MercadoLibre, Inc. (MELI) Earnings Call Transcript & Summary

Welcome to the MercadoLibre fireside chat at the Goldman Sachs Communacopia & Technology Conference. I'm pleased to welcome here CFO, Martin de los Santos, CFO of MercadoLibre. My name is Irma Sgarz. I cover the Latin America e-commerce and retail sector for Goldman Sachs. Martin, thanks for being here.

Thank you, Irma. Good morning, everybody.

Good morning. So Martin, thanks for being here again. I started with a similar question last year where I asked you about the unlock of the value of the ecosystem across FinTech and e-commerce. And when you look at the progress that you've made in the year-to-date, it feels like there's been some really important initiatives. Can you talk a little bit about the initiatives between Pago and the marketplace and the results you've driven so far?

Yes, definitely. As we've been saying for many years, one of the most important competitive advantage that we have is the fact that we run the largest e-commerce platform in Latin America. And also, we have a very large FinTech ecosystem. Just to give you a sense of the size on the marketplace, last year, we had more than 110 million unique buyers throughout the region. We processed volume of products sold on MercadoLibre by more than $56 billion, more than 2 billion items sold last year. And all those metrics growing very rapidly. Users growing at 25%, GMV growing at 30% plus in the different countries. On the other side, we have the FinTech platform, where we have 68 million monthly active users. We have a credit book of $9.4 billion, that is also growing very rapidly, doubling year-on-year. We processed payments worth $230 billion in the last 12 months. So a very large 2-sided ecosystem. And the important thing is that there are big synergies among each other, and we continue to develop those, and that continues working very nicely for us. So let me give you some examples that we implemented the last year, as you asked. If you take the credit card in Brazil, we issued 1.3 million credit cards last quarter only. Most of those now come from the marketplace. So these are people who are using or buying on MercadoLibre for many years. We know them very well. We understand them from a credit perspective. And we also integrated the flow of acquisition for the credit card in the buying flow of MercadoLibre. So if you are navigating and you see a product and you are a user that we have a preapproved credit card, you can actually buy that particular product with a credit card at the same time that you're asking for the credit card, and then we ship the credit card in a couple of days. So that increases the conversion, increases the activation of the credit card and also has no cost for Mercado Pago. So that's the way in which MercadoLibre is helping Mercado Pago push a very important product like the credit card in Brazil. Another example is in Mexico, it's the other way around. In Mexico, as you know, the credit card penetration is very low, it's less than 20%. So buying online without a credit card is a very bad user experience. So we have to develop our own payment methods within Mercado Pago. So you can have money on your account, and you can use the funds that you have in your account to pay for a transaction on MercadoLibre. You can pay with a buy now, pay later that we developed at Mercado Pago or you can pay with a credit card that we launched in Mexico 3 years ago. If you take those 3 payment methods together, today, 20% -- 30% of the transactions in the marketplace in Mexico are paid using our own payment methods. So those are transactions that might have not happened if we didn't have the payment methods from Mercado Pago. So Mercado Pago is actually helping the transactions happening on MercadoLibre. And the final example, we mentioned this a couple of -- last year that we upgraded, that we improved our loyalty program. Our loyalty program traditionally has been based on content and free shipping. And about a year ago, we also introduced benefits tied to the FinTech ecosystem. So if you are a loyalty member today, in addition to the free shipping and content, you also get better remuneration on your deposits, you get extra free installments on your purchases with your credit card, you get cash back on anything you buy using Marcado Pago. So that's the way we can tie both sides of the ecosystem and the loyalty program, that creates a loyalty program that is very unique. It's very hard for somebody to replicate because they don't have the 2 sides of it. And like that, there are many, many other areas where we are collaborating with each other. In fact, I used to run the credit business, which was very much operating in both sides of the ecosystem and leverage both sides of the ecosystem. So, it is very important for us that we continue to expand that and take advantage of that opportunity as a competitive advantage.

Great. Of course, the changes to the shipping policies in Brazil, I'd be remiss not to ask, have been top of mind in many investor conversations. Can you talk a little bit about how that's driven changes in user behavior? And also, of course, the balance between the benefits on the one hand side and the costs associated with implementing this new lower free shipping threshold?

