terms And are been with that year our Brazil, we business From of the, use more a very quarter. cards to the have given, recall, evolving With were made happy that issued now, in nearly therefore, I the last we during I in we regards you of half given we of the environment. credit say. models good last than number would We they until tripled. how last and to triple rebuild the more of in of we quarter year, card would in, as second say macro and

new are growing. early excited results about are cohorts marginally to to in the the game it's we're need still continue we It's seen. the but on very and We creative, continue

habits. means you they're that positive Marginally could generating

is want contribution negative? positive understand if Just or to the

have cohort small this number. issued is Let's say of is Still here. contribution positive marginal the contribution, we a the last marginal

question. next One moment for our

the Please Wolfe comes Deepak question Research. of proceed your of line with Mathivanan next from question. Our

on This for is Zach Deepak.

investment thinking The of specifically where reevaluating follow to question, about holding to Is on up you're levels the de in And macro, about side in on you're challenging. obviously staffing how unit currently? staffing do partner just on we how it of touching it's And then labor this and you the stand? line the things Brazil, this the the think Just last you're on And both you're area and Thanks. of growth just perhaps? of this slightly. kind side Argentina follow the kind specifically kind logistics on is kind of levels? kind relatively is kind kind well, of that the kind up forward, these inflationary just, of But pressured also continue happy or Or about or the in pass-throughs with expect inflation decelerating thinking where of relatively just and kind the accelerated to half kind base trends, going in curious of very area into investments an primarily are the Is that costs consumers. the kind think about of of of how of specifically onto noted it through forward? some inflation year? back passing Is the accelerating of stable? pace going or country,

take one me Let the last first.

asking better On expectations of for you're the continue Argentina, we off the on economist half think market. potential that back in I inflationary to year. see a macro tremendous

at If it's what Pago, built we've you in phenomenal. look

And a midterm or commerce than a anything, ago three is greater that maybe years there competitive if two from possibility Our extremely position now strong. might is position course correct. Argentina

areas and like back it anything might our that scaling growth more to that where a one If more. can even bit considering into little we anything, we country the sense the year a not the out. the unit or definitely half of we're accelerate So, down lean be commitment have pulling of in

outperforming anemic. there been to I growth be side, Mexico, Argentina it's so the levels compare growth, side, fintech unit you Chile if been actually commerce on the re-accelerate Brazil, unit absolutely on historical might firing opportunity been all cylinders. on have there think in Argentina, has an to

Regarding from but one first from I also is usual coming of operations, inflation from and question, the coming part its salaries, both. inflation. your it's the on say second would hand It's diesel

So been year, average the country. case typically inflation than across country the in past, we inflation every in say. in half being higher has see logistics I'd And that the the LATAM, of

Please our question. standby next for

question Credit of Ju the Suisse. Stephen comes next of from Our line

now is Your line open.

So, even this GMB first jump see meaningful party it's to here basis. really in on sequential a your nice

of shopping the but seeing you can of the you to today you the talk in can plug also look if now? behavior you. it's the And electronics, assortment terms thinking your evolved of be mean, about consumer? in consumer some gaps that about So, right to you you given effect may where in competitive else can Thank the environment? has have expand business this terms secondarily, might halo how And, that I lower greater willingness or talk hopefully

here. Stephen, Hey, Ariel

So a consequence yes, see the all investments the have acceleration we this years. into for been as we of business several definitely putting that

the ensure improvement, technology, logistics user our selection the our efforts and to our business, retail expansion, experience price So and assortment competitiveness. our investments and assure

are So the see. and generating behavior you I transactions more in to and customers are definitely numbers driving that guess, which think Libre the our performance brand way our levels platform, we linked user the the combined all Mercado love

selection we trying part we In so will doing terms market. That's Thank the continue you. of in and biggest the available guess, assortment will to in experience, build essence future. near our of continue I the to

question. our moment One next for

proceed comes Please of Clara Itau line Infantozzi of question. question from your BBA. Maria next with Our the

