August 5, 2025 • 12 mins
Mercado Libre CFO Martin De Los Santos tells Bloomberg that investments in e-commerce and fintech may add pressure, but he doesn't expect tariffs on Brazil to have a direct impact on his business. He speaks with Bloomberg's Carol Massar, Matt Miller, and Nina Trentmann
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:08):
Hey listen, we have been really lucky in checking in
on the c suite this week, and a lot of
it has to do because so many companies around certainly
across the United States, but around the globe also reporting
their results. Shares of Mercado Libre they are actually trading
up about two point eight percent in today's session. They
will lower in the pre market, but certainly the regular
session investors coming in. This is after the e commerce
(00:29):
firm posted earnings that missed estimates. As the company ramps
up marketing spending to recruit more users, now move to
lower the threshold for free shipping in Brazil, also cripping profitability.
We'll get into that in just a moment. We'll point
out analysts the strategic value in these initiatives, saying they
will help shore up long term growth even as they
weigh on margins for the time being. So let's get
into the business. Time for our CFO briefing with us,
(00:51):
his Martin de los Santos, he's CEO of the e
commerce firm Riccardo Libre. He joins us from Montevideo, Uruguay,
and he will be featured we should point out in
the upcoming edition of the Bloomberg CFO Briefing newsletter, which
you can sign up for at Bloomberg dot com slash
CFO Briefing. Also with us as Nina Trapman. She's Bloomberg
News senior editor who writes the Bloomberg CFO Briefing newsletter.
(01:14):
She's here in studio Martin. Great to have you here
with Nina, Matt and myself talk to us about the quarter,
because it does seem that investors analyst weighing in that
the biggest question is on investments and what you are
doing how they will provide some future growth. But welcome, welcome,
thank you for having me.
Speaker 1 (01:34):
How are you?
Speaker 3 (01:35):
Yes, we had a great quarter, really in terms of
the results that we delivered revenue Glubay thirty four percent
a year, the delivery operating income a record operating income
of eight hundred and twenty five million dollars. I'm more
important than that we continue to grow our news surveys
both on our commerce and fintech platform. Our buyers on
(01:55):
the commerce platform luble by twenty five percent year a year.
Speaker 1 (01:58):
On fintech's rule Bay thirty percent.
Speaker 3 (02:01):
Credit book double year and year GMB, which is the
volume to accepted America liver grule by twenty nine percent
in Brazil thirty two percent in Mexico. In both cases
we continue to gain market share, so very good, you know,
very strong operating metrics. And like you said, this particular
quorder was a quarter of investments. We opened two new
(02:22):
food filming centers to add to the more than thirty
four film centers that we have throughout the region.
Speaker 1 (02:27):
We also made a big change.
Speaker 3 (02:30):
In terms of lowering the free shipping threshold in Brazil,
which is a strategic move that we have been doing
for many years and it's paying off very nicely. And
also we got you to invest in a credit card,
but very excited normally about the results. More important than
that about the future and the opportunity that we had
ahead of us, both in commerce as well as filtech.
Speaker 4 (02:51):
You mentioned the threshold for free shipping in Brazil as
one of the contributors. I think to you missing estimates
for net off it as well as core earnings. I'm
just wondering, as a CFO of a fast growing business,
how do you think about profitability and how do you
manage the short versus versus long term that's.
Speaker 3 (03:10):
I mean, we talked about this, Nina, I remember talking
to you a few quarters ago.
Speaker 1 (03:14):
That's it.
Speaker 3 (03:15):
We try to balance, right, We try to balance short
term profitability with the growth opportunities that we have ahead
of us.
Speaker 1 (03:21):
So we want to make sure that we do not
miss those opportunities.