Yes. This quarter, you probably heard that we took a very important strategic decision, which is to lower the free shipping threshold in Brazil from BRL 79 to BRL 19. If you step back a little bit, you might remember, we started offering free shipping in Brazil back in 2017. Back then, the threshold was BRL 120. And since then, we lowered the threshold 3 times, the latest one being this one. So this is not something new. We have been doing this over the years. And every time we lower the free shipping threshold, we've seen an acceleration in growth of GMV, TPV, more frequency of purchase, number of new users coming online. Remember, we're operating in a region that penetration of online commerce is very, very low. So still, we play an important role on bringing people online by eliminating frictions of online transactions. And one of the most important friction points is the shipping costs. So we have proven over time that lowering the free shipping threshold has been a very good tool for us to accelerate growth. And you can see it in the numbers. If you take longer-term view over the past 5 years since we have been doing these and other things, obviously, we doubled our market share in Brazil. Only in the last year, we increased 4 percentage points of market share. Our growth continues to be significantly larger than the market. So we're very excited about what we're doing and we have been doing it in the past. We think it's the right way to go. And we have seen already the acceleration. Remember, we implemented this in the end -- at the end of last quarter in June. So during the quarter, you can see the growth of items in Brazil was 26% for the full quarter. But if you were to look only at June, which is the month in which we implemented, it accelerated to 34%. So you have single partial -- the partial effect of the lowering of the free shipping threshold. We will see that in full in Q3. On the other hand, it does require investment. I mean as many things that we do, we are investing and we are not hesitating to invest if we believe this is the right way to go to make sure that we capture the growth opportunity. So again, that puts some short-term margin pressure. You've seen it in Q2, but also partially one month. In Q3, the full amount will come in. And then eventually, over time, through more volume and through optimizations of the slow shipping method, we should be able to compensate that. But we are confident like in the past, this is the right way to go to make sure that we capture the growth opportunity that we see in e-commerce in Brazil and then in other markets as well.

Great. And from an operational standpoint, so far, you've optimized your shipping network mostly towards speed of delivery, right? And now you've -- with the launch of Meli Más or the relaunch of Meli Más 2 years ago, you introduced a layer of slower shipping. So you already have some experience with that. But obviously, there's more to come from what I understand. Can you just catch us up on where you are in the process of recalibrating your shipping network? And maybe what the early learnings have been in this process?

So to recap, right, it's correct. For the past 10 years, since we built our own logistic infrastructure, we have always been focused on fast shipping. Today, more than 75% of the items sold on MercadoLibre are delivered within 2 days in Latin America, which is something that would have been unthinkable 10 years ago. But more recently, and you mentioned it correctly, in the MELI Delivery Day, we started to have a share of our volume being delivered in slow format. Now with the lowering of the threshold, maybe I should clarify this, the threshold, we lowered it from BRL 79 to BRL 19, so if you buy something within that range, you get it for free, but slow. Slow meaning that instead of getting within the next 2 days, you might get it in 4 days, right? And you have the optionality to pay for fast to arrive. So as we scale that and we have a larger share of our volume in slow, we should be able to optimize the cost of slow deliveries. Today, it's very early, right? We are using the same network and the same optimized network for fast. So we're not getting the benefits of slow. In the future, as this continues to scale, and as we develop this low shipping method, we should be able to capture efficiencies that will enable us to lower costs. So let me give you a couple of examples. If you were to go to one of our warehouse facilities on Monday, you will see that it's at full capacity because we are delivering products that were sold on Monday -- on Saturday and Sunday, and we're going to wait because we need to deliver same day or next day, right? But if you go on Thursday or Friday, the capacity is below that level. So now when we have a stack of products that are waiting to be delivered and slow, you can plug it into the system on Friday, and you can optimize that capacity. The same thing with the truck. If you have a truck going from Sao Paulo to Rio, and it needs to deliver the product the next day, it has to leave at 7:00 p.m. even if it's at 75% capacity. Whereas if you have other products that you can fill, you can optimize that long-haul truck. So those are 2 basic examples. It sounds very easy to do, but it's very complex in terms of -- it requires a lot of coding, it requires a lot of changes on our logistic infrastructure and way of working, and it takes time. But again, we're just getting started, but there's a big opportunity that we should be able to continue to optimize the cost of delivery, taking advantage of the slow shipping method.

Understood. Now competition in Brazil e-commerce, also another topic that remains top of mind. And I do get a lot of questions from investors whether the recent moves were more defensive, or more front-footed in their nature. So I just want to ask you, has it become more competitive in e-commerce in Brazil? And how is MercadoLibre differentiating its value proposition within that?