XP relates question Hello, operation. for question. the my to taking everyone. Thanks My

showed growth but trend, quarter, this consistent with margins. still to is dilutive improving in You profitability also

we you. landscape in hear operations? improvement also, to on for about it's and the here more I'd it be please your perception the to margins XP possible, details an with about Thank like competitive So Brazil contributions Mexico? elaborate better when in like would to And if expect should try

Okay.

sequentially. that, margin fact of not still profitable, structure, So the out we very operational way on we versus year-over-year significant actually build It's still competitors. and out even line, as some in our of been organization, had a and subscale and XP has as we improvement anticipated much playing efficiencies that gain margin in that's it's scale, our actually very the see with we improve function

And very growing in. next more leverage the When probably over only the quarters. competition, business not business continue so, that also a behind positive of with of But are continue It's I business need results is it we as operational pleased mid-term again, but to hand not invest turn the to natural the objective top-line to On quarter, from margins Arnt. the grows. how kick can will we and this improving ours. can over few a to perspective,

I America scenarios has one of think competitive probably. intense become the world So, most in the Latin

player big heavily investing the the have in region. We American

have We who players to their have Asian players position. local defend

different So serve guess to ways. the customers all I in trying we are

well. Actually, for strategy our played think has us, I

have Mexico you If been data, that Brazil, that in share, were the gaining even third-party at to look and environment. tough seems it case both this in market we in

trying the So few we out maximum last make together that hope investing the to putting behind so, we doing over and the years. to continue business, been have the investments of

One our moment question. for next

Please proceed Our comes the of Kaio from of next question. UBS. your question Prato with line

Hello, Good for side questions. two Thank to the opportunity evening. have I my ask please. you on everyone.

net The on first the after business. is margin losses of interest the

the the NIMAL quarter, So high. included and you that which see remains the even this interested funding including cost and was cost funding to disclosed NIMAL

your NIMAL we're since looking costs quarter, only to that first while the not compare that is you high. your XX% was XX% like it if So funding was NIMAL,

just to take just of you that or my question. understand I'll here, you like, leads then with funding costs could if them? own up And So include one all to funding costs calculate costs these how and and follow how flow funding

Sure, Kaio.

So credit the underlying of on cost is cost the book. blended average the funding the

to fund So it's participation. the physics take that and and cost the that the cost of equity the of our on we it's debt

the well as then cost this like funding So, the… and third-party includes

indeed. third-party well, includes it of cost the Yes, funding as

create of fintech are. the business the Okay and we question, second

takeaway XX the more the reduction credit had than business, excluding uh, a of points quarter So quarter. to

basically quarter basis. a change interest We in see to of see rates. part fees, but a of So you didn't in in side a can related major our quarter final

to what especially in prices would just main going here, light was in like lower especially expect expected and QX? what were can understand related to this forward, quality well, the drivers the if we as the So of

couple of distributed even key compression there the fintech drivers they're on among a three rate these fairly So and of the the take drivers.

percentage Argentine financing overall on compression the had as financed the tightened been in there's revenues. that's revenues. of a rates Argentina reference less as on And of We've So, going TPV Argentine profitability some up, have also financing.

decrease Argentina, business, to shift mix have the in on wallet In rates saw some also Argentina. continues well, intake which but and incredibly we QR the through fees perform in that the different monetizations transactional other

And and roughly also a less in devices then in the of we Brazil a larger up sold third MPOS more rate primarily business drove merchants. into as also take That's market the more fintech. move compression

with machines. they obviously have TPV less per purchase but We merchants merchant, higher

the have fintech of so, three each on said, new machine And take one sales. roughly rate. similar net I driver the like as sales the the on And these third revenues Decelerates on compression. drivers the machines a is of of compression magnitude fintech

And very for these that always are at loss. Kaio machines in mind mentioned, point Pedro sold a the last

also but lower So cost. revenues, lower

moment Instructions] question. our next [Operator for One

comes question Autonomous. Geoffrey next Our of the from of Elliott line

Your line open. now is

they're of pitfalls you. existing credit have? feed of Thank who've a lending market What create to different opportunities from got in at clearly Mexico, How you terms Could of a the does of to credit the do? underwriting before? potential and less amount into penetration more credit that experience about in are of taking that consumer, credit relationships people does the we the the what that very talk likely Brazil bit