Speaker 3 (03:24):
When you look at commerce penetration of e commerce in
Latin America, it's roughly mid teams fifteen percent compared to
maybe twenty five percent, thirty or forty percent in China,
hour in the US, So there's plenty of room to
continue growing the fintex side of the business. The same
thing happened most people in Latin America have not been
(03:44):
financially included by the financial system, so that we see
a large opportunity to expand our footprint on the fintech
side of the business and Marcalo Pao so at the
same time, to capture our opportunity, it requires investments. Some
of those investments might put some short pressure, but I
think this is a good example. When we lower the
free free shipping threshold, it does put pressure in the
(04:06):
short term, but we have approve and over time, and
we've been doing this since twenty seventeen when we introduced
free shipping in Brazil. At that time the free shipping
threashold was one hundred and twenty rarees. We brought it
down to eighty and now we brought it down to twenty.
So we have proved all the time that by lowering
the free shipping threshold, we eliminate the most you know,
(04:27):
the high, the most frictional point in terms of buying
things online for people. So we're eliminating that friction, really
generates a lot more volume and then eventually that translates
into profits.
Speaker 1 (04:39):
So I think it's a it's a strategy that has paid.
Speaker 3 (04:41):
Out to us, and the long term investors of Margalivera
understand it, and we're already comfortable with the investments that
we're doing.
Speaker 4 (04:48):
You mentioned Brazil. It's of course an interesting market just
in the current terror of debates that we're seeing with
the Brazilian government so far holding out tow to Trump
and basically not giving in on the Trump Terraff suggestions
for Brazil. Just wondering and how far are you seeing
(05:09):
that play out in terms of consumer confidence and consumer spending.
Are you seeing any impacts in countries like Brazil I
know you're also doing business in Mexico and other countries,
all of which will face higher terrors as part of
the US renegotiation of terrorsts around the world.
Speaker 3 (05:26):
Yes, this is something that we are monitoring closely. Obviously,
we do not export into the US, so there's no
direct impact on our business, but it can have secondary
effects on the economy, as you mentioned, we have not
seen that so far. As I mentioned earlier, we are
growing by twenty nine percent our GMB in Brazil as
that the management which is amount of money investing of
(05:49):
our users, investor mark delivery more than DOW in Brazil
ear year. Our credit card book has grown by one
hundred and eighteen percent. The profitability of the acid quality
of our credit will continue to be very solid in Brazil.
Speaker 1 (06:02):
So we have not seen any you.
Speaker 3 (06:03):
Know, any deterioration on macro, on consumption, but obviously it's
something that we are monitoring closely.
Speaker 5 (06:10):
Martine Gwendia Matt Miller here in the studio with the ladies.
I was really blown away by the growth at Mercado
Credito and I wonder if you're watching closely for signs
of credit stress there, because I think you had like
ninety percent growth.
Speaker 1 (06:29):
That's correct, that's correct. Thank you for for a question.
Speaker 3 (06:32):
Yeah, obviously, when we look at credit, we take it
very seriously. We are very careful in the way we
manage credit, but the way I used to run the
great business before taking the position of CFO. So the
first thing we look at is the health of our book.
We saw that npls and we disclosed this number are
the lowest record, lowest number since we've been disclosed in
the metric. The NAYMA, which is a measure of profitability,
(06:56):
is also improving quarter on quarter. So we see very
healthy science in terms of our book and a profiliarity.
So the reason why you're seeing ninety one percent growth
in our credit book is because we are seeing good
results in terms of our models predicting default rates and
the quality of our prede book continues to be very healthy.
(07:17):
If we need something different, we will slow down because
you know, we're very conscious with the way we manage
our credit business.
Speaker 2 (07:25):
We're talking with Martin de los Santos. He is the
CFO Mercado Libre joining us from Uruguay. We should also
point out that this is the largest company we to
point Latin America's most valuable company if you think about
market caps, so really significant. We were talking about fintech,
and you know, you were talking about kind of the
health of that portfolio, but what can you tell us
(07:47):
more Martine when it comes to the mix of customers
that are in that portfolio.
Speaker 3 (07:53):
I think what we're seeing is we're seeing all the
different type of customers within the economics segments of the population.
Keep in mind that we acquire most of our users,
most of our credit users from the marketplace and all
types of people using our marketplace, so we have the
advantage of having the distribution of medicalivery, but also they
(08:17):
buying information that those people have on our marketplace, and
we use that information through AI and machine learning models
to escore people, and we have models that are very
accurate at predicting credit risks.
