Hello, everyone, and welcome to the Mercado Libre Earnings Conference Call for the quarter ended September 30, 2023. Thank you for joining us. I'm 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 CEO, Marcos Galperín, Chief Financial Officer, Martín de los Santos, Fintech President, Osvaldo Giménez, and Commerce EVP, Ariel Szarfsztejn. Before we go on to discuss our results for the third 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. With that, let's begin with a summary of our results. Hello, everyone. I'm Martín de los Santos, Mercado Libre's CFO. For those of you who haven't met me, I have been at MELI since 2007. First, as a board member, and since 2012, as part of the management team. For the past seven years, I have led the credit business until last August, when I took the position of CFO. I look forward to meeting as many of you as possible in due course. I'm pleased to report a strong set of results in my first quarter as CFO. With a strong, successful third quarter across geographies, 2023 continues to show an attractive combination of growth and profitability, with a record in income from operations. With strong momentum across geographies in both commerce and fintech, MELI's revenues growth accelerated. Mexico was particularly strong, with revenues growing above 60% year-on-year, while Brazil also posted a greater performance with around 40% growth. These two countries have again increased their contribution to our total revenues. This strong business growth, combined with cost discipline, led to OPEX and SG&A dilution as the business continues to scale. Income from operations more than doubled year-on-year for the fourth consecutive quarter, with margins expanding once again. Brazil was the largest contributor to our profit growth, representing a significant portion of it. During Q3, in the commerce business, we saw acceleration in GMV and item sold growth in the three main geographies where we operate, with higher item supplier. This higher user engagement comes from continued experience improvements, especially on the logistics front, where we reached 48% of treatment penetration and offer better delivery promises, improving conversions and further development of categories through technology. As a result, we have a record of 50 million buyers and market share gains, especially in Brazil and Mexico. At Mercado Pago, off-platform TPV accelerated in all main countries. We saw an increased number of users and higher engagement metrics as we position Mercado Pago as a comprehensive financial service provider. On the digital account, we are particularly excited about the engagement, with more people using the remunerated account and other asset management solutions in Brazil and Argentina, and better NPS in Mexico from UX improvements. In payments, the highlight for Q3 has been online payment solutions that presented strong growth across the region. The great business continues to perform within our expectations to very healthy spread levels. As we saw NPLs improving, in particular in Brazil, we have accelerated the originations in all of our products. During Q3, we issued over 1 million credit cards and surpassed $1 billion in TPV for the first time. As our underwriting models continue to improve, we can tap into new opportunities, such as offering larger credit lines with longer durations to the best cohorts of consumers. Overall, in Q3, we achieved a combination of rapid growth, scale gains, and margin improvements, showing the strength of our economic model. To deliver these results, we have invested in technology that provides a world-class user experience that enables us to be more efficient in those of our cost structure. These results give us confidence to continue investing in future growth opportunities. Now, let me get back to Richard with business news. During Q3, Mercado Libre relaunched our loyalty program as Meli+, an important step to enhance our loyalty value proposition with a simpler structure, more compelling shipping benefits, and premium video and audio content. With Meli+, we now have a brand in which we can invest to raise awareness and increase engagement with MELI's ecosystem. Meli+ gives users access to a world-class content bundle, free shipping above BRL 29, and 12 months with free music from Deezer, among other perks. Our content bundle for Meli+ users includes Disney+ and Star+, and special discounts to subscribe to HBO Max, Paramount+, and Lionsgate+. Through Deezer, users are able to access a complete library of audio content and music, a service that we think users will be able to enjoy on a day-to-day basis. Users see the Meli+ offering throughout our apps and website, where the value proposition becomes clear as they shop with us, with the Meli+ logo clearly highlighted, building the brand of the loyalty program. The shipping benefits are key to the program. Meli+ users get free shipping on millions of items above BRL 29. This is the standard free shipping threshold of BRL 79 if the product is in one of our fulfillment centers and chosen for delivery on the user's Meli Delivery Day. As consumers look for products on Mercado Libre, they will see the Meli+ logo on the products that are eligible, and they can filter their search for Meli+ items. As a new delivery option, loyalty users can choose a specific day of the week to receive all of their packages. This solution enables us to sell and deliver lower value items with the great experience that Meli is known for, while maintaining cost discipline in our PNL. Users still have the