Brazil is a very attractive market, right? It's a 200 million people market with a very low penetration of e-commerce. So big prospects for growth. So that obviously generates a lot of competition by definition, right? I think Brazil is probably one of the most competitive markets in the world today in e-commerce. For many years, we competed with the local retailers, then the Americans, more recently the Asians. So there's a lot of competition. It has always been like that. And even in the middle of that competition, as I mentioned earlier, we continue to gain market share. We continue to deliver very high growth. We grew 30% GMV. We're growing also on the FinTech side. So it's a very competitive market, but we are defending that position from a position of strength. I mean, like I mentioned, the lowering of the free shipping threshold was something that we have done in the past, and we're doing it today because we continue to gain efficiencies on the cost of shipping. So I think we sustain our competitive position by leveraging the ecosystem, the large logistic infrastructure that we have built, which is unparalleled. We have more than 15 warehouses throughout Brazil, more than 50% of the products that are delivered come from our own warehouses, so we control the whole delivery process. We have the payment infrastructure that I mentioned before as well. And then we have 16,000 developers that continue to work every single day to improve the user experience, vertical by vertical, bringing more supply, improving the user experience. We have the trust of the people and the trust of the brands that sell through MercadoLibre. We have the buyer protection program. So it's not one single bullet that explains why we have been successful in a very competitive market. It's the fact that we're executing at a very high level in a lot of fronts. And again, the opportunity is enormous really. So we're very excited about Brazil, even though it's very competitive.

Exciting. Marketing investments since last quarter were up quite notably. And of course, some of these were associated to one-off campaigns for promoting MercadoLibre and Mercado Pago in Brazil and of course, also communicating the lower free shipping threshold in Brazil. But sort of the baseline around social spend on social media and paid traffic was also up, and I think you signaled it might stay a little bit higher. Can you talk to us about what's driven the change in how the team thinks about spending on these channels and on acquiring users through these channels?

Yes, if you take a longer view on a broader picture, it's not a significant change. I mean the spending on marketing is in the range between 11% and 12%, has been fluctuating. It's in an upper level of a band last quarter. I would point out to a couple of things. Obviously, there were some branding campaigns that we did in Brazil, specifically, one for Mercado Pago that we are -- we had Anitta, which is a famous singer in Brazil. If you know the region, you'd probably know her, that she's promoting our Mercado Pago Digital Bank. So we have had a very successful campaign with her. We have seen a number of credit cards that I mentioned before, part of that was because of Anitta. So we're very excited, but that requires some investment. Also, the lowering of the free shipping threshold, we invested on a campaign with Neymar and Ronaldo. I'm sure you probably know those guys, too. So that was a very successful campaign as well. And we've seen the brands of MercadoLibre and Mercado Pago at all-time high in terms of brand health. So we are very excited about that, but that requires some investment in this particular quarter, and will stay for the following quarters as well. Then on acquiring users on TAM, we leaned a little bit more on social commerce. We are investing more behind the content providers and influencers channels that promote our products. We have seen an improvement on the return on investments on that channel. So we are investing a little bit more. We also leaned a little bit more on acquiring users through TikTok this quarter. If you look at the share of traffic and GMV that comes from TikTok, it doubled year-on-year, and this is because we have a much better integration with them, the technology integration that enables us to be more efficient in the way we invest in TikTok in particular. And then the philosophy of our marketing team is we have very accurate models that -- to predict the return on investment on the incremental dollar that we invest on customer acquisitions. So as long as we find users that are positive to the -- on a variable basis, we will continue to invest. So this particular quarter, we were a little bit more aggressive. And you can see the results, right? Users growing by 25% on the marketplace year-on-year, we had more than -- about 7 million new users on MercadoLibre this past quarter. Think about after 25 years of history in Latin America, we still have 7 million people who came for the first time to MercadoLibre, part of that comes with that investment. So there was a pickup in investment, but we are very cautious and very disciplined in the way we invest in marketing to make sure that it increases the -- it increases the user base in a profitable way.

Great. Now I ask version of this question probably every year in this fireside chat, but I need to ask about sort of the balance between growth and margins. One of the questions we're getting, and I'm sure you're getting at the moment is, are you in an investment cycle? And how do you -- how should -- how would you encourage investors to think about whether it's more percentage margin or ultimately EBIT dollar growth?

Yes. First to clarify, Irma, when we talk about investment cycle, people tend to think about what happened back in 2017. At that time, we were at a really strong investment cycle when we're starting to build our logistic infrastructure. It's not like that right now. What we have been saying for the past 2 years consistently is that we have ahead of us a very large growth opportunity, both on commerce, FinTech, advertising, all of the businesses that we operate. So the first thing is we do not want to miss those opportunities. So we have to invest behind them, we will, and we will not shy away from investing even though it might put some short-term margin pressure. We are not optimizing for short-term margin. We're trying to optimize for long-term value creation. So if you look at last year as an example, 2024, we compressed margin by 2 points because we were investing on the credit card in Brazil and Mexico, which is a critical product for the value proposition of Mercado Pago to get principality. And we're also investing on our logistic infrastructure, which is a critical product to deliver the 30% growth on GMV or the 34% growth of revenues that we delivered in Q4. So I think the philosophy continues to be the same. If we find the right investment opportunity, we will do it to make sure that we capture the growth opportunity. If you look at the past 10 years, we have been very disciplined in the way we manage investments. So we are very disciplined in the way we manage it, but we do not hesitate to invest even if it puts pressure on margin in the short term.