Speaker 1 (08:30):
So you will find people of all kinds of.
Speaker 3 (08:35):
Social levels within our ecosystems that are like half of
the people that we offer grade too. We offer credit
for the first time they never had access to create.
But also the other half are people that properly moving
their fintech business to us because we offer it much
better user experience than the traditional bands.
Speaker 4 (08:53):
Martin one question in terms of earnings, I noted that
you also pointed out the impact of the Argentine peso
on your results. Of course, we've seen JAVMLA make various
changes in Argentina in recent months, including making changes to
the companies to the country's currency, which has resulted to
in basically the spread between the official and inofficial rate
(09:16):
falling apart. Just wondering how that's impacting your business and
specifically also are you changing your hedging strategy for Argentina.
Speaker 3 (09:25):
Yeah, I think that the HEADLFT of Argentia that we
continue to see a big recovery. I mean unique virus
in Argentina group by thirty percent your year, our GMB
group by seventy five percent in local currency or thirty
five percent in dollars, the items sold on the platform group.
Speaker 1 (09:41):
By forty six percent, so very strong recovery.
Speaker 3 (09:44):
As we see inflation coming down, consumption improving, and also
as you mentioned, the FX market.
Speaker 1 (09:51):
Be normalized also helps our business.
Speaker 3 (09:54):
They opened the economy, so we are bringing more products
from the US into Argentina as well.
Speaker 1 (09:59):
So most you know, most of the business.
Speaker 3 (10:01):
Are performed here extremely well in Argentina and we're very happy.
Speaker 1 (10:03):
With the way things are going for our business.
Speaker 5 (10:05):
There you mentioned, Martine, you ran credit before at Mayer Coutolibre.
You ran also strategy into it and you were at
Paine before that, so you know strategy up and down.
I want to know about your strategy regarding ad revenue
because it was also searched like up thirty eight percent.
Is that a profit center for you, a future profit
(10:28):
center or do you view that more as a tool
to drive your core marketplace growth?
Speaker 1 (10:33):
Yeah? Other times in business is roughly a one billion
dollar business.
Speaker 3 (10:37):
He's rowing at thirty eight percent, as you mentioned, and
he's as a profit business for the company, but it
has tremendous potential going forward.
Speaker 1 (10:45):
If you look at the number of people interacting with
our ecosystem.
Speaker 3 (10:48):
Last year we had more than one hundred million people
buying on Marcaire have sixty eight millium monthly active users
of our fintech platform.
Speaker 1 (10:56):
So in terms of a.
Speaker 3 (10:56):
Number of eyeballs within Latin America, we are the third
largest pan regional platform and that gives us a great
opportunity to continue distributing advertising. We also can leverage all
the one first part the information that we have on
our users or to target marketing campaigns. So we see
a big, very large opportunity. I think it's more future
(11:19):
to the past and advertising business. We're just getting started,
but as you mentioned, we have been growing very rapidly
for the past several years.
Speaker 1 (11:26):
There's plenty of growth going forward.
Speaker 2 (11:28):
Martin just got about twenty seconds. We always liked to
when we've got lucky enough to have someone like yourself
a global CEO, how would you describe the global outlook?
And just quickly.
Speaker 3 (11:39):
Yeah, I think well, obviously we operate in Latin America
and depending on the countries and countries have some tough
micro situations and some others might be in a very
conditioned we're talking about Argentina recovering. But at the end
of the day, I think in our business in particular,
the trend of people moving online is so much stronger
than macroduct We have plenty of opportunities ahead of us.
(12:02):
And the same thing on fintech. Right where we're operating
in America, where petuation of fintech products is very very low,
we play a big role in terms of generating financial.
Speaker 1 (12:13):
Inclusion throughout the region. So we're very optimistic about at
least on our.
Speaker 2 (12:17):
Region, So glad we could get some time with you.
Martin de la Santa Ceo, Mercado Libro, cfo, excuse me.