option for same and next day delivery if they want their item delivered quickly, if they are willing to pay for shipping on items below the free shipping threshold, or for free for items above the threshold. To access all of these benefits, users can subscribe or earn their way in organically by engaging with Meli's ecosystem. Subscribing is quick and easy, and users can choose between a credit card, automatic charge from their Mercado Pago account, or a monthly invoice, so the subscription is accessible for different types of users. We're able to offer buyers the full benefits bundle for just the equivalent of two-three paid shipping charges. For users who earn points by shopping with Mercado Libre to get the Meli+ membership, our credit card offers double points, enabling users to reach the loyalty status more quickly. In August, we launched a big marketing campaign to raise awareness of the program, and initial results give us confidence that Meli+ complements our value proposition, bringing extensive benefits to even more Mercado Libre users. We're confident in the program's long-term potential because, as always, at Mercado Libre, the best is yet to come. Thank you. At this time, we will conduct a question and answer session. To ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Our first question this evening comes from Andrew Ruben from Morgan Stanley. Andrew, your line is open. Please go ahead. Hi, thanks very much for the question, and welcome again, Martin. Perhaps, Marcos, taking advantage of your joining today, it's been a period of strength for the business. We've seen a lot of the past years' investments flowing through to results. So as you look from here, say, over the next three to five years, I'd be curious to hear what the opportunities you see for Meli that you're personally most excited about still. Thank you. Hey, Andrew. How are you? It's good to be here. Yes, we are really happy the way the business has been evolving the last 24 months, at least, really growing very nicely, gaining market share and, lately also gaining scale and, increasing margins. As you know, we don't, we don't guide, but there are many exciting things going on, particularly obviously AI, that hopefully will enable us to provide our users a better experience, enable us to launch innovative ideas, and also, scale and gain efficiencies, whether it is in customer service or whether it is in fraud prevention or whether it is in the way, our developers, 15,000 developers, you know, go about developing and performing quality control, et cetera. Obviously, looking forward for the next three years, I think that's a key thing to look into. Great. Many thanks. Hello? Hi, our next question comes from- Hello. Irma Sgarz of Goldman Sachs. Please go ahead. Yes. Hi, thanks for taking my question, and congratulations on the results. Marcos, also taking advantage of you joining the call. If you're looking at the KPIs that determine compensation across the exec team or the leadership team, how do you think these will evolve from here? Again, thinking maybe over a multiple year basis. And asking this same question, maybe in a slightly different way, are there any incrementally new KPIs to watch for as you go into this next phase of growth and investment, or that you or the board feel should gain maybe perhaps more importance to incentivize the right amount of investment versus risk-taking? So obviously, we try to compensate our... myself and the key employees based in long-term results, not in quarterly or even yearly. Actually, our long-term retention program is a six-year program. And obviously, we are in a very dynamic- ... environment and a very dynamic business. If you look at Mercado six years ago, both in terms of scale, but also in the scope of things that we do, and where we are today, extremely different companies, and I expect that to be the case in the next six years. Whether it is in fintech that we are moving into, you know, insurance, that is already a business that has gained relevance and scale, whether it is assets under management that is growing so strongly across all of our geographies, whether it's our credit card business that didn't exist a few years ago, and it's a very sizable business or our overall credits business. So obviously, and there are new businesses that are coming along, and that we expect them to gain scale and scope. And as they do, obviously, they will have an impact in our results and in our compensation and in the KPIs, whether it is Mercado Play, or which is our advertising-supported streaming operation, or whether it's Clips, which is our short videos launch, which both of which are really gaining really nice traction. So obviously, you know, there are many things that we're doing, and as they gain scale, they become important in terms of KPIs and also in terms of results and compensation. I don't know if that answers your question, Irma. Yeah, I think, I think that partly answers it. Thank you. Thank you. Stand by for our next question. Our next question comes from Marcelo Santos with J.P. Morgan. Marcelo, your line is open. Please go ahead. Hi, good evening. Thanks for taking my question. I wanted to discuss a bit the profitability and margins. It was a very strong print that you had this quarter above the previous one. And in the previous one, you were indicating that you might give some back to reinvest in growth, but actually things improved from the previous quarter. So I wanted to understand what happened so that the improvement came, and how do you see this