Hi, Geoffrey.

be by you penetration. And country later Mexico highest as it's our Mexico already with, platform. we a consumer higher that for for ever, This countries, beyond opportunity our start to the ever, have higher first to huge the third products portfolio. the time stands in the all where is within originations, than the largest largest Mexico definitely and continues our So, now Mexico is for for say, a the the book rest first in pay one in row other see of quarter we consumer than the far overall country. time buy is

So, we are the opportunity. overall excited very with

be opportunity into we continue card. and we Our have products. serve friends started believe for we what a on We consumer opportunity beyond countries to and and that that our huge beyond an we our in family earlier then It's to leverage to still but many we credit and ecosystem, general continue users And NPLs decrease. why credit transaction less supposed can our have see launched good and it. have credit expand is this very got market we to credit of of that's card small, our year, other very penetration leave who

Some of and to them we current are not in well. an opportunity believe have therefore, we very scoring worse, them serve

with as history people And don't a any lending before? have to not who much just pitfalls them of credit because credit's been to available

opportunity. our it's that believe We

we very information have know, they MercadoLibre. of with, have typically our you start done and small transactions the to are As on loans

has since continue So we well growing I this. working and we been very to started think that are

for moment next One question.

question. Our next Please of BTIG. question the of Fong line from your Marvin comes proceed with

for me. questions Two

a and So renegotiation Brazil program. I think, it's process the is in of then debt just begun,

encouraging loyalty about can second you credit in versus some you more new program? evolves? metrics this and And have as program the released what's question prospective already program? loyalty new opportunities statistics. of any new share of productive was the are specific users not it's just question, view in features some a program I mentioned, program. program your you Do any sort are do it think target plans people then the the of to about curious, are you credit what for this unlock borrowers, how to And you could loyalty are launched that is I more My and think people? extending

Great.

in to our base. and Brazilian credit So see through the we to user a we own users began the initiatives general, consumers deleverage at on too it I It's to probably is be to tell, not. the program share helps generates to whether point. those early burden insights a banking it a In whole, lending many conceptual consumers, flow to first answer probably target areas general, backdrop this on through in healthier able think, with open you ease of other will or if not deep but consumer

changes fact and so, partnerships we simplified content program, to can understanding loyalty, the to announce program to On looking sign to that access give to efforts to more the works, improve of continuous how offer continue loyalty that loyalty Libre unique your more us more build think and a both benefits. very We program. life, users the gives straddle that differentiated and your a financial to we Mercado life opportunity commercial that,

that partnerships have overlays and really MELI play. We complemented content content have gotten with now some strong

It in that has we are out for user to validates which proposition benefits. sign growing to data their numbers users paid quarter, earning around to building pay be actually been loyalty the continuing can loyalty quarter continues program, for positive. we on our willing the they we're consistently who so lift a on necessarily been get so and compelling The that they are program so program. the program building the the that And those into haven't think users focus users, we gain very loyal way but of up after the

in shared some have those previous of calls. We

stay So, tuned.

advantage. turn program competitive loyalty the to effort relaunch that and it's You'll a see really a a continuous soon, of into

One question. for our moment next

Please next of from of your question. the line HSBC. question Neha Agarwala Our comes with proceed

strong. My Brazil to GMV be Hi. -- bit, question. but a Thank growth sequentially, first the it strong. It regarding is which you remain remains for my can taking question

market value are my now? So gain do gain helping America to the and market you you is general, question. So the in main that's behind growth Or benefiting Do share proposition first to after drivers what your some see continue assortment GMV share? and the think you that?

yield average is if a yield credit yield, question regarding And quarter cards, just consider we book. yield? that bit see to up this the to more my we repricing What on of led calculation, loans seen consumer led book which growth this your in XX%. increase My do went has not short-term your you some interest has that that? the If or the the dilutive you increase this last to loan provisions, on income. have Has if from second despite elaborate XX% loan growth strong in there the annualized is are in in to in that in could been

question on could, that something Brazil taking Mexico, or you there? you the do the future? much. Thank are like what you you in deposits my you Have last to would that is strategy already And deposits. in think and customer Is customer so is