Understood. And just over pivoting a little bit to MELI adds, at just over 2% penetration of GMV, this remains a huge opportunity. You recently integrated your tech stack with Google Ad Manager, which allows you to move closer, more closely to a full funnel solution that you can offer to brands and advertisers on your platform showing also inventory that is beyond your platform, correct? Now when you -- maybe tell us a little bit about how that is changing your conversations with the brands and sellers and some early results that you've seen from this?

Yes, we've had about a little more than $1 billion business in advertising, growing very rapidly, growing 38% year-on-year last quarter. But for the past 3 years, has been growing above that, too. But if you look at that revenue, most of it, more than 80% of that comes from search advertising. So those are our merchants promoting their products within MercadoLibre, which is obvious, we are a retail platform. So that's -- the balance of that, the rest is branding and video and display that is growing very fast. It's growing 100% year-on-year in the last quarter, but from a very slow base, okay? And for us to grow that branding advertising, we need to fix some things in our platform. The first thing is that we realize that advertisers for branding, they require reach and frequency. So we were not giving them that within MercadoLibre and Mercado Pago. So we needed to expand the boundaries outside of our ecosystem. So last year, we reached an agreement with Disney, so we are placing advertisement on their digital platform. And as you mentioned, we just announced an agreement with Google for the Google Manager -- Google Ad Manager that enables us to also expand the footprint of our branding ecosystem. So now we have the pieces in place. We think we have a bigger reach and we plan to do other deals as well. And we also have the first-party data, which is very, very important for advertisers for branding advertising because it enables us -- enables our advertisers to do very sophisticated targeting to our users to more than 100 million users that we have in the marketplace and the millions that we have on Mercado Pago. The challenge now is to convince and to continue to work with the brands and with agencies to bring their advertising to their branding budgets to MercadoLibre. And that takes time. I mean I remember back in the days when we were trying to convince the brands, the large international brands to come to MercadoLibre for many years, the Nikes and the Adidas of this world, would say they will never sell on MercadoLibre, and now we have all of them mainly even the luxury brands are selling on MercadoLibre. So it takes time. When we build the fulfillment infrastructure also, it took a long time to complete and to increase penetration, but then we proved to the users that we were -- it was better to bring their inventory with us and that picked up. And today, we have north of 75% penetration of fulfillment in Mexico, for instance. So I think this is going to be the same case. It takes time. We need to continue to execute to work with the brands, work with the agencies, but it's definitely a huge opportunity going forward. When you look at the number of users that we have throughout the regions, the first-party data that we have, and if we expand the footprint, I think branding should be a much larger share of advertising than it is today.

Very powerful, but it's naturally a gradual progression, if you see.

Exactly. I mean like many things that we do at MELI, they don't come easy. They will take time. We should not cut corners. We need to execute and eventually it will come.

Great. Let's switch gears and talk a little bit about FinTech. The credit card in Brazil continues to grow very well. I think more than half of the cohorts are now actually 9-month profitable or positive. And can you talk a little bit about type of customer you're attracting with your card in Brazil specifically, given that this is a market where credit cards are a bit more penetrated than in Mexico specifically, but also Argentina?

Yes. [indiscernible] the credit card portfolio is growing very rapidly. The consolidated portfolio, Mexico and Brazil is growing at 91% year-on-year, but most of that comes from Brazil. And we are very excited because we are seeing the malls performing better, collections are performing better. We have the -- last quarter, we had the all-time low in terms of NPLs at the better run rates ever in credit cards. And as you mentioned, more than half of the portfolio -- credit card portfolio is already NIMAL positive. So all the signals are pointing in the right direction. We are acquiring users, obviously very much tied to the ecosystem because of what I mentioned before, we are capturing them in the marketplace. We tie it with the loyalty program that provides benefits to credit card users related to marketplace as well as the Mercado Pago platform. And also, we are seeing -- we continue to see that when somebody picks up the credit card, they become more engaged with the ecosystem. They tend to buy more on MercadoLibre, they become more principal users of Mercado Pago, which is a critical metric that we follow. So we are very, very excited about the -- what we're doing with the credit card, not only for the credit card itself, but because of the side benefits that it brings to the ecosystem. And the same thing, Mexico is a little bit behind because we launched the Mexico credit card 2 years later than Brazil, but still we're seeing good signals and good acceleration in Mexico as well, and we are waiting for Argentina that we announced that this quarter, we're going to be -- we are launching the credit card in Argentina.