trade-off going forward? There's something new element that allowed the trade-off not to happen and you to grow and have margin at the same time. I just wanted to touch on this point. Thank you, Marcelo. It's Martin here. Yes, in fact, we did have a great quarter in terms of profitability, reaching 18% EBITDA margin coming from a last quarter of 16%. I would say that most of the businesses and countries performed extremely well during the quarter, particularly the 3P marketplace, that was the biggest contributor to margin improvements, but also the acquiring business, the credit business, as well as the advertising business, in that particular order, also contributed to margin improvements. When we look at by country, most of the improvement came from Brazil, where we improved 12 percentage points year-on-year, and Mexico, 6 percentage points year-on-year. Also, we are gaining scale. By growing as we did, we gained significant scale, and we were able to dilute part of our costs, which we obviously managed with a lot of discipline. Having said that, we have been investing behind our business, which is the main goal. We think that we are in a-- We operate in an industry where we have a lot of investment opportunities, and we need to make sure that we continue to look at the long-term prospects of a business. So we continue to invest in logistics, where we increased six percentage points of fulfillment penetration. We also, in this particular quarter, as we launched Meli Miles, we invested behind the brand to promote the new loyalty program. We continue to invest in the smaller countries like Chile and Colombia. We have a team of 15,000 developers that continue to build our product, and we're investing on our own product. So again, we are managing the business, not to a particular target, margin target, but we're managing for the long term. So this quarter was a very good quarter, not only because we improved the margins, but also because we grew, we gained market share, in particular in Brazil and Mexico. Thank you very much. Stand by for our next question. The next question comes from Maria Clara Infantozzi with Itaú BBA. Maria Clara, your line is open. Please go ahead. Hello, everyone. Thanks for taking my question. I'd like to talk a bit about the credit business in Brazil. You mentioned that you just accelerated the penetration in a longer duration consumer product here. Can you please elaborate on that? Should we expect a shift in LA's credit concession strategy in Brazil? And so far, how have you been perceiving the evolution of the credit quality of those new cohorts, please? Thank you. Hi, Maria. Yes, as we mentioned, we saw an increase in the spreads we are seeing in Brazil and therefore felt confident to increase the pace of origination in our consumer business there. So far, we're happy with the results we are seeing, and we're continuing to accelerate the pace of originations. We have also increased the pace of issuing credit cards in Brazil. For the same reason, we are encouraged by the results we are seeing and how every time we create a model, we have a better credit scoring and better solutions. Perfect. Thank you so much. Stand by for our next question. It comes from Kaio Prato with UBS. Kaio, your line is open. Please go ahead. ... Hello, everyone. Good evening. Thank you for taking my question. My question is also on the fintech business, please. You mentioned during the presentation the importance of the credit card strategy to be the main financial provider of choice of your user. So in light of this, my question is, out of your almost 50 million unique fintech users, how many clients see Mercado Pago as a principal digital account nowadays? If you have some percentage of principality that you can share, and how much do you think you can achieve in the future, please? Thank you. Caio, we have not disclosed in the past the principality. What we have disclosed, and this continues to be the case, is that when we look at all of our users in a given country, particularly in Brazil, which is the one country where we have more of our credit portfolio and more of our credit post-launch, what we're seeing is a continuous increase in the amount of products our users are using, and in the availability, not only of co-consumer grades, but also of credit cards. These two, together with asset under management, which is growing near triple digits in Brazil and Mexico, and over triple digits in Argentina, are, I'd say, a key component of a user becoming principal. All of the metrics are going in the right direction. The other one is TPV, generated both by a credit card and a debit card, but we have never disclosed a principal measure. Okay, thank you very much. And just to follow up, my last question is still on the credit card business. How are you seeing the discussion about the change in the framework of credit cards in Brazil nowadays? And what could be the impact on your side, not only in terms of potential PNL impacts, but also in terms of your appetite for further increase the origination on credit card? Thank you. Sure, Kaio. So I think that this is not the first time that this is discussed in Brazil. I think that the jury is still out. There are many things that are being discussed. One of them is having a potential cap on interest rates. Other one is probably limiting to some degree parcelas sem juros or interest-free interest rates. And the third one is probably putting a cap on the interchange. Each of those would affect us in different ways. Still very early. Until we have