Ariel Neha, Hey, here.

the So, years. business share today is gains basically the been is like a everything think in in that last I'd today XX XXth over we market doing that MercadoLibre's birthday growth consequence the we've are and seeing of this and acceleration to

available like So, the think we proposition value that future. behind the market, the in we putting and we'll and we customer in efforts have building think, near experience continue our best to and

is started On knows. MercadoLibre I on things, XX since kind birthday everyone happy It two yields, years Marco think as you're in Great, it garage, a hit it. of

to So we've to. credit continued extending be selective we're fairly who on

upward segments. costs also pressures We markets. We've expanded our segments, into risk seen um, of in terms in mid to some risk into funding higher haven't, have started some we move of but slightly

And also bad a improvements combination debt what led in NIMAL APRs. in higher driving significant has those so improvements The yield of been and on basis. the is to sequential that's improvement

regard in we remunerated markets from each are and pay to we users what get accounts able to with do Mexico Argentina. those is in Brazil, What of are offer three taking funds. typically in And the main we which deposits,

point this in in this zero. So XX%. in which zero from And is to XX%. And to CVI, Brazil for Brazil Mexico, compares in pays to which savings is close banks, many Argentina at is accounts example, cases close of XX% is

in as single in Argentina. growth part very in so, using of of that growing in been the question, very growth is take been management high digits, we under double in users a inflation even have high Not The XX% accounts but seen triple last digits after year. Brazil digits high for assets have of well a has the our terms that, case digits. into inflation. But lot sorry, these number the if creating the you Argentina And triple digit, of deposit very consequence of double

and and very product. very a And Mexico, also it's in in good competitive

I Argentina. rather Brazil as paying in to in but still compared the think the we fairly rates market, or higher one the it's new are

volumes as depending country. not we take are are but do countries volumes forma the in and the of But the regulation are we in the permit as not in for Mexico, all by at for So deposits what money Argentina, three the in of many then high. of a If deposits case deposits all high, and example, on do case run those fund market third-party.

roughly? would say is book by customer deposits And how now of much loan backed you your

can of something And nearly back deposit in is assets it's and it country because most only we to we of marginally the all the returns passing tragedy grow, at we are stage Brazil. where deposits. The those we credits we we get this do to marginally do management through therefore the, from that and under this have use the

CDs I say is which take marginal, it, equivalent stage we is and when in. So this do at it our only of CDBs,

One next question. moment our for

with Jefferies. Our next question. comes your the Please line from John question of of proceed Colantuoni

Hi, are some you us how this the on question. could Argentina, in comfortable more you Thank region to taking the then performs in is card still seen credit credit second Chris Mexico on and of And Brazil plans there? have in terms with John. color by Can any product get a in primarily comfortable most quarter? you shoots it, more with that for Thanks book expand the expanding expanding your give green you feeling you. beyond or

John. Hi,

books across see perform we credit to improved. continues NIMAL, and think which well So to the that good have the I board continue very

we expectation that lower. in of these rates default rates raise think higher I and were

our below quarter able in growing NIMAL. portfolio origination probably as have still we the And But quarters mentioned down. of Mexico. probably was we last we both for you rate which ago, in Brazil, come volume, fall have grow been sequentially, are second our peak year. been Argentina to to year have continue the a we last and several So the highest In and record

with the So growing volume. willing and I to think are continue result the we excited

a quarters come row. at five down four, as to bad debt last look in for you were two, one, If a percentage has of our three, portfolio, it

second the quarters, increasing last of So last the since have reducing for the we year debt, portfolio. five quarters, of the size in last bad quarter the been

case I below still it's Brazil, it what of year mentioned the was ago. in as a Although

so conference showing am I questions back turn Officer Arnt, this the Instructions] time, Chief I would [Operator to no for Financial further like MercadoLibre's, Pedro to at closing remarks.

continue off Thanks first clearly paying years share, of of and all power everyone. Great top our of to off. the half, Phenomenal start it to working, the XX showing operational gain model year.

in forward the to quarter. for you thanks we and look a interest updating So

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

You may now disconnect.