Mercado Libre gave him a little bit of a promotion
in Inina treatment.
Speaker 1 (12:29):
Thank you.
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:08):
Hey listen, we have been really lucky in checking in
on the c suite this week, and a lot of
it has to do because so many companies around certainly
across the United States, but around the globe also reporting
their results. Shares of Mercado Libre they are actually trading
up about two point eight percent in today's session. They
will lower in the pre market, but certainly the regular
session investors coming in. This is after the e commerce
(00:29):
firm posted earnings that missed estimates. As the company ramps
up marketing spending to recruit more users, now move to
lower the threshold for free shipping in Brazil, also cripping profitability.
We'll get into that in just a moment. We'll point
out analysts the strategic value in these initiatives, saying they
will help shore up long term growth even as they
weigh on margins for the time being. So let's get
into the business. Time for our CFO briefing with us,
(00:51):
his Martin de los Santos, he's CEO of the e
commerce firm Riccardo Libre. He joins us from Montevideo, Uruguay,
and he will be featured we should point out in
the upcoming edition of the Bloomberg CFO Briefing newsletter, which
you can sign up for at Bloomberg dot com slash
CFO Briefing. Also with us as Nina Trapman. She's Bloomberg
News senior editor who writes the Bloomberg CFO Briefing newsletter.
(01:14):
She's here in studio Martin. Great to have you here
with Nina, Matt and myself talk to us about the quarter,
because it does seem that investors analyst weighing in that
the biggest question is on investments and what you are
doing how they will provide some future growth. But welcome, welcome,
thank you for having me.
Speaker 1 (01:34):
How are you?
Speaker 3 (01:35):
Yes, we had a great quarter, really in terms of
the results that we delivered revenue Glubay thirty four percent
a year, the delivery operating income a record operating income
of eight hundred and twenty five million dollars. I'm more
important than that we continue to grow our news surveys
both on our commerce and fintech platform. Our buyers on
(01:55):
the commerce platform luble by twenty five percent year a year.
Speaker 1 (01:58):
On fintech's rule Bay thirty percent.
Speaker 3 (02:01):
Credit book double year and year GMB, which is the
volume to accepted America liver grule by twenty nine percent
in Brazil thirty two percent in Mexico. In both cases
we continue to gain market share, so very good, you know,
very strong operating metrics. And like you said, this particular
quorder was a quarter of investments. We opened two new
(02:22):
food filming centers to add to the more than thirty
four film centers that we have throughout the region.
Speaker 1 (02:27):
We also made a big change.
Speaker 3 (02:30):
In terms of lowering the free shipping threshold in Brazil,
which is a strategic move that we have been doing
for many years and it's paying off very nicely. And
also we got you to invest in a credit card,
but very excited normally about the results. More important than
that about the future and the opportunity that we had
ahead of us, both in commerce as well as filtech.
Speaker 4 (02:51):
You mentioned the threshold for free shipping in Brazil as
one of the contributors. I think to you missing estimates
for net off it as well as core earnings. I'm
just wondering, as a CFO of a fast growing business,
how do you think about profitability and how do you
manage the short versus versus long term that's.
Speaker 3 (03:10):
I mean, we talked about this, Nina, I remember talking
to you a few quarters ago.
Speaker 1 (03:14):
That's it.
Speaker 3 (03:15):
We try to balance, right, We try to balance short
term profitability with the growth opportunities that we have ahead
of us.
Speaker 1 (03:21):
So we want to make sure that we do not
miss those opportunities.
Speaker 3 (03:24):
When you look at commerce penetration of e commerce in
Latin America, it's roughly mid teams fifteen percent compared to
maybe twenty five percent, thirty or forty percent in China,
hour in the US, So there's plenty of room to
continue growing the fintex side of the business. The same
thing happened most people in Latin America have not been
(03:44):
financially included by the financial system, so that we see
a large opportunity to expand our footprint on the fintech
side of the business and Marcalo Pao so at the
same time, to capture our opportunity, it requires investments. Some
of those investments might put some short pressure, but I
think this is a good example. When we lower the
free free shipping threshold, it does put pressure in the
(04:06):
short term, but we have approve and over time, and
we've been doing this since twenty seventeen when we introduced
free shipping in Brazil. At that time the free shipping
threashold was one hundred and twenty rarees. We brought it
down to eighty and now we brought it down to twenty.