the details, we are not able to tell. We believe that parcelas sem juros is a key driver for consumption in Brazil, and probably that should limit how much that is affected. Okay. Thank you very much. Please stand by. Our next question comes from Scott Devitt with Wedbush. Scott, your line is open. Please go ahead. Hey, thanks. I had two questions, maybe a different spin on the first question, which is: You know, Marcos, back in 2019, this was like a little over $2 billion revenue business and doing, like, $1.1 billion in gross profit, and you're approaching, like, 7x those levels now. So, the growth, you know, through the pandemic and comping the comps and everything else, it's almost unprecedented, and yet you're growing at rates that are, you know, similar to where you were growing back in 2019. So I'm curious, you know, as you think about, like, what's transpired over the last four years, if you can kind of frame how you think about the mainstreaming of e-commerce, you know, because of the pandemic and how that may have benefited a market like Latin America uniquely relative to other markets versus, you know, drivers of the business that were more company specific, like improvements in the e-commerce experience because of faster shipping times and things like that, or the benefits of having a broader ecosystem with payments. Just how you think of, you know, the components or the build of how this business has gotten so big, so fast and just keeps growing at this pace? That's kind of the first question. And then the second one, if you could just talk a bit more about the advertising business in the quarter. I may have missed it. I didn't see the absolute amount, but if you can just talk about how that's trending and how you're thinking about the ad business longer term? Thank you. Okay. Thank you, Scott. So yeah, obviously, COVID was, in general, around the world, very good for e-commerce companies, and the same thing happened in Latin America. We basically doubled during COVID, during those two years, 2021 and 2020. But, you know, unlike what happened in other parts of the world, we continued to grow at a very healthy rate, once you know life resumed to normal. We're very happy about that. We think that we had done, prior to 2019, a lot of things. We had invested a lot of money and efforts and mostly technology. So COVID caught us at the right time, in the right place. We were able to to benefit, I think, more than other players in the region when that happened. And, since then, when we, you know, grew in scale, obviously, the power of the ecosystem is very strong. And, and we continue to add features and functionalities and products to this ecosystem, advertising being one of them, financing and the credit cards being another one, insurance being another one, and more recently, all the content plays, whether it's our partnership with Disney and other great content providers that we are distributing through Meli+, or whether it's Mercado Play, or whether it's our clips. So, we continue to add features and functionalities and products and brands, and I think we have created something that is pretty unique in the region and around the world, and each part, you know, strengthens the other. We have a lot of scale. As you mentioned, we are 7x the size we had, you know, a few years back. More importantly, our growth rate is still very healthy, and we have a very strong balance sheet, and we intend to continue innovating, continue investing, and continue focusing in the next five- 10 10 years, and not in the next, you know, three to four quarters. Then, Ariel can give you more background on advertising. Thank you. Please, Scott. Ariel here. Hi ... ads continue to grow well. We grew above 70% in revenue this quarter for the sixth consecutive quarter, with no major changes in strategy. We continue improving our product with feedback from advertising and promoting our solutions to different segments of sellers and brands. Product ads continues to be the main driver of growth, specifically the self-service sellers, but we are seeing more and more traction from other segments as well. Overall, we had a quarter with 1.7% penetration of ads as a percentage of GMV, but I think it's worth highlighting the case of Argentina. So structurally, even market dynamics, Argentina has a lower ads penetration, and if you were to factor in there the fact that inflation makes it even harder for advertisers to follow up our GMV growth, and also the effect of having a bit lower demand from advertising in Argentina because of structural context of, you know, more out-of-stocks and some other effects. It's worth saying that if you were to take out Argentina out of the equation, penetration of advertising in our GMV would be roughly close to 2%. Thank you both. Great quarter. Our next question comes from Melissa Byun with Bank of America. Melissa, your line is open. Go ahead. It may actually be Bob Ford, but good evening, everybody. Congratulations on the quarter, and thank you for taking my questions. Yeah, how much of the Brazilian GMV growth is coming from markets where you now have a distribution center, and faster shipping within Brazil, where before you were sending that from São Paulo or a more distant location? And then, what percent of GMV is now being delivered on a Meli Delivery Day? And where do you expect that to stabilize as we move forward? And then lastly, can you discuss your use of AI in search, product recommendations, and risk place? Thank you. Hey, Bob, this is Ariel. Thanks for your questions. I think we don't typically disclose demand data based on geographic segmentations or even logistics methods. But I would say, more and more, we are trying to grow on both of the segments that you have highlighted in your first two questions. So we are being proactive in trying to gain traction and market share in some of the regions where our market share today is underrepresented, and that means that we do see increased demand coming from areas that are more far away from our fulfillment center. Still, the main capitals and cities of Brazil do concentrate a big share of our demand. Kind of same thing happens with Meli Delivery Day. It's still super early days, so not many data or not much data to be shared on that regard, but I do want to say that it's slowly gaining traction, of course, aided by the launch of Meli+ in Brazil and in Mexico. So more and more, we are seeing consumers actively choosing the Meli Delivery Day as a way to receive their packages. Last question, in terms of AI and search, we are working on that. I mean, we are putting a lot of effort into building solutions around AI. I think we don't have much to disclose as of now, but search, reviews, questions and answers, buy box and products, CX, as Marcos was saying, copilot for our developers, we are looking at the broad range of AI uses for Mercado Libre to boost consumer demand and efficiency, and we're happy with the progress that we have so far, but not much to be said yet. Building on that, we have been using AI for a long time now, for many, many years, both in terms of fraud prevention and credit scoring. In both two instances, they are pretty much use cases which are ideal for AI, because we have, in the case of fraud prevention, millions of transactions every day and with a clear outcome, either fraud or not fraud. So with the right variables, we can build a very strong model that helps us predict and have really- ... best-in-class fraud prevention. And with that knowledge and given the experience we have been building on credits, we have also been building our credit scoring models, leveraging the AI. Makes a lot of sense, Osvaldo, and it seems like with the larger data lakes, faster processing speeds, more sophisticated LLMs, it just gets better. And then, Ariel, just to follow up, can you comment a little bit in terms of where you do have, you know, consumers choosing a delivery day, are you seeing, you know, materially improvements or materially improved densities and improvements in terms of average shipping costs, or is it still a little bit too early to discuss? Yeah. I think it is early to discuss. We are seeing some efficiencies in our operations, driven by the fact that we can consolidate shipment and take advantage of some of our idleness when we operate. I think scale or density in distribution, I believe it's too early. Again, I'm sorry for this, but not many details to be shared. I would say the variables are moving in the direction that we expect, but too early to share numbers behind that. Understood. Thank you very much. Thank you. Our next question comes from Marvin Fong with BTIG. Marvin, your line is open. Please go ahead. Good evening. Thanks for taking my questions, and congratulations on the, on the great quarter. I'd like to ask, maybe a two-part question on cross-border. So in Mexico, I think your, your shareholder letter cited you, you grew very strongly there, which is interesting because I think Temu, only recently, entered the country, is also seeing some strong adoption. So could you just kind of discuss, you know, how you see, the cross-border market in Mexico evolving? Is it that Temu's entry is actually growing the pie for everybody? And, the second part of the question is, you know, how might this, inform your strategy in Brazil? As I understand your, your cross-border, penetration or the mix relative to your GMV is very low, but that presents an opportunity for you. And then I have one other question. Thanks, Martín. So I'd say, before going into the details first and foremost, over the last 24 years, we've been always competing with players from all over the world. So in a sense, we are used to having new entrants trying to get a pie of Latin America. We've seen Temu get into Mexico in particular, in May, more or less. We've seen them making progress in app downloads and monthly active users. They seem to be spending a lot of money on marketing, on social media, directing consumers in trying to download their app. We are obviously monitoring that closely, but our data suggests that there is a bigger overlap between their business and the one with other cross-border platforms. Our business in the meantime continues to perform really well, as shown by the acceleration of items sold to 38%. Unit growth has been strong across the board, including categories where some of those players are focusing on and all ASP ranges. And our competitive advantages remain untouched, I would say, particularly logistics, which enables us to deliver fast shipping and payments, which allow us to provide attractive financing to our users. So in the end, our playbook remains the same. We continue strengthening our business with more sellers, more brands, more assortment, more financing, faster delivery, while we also continue investing in improving our own cross-border trade capabilities. Also through Meli+, we think, we are also now offering free shipping on lower ticket items, which was not the case in Mercado Libre up until two months ago. Moving into the second part of the question, which is