So we have proved all the time that by lowering
the free shipping threshold, we eliminate the most you know,
(04:27):
the high, the most frictional point in terms of buying
things online for people. So we're eliminating that friction, really
generates a lot more volume and then eventually that translates
into profits.
Speaker 1 (04:39):
So I think it's a it's a strategy that has paid.
Speaker 3 (04:41):
Out to us, and the long term investors of Margalivera
understand it, and we're already comfortable with the investments that
we're doing.
Speaker 4 (04:48):
You mentioned Brazil. It's of course an interesting market just
in the current terror of debates that we're seeing with
the Brazilian government so far holding out tow to Trump
and basically not giving in on the Trump Terraff suggestions
for Brazil. Just wondering and how far are you seeing
(05:09):
that play out in terms of consumer confidence and consumer spending.
Are you seeing any impacts in countries like Brazil I
know you're also doing business in Mexico and other countries,
all of which will face higher terrors as part of
the US renegotiation of terrorsts around the world.
Speaker 3 (05:26):
Yes, this is something that we are monitoring closely. Obviously,
we do not export into the US, so there's no
direct impact on our business, but it can have secondary
effects on the economy, as you mentioned, we have not
seen that so far. As I mentioned earlier, we are
growing by twenty nine percent our GMB in Brazil as
that the management which is amount of money investing of
(05:49):
our users, investor mark delivery more than DOW in Brazil
ear year. Our credit card book has grown by one
hundred and eighteen percent. The profitability of the acid quality
of our credit will continue to be very solid in Brazil.
Speaker 1 (06:02):
So we have not seen any you.
Speaker 3 (06:03):
Know, any deterioration on macro, on consumption, but obviously it's
something that we are monitoring closely.
Speaker 5 (06:10):
Martine Gwendia Matt Miller here in the studio with the ladies.
I was really blown away by the growth at Mercado
Credito and I wonder if you're watching closely for signs
of credit stress there, because I think you had like
ninety percent growth.
Speaker 1 (06:29):
That's correct, that's correct. Thank you for for a question.
Speaker 3 (06:32):
Yeah, obviously, when we look at credit, we take it
very seriously. We are very careful in the way we
manage credit, but the way I used to run the
great business before taking the position of CFO. So the
first thing we look at is the health of our book.
We saw that npls and we disclosed this number are
the lowest record, lowest number since we've been disclosed in
the metric. The NAYMA, which is a measure of profitability,
(06:56):
is also improving quarter on quarter. So we see very
healthy science in terms of our book and a profiliarity.
So the reason why you're seeing ninety one percent growth
in our credit book is because we are seeing good
results in terms of our models predicting default rates and
the quality of our prede book continues to be very healthy.
(07:17):
If we need something different, we will slow down because
you know, we're very conscious with the way we manage
our credit business.
Speaker 2 (07:25):
We're talking with Martin de los Santos. He is the
CFO Mercado Libre joining us from Uruguay. We should also
point out that this is the largest company we to
point Latin America's most valuable company if you think about
market caps, so really significant. We were talking about fintech,
and you know, you were talking about kind of the
health of that portfolio, but what can you tell us
(07:47):
more Martine when it comes to the mix of customers
that are in that portfolio.
Speaker 3 (07:53):
I think what we're seeing is we're seeing all the
different type of customers within the economics segments of the population.
Keep in mind that we acquire most of our users,
most of our credit users from the marketplace and all
types of people using our marketplace, so we have the
advantage of having the distribution of medicalivery, but also they
(08:17):
buying information that those people have on our marketplace, and
we use that information through AI and machine learning models
to escore people, and we have models that are very
accurate at predicting credit risks.