Brazil, I think Remessa Conforme is still too new, so it's hard to say. We have applied to the program. We got accepted just a few weeks back, so not so much to share, but we remain confident, as I was saying, for Mexico, that the combination of fast deliveries, local payments and financing, a strong brand, buyer trust, will continue to differentiate Mercado Libre versus our other companies. Simultaneously, if the new regulation allows, so we will continue building capabilities as to be able to compete in cross-border in Brazil as we are doing it today in Mexico, in Chile, and Colombia. Mm-hmm. Terrific. And just, my follow-up, just bigger picture question. I think it was a very strong quarter in terms of, acquiring more, fintech active users. And I was just curious, you know, beyond what you wrote in the shareholder letter, could you elaborate on what's driving that? Was it, more internal initiatives, or do you think it was some, component just from, you know, the broader economy and whatnot? So just would love some color there. Thank you very much. ...So I think there are several factors contributing to that. One of those is our remunerated account, conta remunerada, both in Argentina and in Brazil, which is doing very well. What we pay our users depends on what the risk-free rate is in each of the countries. In Brazil, it's around 13%, in Mexico, around 10%, and in Argentina, given recent spike in inflation and interest rate, it has been close to 100%. So this gives users a huge incentive to move out of banks with savings accounts, which many times pay zero or only pay after 30 days and move their money into Mercado Pago. I think that has been part of the driver. Another part of the driver, I think, has been, as we were saying, the increase, the increased availability and offering of credits that we're giving. In that case, I would say it's mostly in the case of Brazil and in Mexico, not so in Argentina, where we have been cautious given this rate environment. Thank you very much. Appreciate your color. Our next question comes from Trevor Young with Barclays. Trevor, go ahead. Great, thanks. On the Meli+ subscription plans, is there any color that you can share on initial subscriber counts here in the first two or three months, excuse me. Is that ramping as you expected? And then second question, can you give us an update on where we are in terms of logistics monetization? Realize you've indicated it'll be gradual over a number of years, but just any update over the last few quarters would be helpful. Thank you. Thanks, Trevor, for your questions. Martín here. I think it's too early to tell, as Ari mentioned before, we launched this program a few months ago. We're seeing good engagement with the program as well as with the Meli Delivery Day, but it's too early to share numbers in terms of adoption. I think in the coming quarters, we'll be sharing more information. But we are excited about the program. Ari? Yeah, Trevor. So on monetizing shipping, I think our Q3 results and our year-to-date results show that we have been able to pull levers to offset some of the headwinds that we have in shipping from higher inflation rates in the logistics environment and higher fulfillment penetration. That has helped us keep our total net shipping cost over GMB broadly stable in 2023. I mean, we still think that we have plenty of opportunities to improve our net shipping costs by focusing on productivity, efficiency, scale benefits, et cetera. But we also want to incentivize more sellers to use our fulfillment solutions, particularly in Brazil. So in all, there is potential to monetize fulfillment, specifically in the future, if we decide to do so. But as we have always said, we are not in a rush to do that. We are always mindful of what monetization might imply for consumer prices and competition, and we are happy with the way we are managing our PNL, in general. That's helpful. Thank you both. Thank you. Our next question comes from Geoffrey Elliott, with Autonomous. Geoffrey, your line is open. Please go ahead. Hello, thanks very much for taking the question. I wanted to touch on the offline POS business in Brazil. It looks like FinTech services take rates were down a little bit. We saw that you rolled out some pricing there that is cheaper for the merchant, but clearly less beneficial for you, it looks, in terms of the MDRs that you're charging. And the publicly traded competitors, obviously the stock prices are a fraction of what they were a couple of years ago. Can you just remind us, how does that offline POS business fit with the rest of Meli? What is the synergy there? And then, you know, if you're thinking out five years, ten years, how is that going to fit in to the rest of what you're doing? Does it still really make sense for that business to be a focus, or is it something that could become smaller over time or maybe doesn't make sense to keep over time? Thank you. Hi, Jeffrey. We see the POS business, the in-store business, as a big part of our FinTech offering. We allow merchants to charge with Mercado Pago online, offline. Some are very small merchants, some are SMBs, and even some are larger merchants. And we have been able to provide this solution in a, I'd say, in a very profitable way, and we continue to do so. The profitability behind our POS business has been very good throughout the quarter. We have seen some have to make some changes as we move up market. Some of that is related to what we saw in terms of changing our go-to-market strategy. As we attract larger merchants, in some cases, what we do is we offer lower processing fees. But, on the other hand, it's better for the merchant because they get lower processing fees, as you said, but it's good for us, too, because what we see is higher activation rate and higher TPV per device. So not necessarily we're getting a lower margin in terms of margin on top of TPV, but we're getting a larger margin per device sold. And so- ... I think that, that this continues to be very good for us. I would say, I would add to that on, on the POS front, in this quarter, we have been changing, making some changes beyond pricing in terms of our go-to-market strategy, and we are very encouraged by the results we're seeing, again, in, in terms of, of activation and TPV per device. The synergy with the rest of the business, with this POS machine operation, where is that? So we are offering. I would say on two sides. On the one hand, there are many merchants. They sell online, they sell offline, they through to Mercado Libre, they sell through the POS. So there's a synergy there in having pretty much all of their sales coming through Mercado Pago to them. And on the other hand, many of these merchants, in some cases are individuals, and we are able to cross-sell different products to them and offering more banking products to them, basically. So we offer them. It's not only the device we're giving them and the process we're giving them. We're offering them a credit, or they invest in Cuenta Monedero. They—we have started to offer them a credit card to individuals based on the business they run. And so really it's part of our banking solution, and there are many products we're offering to them. There's a good synergy between all of the rest of the banking products we offer. Great. Thanks very much. Thank you, and our next question comes from Neha Agarwala with HSBC. Neha, your line is open. Please go ahead. Thank you so much, and congratulations on the strong quarter. Just two quick questions. First, on the 1P business, we talked earlier in the year about some acceleration, gradual acceleration in the 1P business. How is that going, and what is the vision going forward? And my second question is on the credit quality. There was a little bit of an uptick for the early delinquencies. Could you explain to us where is that coming from, despite some pickup in the loan growth? Maybe Mexico is not doing as well. So specifically to talk a little bit about the early delinquencies and about how the portfolio in Mexico is performing, that'd be very helpful. Thank you so much. Hey, Neha, this is Ariel. So 1P grew 58% year-over-year on a consolidated basis. If you were to look at this by country, Brazil actually grew considerably more than this. So the way we think about it is that 1P remains a strategic priority for us. We see this as a key lever to compete and gain market share in certain categories, consumer electronics being one of the clearest, probably, examples of that. We are very happy with the transformation of our 1P business over the last 12 months. We've had major improvements in our ability to manage pricing, promotions, stocks, with the help of technology. We have also seen significant improvements in the way we connect and relate with suppliers and the way we negotiate with them. We think that all these progress are structural gains that will put the business on strong footing for long-term growth and market share gains. So we remain optimistic and keep investing behind that business. Neha, with regards to NPLs in Mexico, let me split that in two. On the merchant side, NPLs have remained very flat, and the spreads are very healthy, so those are very good results. And we have been able to increase origination. And then on the consumer side, actually, they have increased a little bit, but by design, what happened is our spreads are very healthy, so we decided to take a little bit more risk and to increase the amount of origination, and that usually comes with slightly higher NPLs, but those have been priced in in the rates we are offering. So spreads continue to be super healthy in Mexico, and that was part of the strategy to grow faster. Even though NPLs may increase, it is priced in already. Perfect. If I can follow up on the 1P, could you give us some numbers regarding the penetration as percentage of GMV, where it was at the end of last year, where it is now currently, just to get an understanding of the pace of growth? Thank you so much. Yeah. So penetration keeps improving, increasing, particularly in Brazil. We're in the low or mid-single digits, around 3% or 4% penetration. Again, we are extremely happy with the progress that we've made so far and will keep investing in growing the business while we continue also improving our profitability, which has been the case this quarter. Stand by for our next question. It comes from João Soares with Citi. João, your line is open. Please go ahead. Thank you. Hey, everybody. I have two questions here. One, the first one, I just want to hear a little bit about Black Friday preparations. We've been hearing a lot of news that how excited the company is and maybe talk a little bit about any expectations in terms of the winning categories here, so any granularity in terms of expectations. And the second question is talking a little bit about the 1P, just to follow up on that. ... In regards to the profitability, how you talked about in the press release about improving profitability. So just wanted to hear a little about where we are right now and where you think we could be. I know the