Speaker 1 (08:30):
So you will find people of all kinds of.
Speaker 3 (08:35):
Social levels within our ecosystems that are like half of
the people that we offer grade too. We offer credit
for the first time they never had access to create.
But also the other half are people that properly moving
their fintech business to us because we offer it much
better user experience than the traditional bands.
Speaker 4 (08:53):
Martin one question in terms of earnings, I noted that
you also pointed out the impact of the Argentine peso
on your results. Of course, we've seen JAVMLA make various
changes in Argentina in recent months, including making changes to
the companies to the country's currency, which has resulted to
in basically the spread between the official and inofficial rate
(09:16):
falling apart. Just wondering how that's impacting your business and
specifically also are you changing your hedging strategy for Argentina.
Speaker 3 (09:25):
Yeah, I think that the HEADLFT of Argentia that we
continue to see a big recovery. I mean unique virus
in Argentina group by thirty percent your year, our GMB
group by seventy five percent in local currency or thirty
five percent in dollars, the items sold on the platform group.
Speaker 1 (09:41):
By forty six percent, so very strong recovery.
Speaker 3 (09:44):
As we see inflation coming down, consumption improving, and also
as you mentioned, the FX market.
Speaker 1 (09:51):
Be normalized also helps our business.
Speaker 3 (09:54):
They opened the economy, so we are bringing more products
from the US into Argentina as well.
Speaker 1 (09:59):
So most you know, most of the business.
Speaker 3 (10:01):
Are performed here extremely well in Argentina and we're very happy.
Speaker 1 (10:03):
With the way things are going for our business.
Speaker 5 (10:05):
There you mentioned, Martine, you ran credit before at Mayer Coutolibre.
You ran also strategy into it and you were at
Paine before that, so you know strategy up and down.
I want to know about your strategy regarding ad revenue
because it was also searched like up thirty eight percent.
Is that a profit center for you, a future profit
(10:28):
center or do you view that more as a tool
to drive your core marketplace growth?
Speaker 1 (10:33):
Yeah? Other times in business is roughly a one billion
dollar business.
Speaker 3 (10:37):
He's rowing at thirty eight percent, as you mentioned, and
he's as a profit business for the company, but it
has tremendous potential going forward.
Speaker 1 (10:45):
If you look at the number of people interacting with
our ecosystem.
Speaker 3 (10:48):
Last year we had more than one hundred million people
buying on Marcaire have sixty eight millium monthly active users
of our fintech platform.
Speaker 1 (10:56):
So in terms of a.
Speaker 3 (10:56):
Number of eyeballs within Latin America, we are the third
largest pan regional platform and that gives us a great
opportunity to continue distributing advertising. We also can leverage all
the one first part the information that we have on
our users or to target marketing campaigns. So we see
a big, very large opportunity. I think it's more future
(11:19):
to the past and advertising business. We're just getting started,
but as you mentioned, we have been growing very rapidly
for the past several years.
Speaker 1 (11:26):
There's plenty of growth going forward.
Speaker 2 (11:28):
Martin just got about twenty seconds. We always liked to
when we've got lucky enough to have someone like yourself
a global CEO, how would you describe the global outlook?
And just quickly.
Speaker 3 (11:39):
Yeah, I think well, obviously we operate in Latin America
and depending on the countries and countries have some tough
micro situations and some others might be in a very
conditioned we're talking about Argentina recovering. But at the end
of the day, I think in our business in particular,
the trend of people moving online is so much stronger
than macroduct We have plenty of opportunities ahead of us.
(12:02):
And the same thing on fintech. Right where we're operating
in America, where petuation of fintech products is very very low,
we play a big role in terms of generating financial.
Speaker 1 (12:13):
Inclusion throughout the region. So we're very optimistic about at
least on our.
Speaker 2 (12:17):
Region, So glad we could get some time with you.
Martin de la Santa Ceo, Mercado Libro, cfo, excuse me.
Mercado Libre gave him a little bit of a promotion
in Inina treatment.
Speaker 1 (12:29):
Thank you.
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