company doesn't guide, but any qualitative message on this would be appreciated. Thank you. Yeah. Thanks, João. It's Ariel. So Black Friday penetration keeps us busy for sure. We are extremely excited with the way our company has been performing, and we think and are expecting to have a great peak season. All of our teams, commercial, marketing, shipping, they are all preparing their work as to continue with the inertia that we had this quarter and this year and having a great event, both in Black Friday, Christmas, et cetera. We know this is a relevant moment for our consumers, and we want to be there to satisfy their needs. Regarding profitability, as I was mentioning before, we see very strong profitability improvements, particularly in Brazil. I think we are getting smarter in the way we buy, so having better negotiations, which give us better terms. We are getting better at managing inventory, so our days of stock are getting better and hence our working capital as well. We are getting also smarter in the way we price the items we sell, and we are also working a lot in taxation efficiency, which is key to compete in Brazil. So again, we are moving and pulling all the levers as to make this a strategic and profitable business for the company. We are yet not there, but we'll continue to be working in that direction. Perfect, Ariel. Thanks. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. Please stand by for our next question that comes from Deepak Mathivanan from Wolfe Research. Deepak, your line is open. Please go ahead. Great. Thank you so much. Hi, guys, couple questions. So first, can you give some additional color on the improved loyalty program? What are you seeing in the early days in terms of frequency, average spend, compared to a non-member from the program? I know it's in early stages, but any color there would be great. And then the second one, you know, the central bank interest rate is coming down in Brazil consistently. We just saw another cut today. Can you remind us the implications of this to your business on profitability? I guess, I mean, we can wait for the queue to see the financing revenues, but wondering if there is a way you can help us, the benefits to EBITDA from this dynamic, you know, in the last few months. Thanks so much. Hey, Deepak, Ariel here. So we don't disclose specific data on Meli+ yet, but I would say, on the one hand, our old loyalty program, L6, already generated an increase in frequency and GMV per buyer whenever they decided to subscribe to our program. We are seeing the same or an even better trend with the new subscribers who are joining our Meli+ program, and also with the existing subscribers who are getting used to the new benefits and the new value proposition of our program. So general terms, we are excited with the engagement that we see in the platform. Again, too early to be seen. Communication has just started. Our product keeps evolving, so we have many, many things to continue working on as to make customers even more aware of all the benefits and, and the way they can interact with that program. So excited, but, but I don't know. Hopefully, we'll, we'll be able to share more details in the next call. And with regards to interest rates coming down in Brazil, it tends to be good for, good for us, for, I would say, for, for several reasons. Mostly on the marketplace, where, where interest rates are lower, we tend to see more transactions on those transactions where we charge an interest rate. And then for what we offer as parcelers in euros, then the, the price tend to be, tends to be. The cost tends to be lower for us, so profitability improves. And then on the, on the fintech side, I would say, is it's also positive, but closer to neutral, because many times what happens is competitive pressures makes that we have to pass those savings to merchants. That has been the case when rates increase, and will probably be the case as rates decrease. So overall, it's positive for us. Okay, we have- Thank you so much. Our last question comes from William Tang with Susquehanna International. William, your line is open. Please go ahead. Hi, guys. Thanks so much for squeezing me in here at the last minute. I just wanted to quickly ask on credit. So last quarter, I think there were comments about expanding lending into mid-risk segments, no higher risk segments just yet. So just wanted to ask, you know, what were you seeing there? Were there any surprises or adjustments that you encountered? Thank you. Actually, that is exactly what we're doing. We have been increasing originations in Brazil, both on the consumer credit side and on the credit card side. On the consumer credit, probably what's happening is, to some degree, we are. Remember, up until a year ago, we were issuing more credit, but then we became more restrictive. So you don't yet see the this impact in terms of the total portfolio, but originations are up, and we are expanding, as you said, into the mid-risk segment. And also on the credit card front, we have been able to expand our offering, and that's why we are issuing more cards by also addressing this mid-risk segment and incorporating more information from third parties into our models. This concludes the question and answer session. I would like to turn it back now to Martín de los Santos, Chief Financial Officer for Mercado Libre. Thanks, everybody, for your questions. I'm looking forward to reporting back to you next year with our fourth quarter results. Good night. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.