Yes. So I did want to ask you about the credit card in Argentina as well. Can you talk a little bit about how that could perhaps be different from Brazil and Mexico? Could we see a faster ramp up there?

Yes. We are very, very excited about the credit card in Argentina. Think about Argentina as a country where most about adult people already use Mercado Pago. If you were -- if you went to Argentina, you will realize that every single store on the street uses Mercado Pago, everybody gets their salary on their bank, but they bring the money right away to Marcado Pago because we remunerate deposits in a more appropriate way than the banks. Our credit book in Argentina tripled year-on-year last year. Asset under management more than doubled in Argentina. So all the -- the FinTech value prop in Argentina is really, really incredible and it's working very, very nicely. The last piece of the puzzle that we needed is a credit card. So we are very excited about the fact that we are launching the credit card in Argentina. And in terms if you compare it to Brazil and Mexico, first, we have the advantage of having 5 years of experience. We have a much better product today in Argentina that we had 5 years ago when we launched it in Brazil. We have much better models that are a lot more experienced, but better collections. So the value prop is a lot better in Argentina. The other thing is because in Argentina, everybody uses Mercado Pago and MercadoLibre, we have a larger TAM of people that we can choose from to offer the credit card, so we can reach higher net -- higher income levels of the population in Argentina than we reach in Brazil and Mexico. So we think that in Argentina, we expect the credit book to be profitable in a faster way, in a faster pace than Mexico and Brazil. Obviously, we require investments upfront as all the credit card books, but we are very excited. We think that the profit -- the profitability of the book will be faster because of the reasons that I mentioned before.

That's exciting. How should we be thinking about your 1P offering? We've seen nice acceleration growth in Brazil there. What are some of the categories that you're leaning into and what you're looking to accomplish with the 1P offering?

Yes. If you step back, again, just recap the strategy of 1P. We are mainly a 3P platform, right? More than 90% of the volume that is transacted on MercadoLibre is done by our SMB, some brands and so on, it's third-party merchants, and we don't want to compete with our 3P merchants, right? But we did find over the years that there were certain categories where the product offering or the price competitiveness was not there. Consumer electronics is a good example. For many years, we were under-indexed in terms of the share that we have in consumer electronics. So we had to lean in with our own offering, 1P offering in consumer electronics. And today, we are at par with other categories. When you look at that category, in particular, which is the older one in 1P, we -- it require investment upfront, but over time, as we scale, as we improve the negotiations with suppliers, as we implement the technology and better management, we have been improving the economics of that particular vertical. But there are other categories that we're leaning into right now, as you mentioned, right? Heavy and bulk is one area where we are doing 1P. We realized that some of the local merchants have a bigger share than us. So we need to get involved in that in white goods. So we are scaling that and that requires investment. Supermarket is an area also, we do CPG. We don't do fresh. But CPG, when you do CPG from third party, it's not that efficient as a 3P category. So we are doing 1P, that also requires investment, but also brings more advertisement on CPG. So overall, when you look at our 1P strategy is to complement the 3P offering on certain categories, it has been growing very nicely. It surpassed the $1 billion for the first time last quarter. But again, it's a complement. We don't want to compete with our merch -- with our 3P merchants, and we will, for the most part, continue to be a 3P marketplace.

Right. And the B2B initiatives that you launched recently or you actually -- you had it already in a couple of countries, you brought it to Brazil and in the name of MELI Negócios. And can you talk a little bit about what you're seeking to accomplish or what you're offering that's different from your usual marketplace?

We announced this, I think, a couple of weeks ago, the launch of the B2B initiative in Brazil, but we already have it in Mexico and Argentina. When you look at MercadoLibre, a lot of companies, particularly SMBs are buying on MercadoLibre. It's a very large segment of the market. But they buy the same way as you and I buy, right? And so we need to customize the user experience more targeted to SMBs, to businesses. They have -- they need a particular type of invoices. They might need different users so they can -- many people can buy in the name of the company, as opposed to just one person. We have to give them the ability to buy in bulk at a discount price. So we are adjusting the user experience to increase the volume of transaction that is already happening, but we think the potential is much larger. When companies buy on a marketplace like MELI, they tend to buy more volume with more frequency with less fewer returns. So it's a big opportunity for us. And we think that by customizing the user experience, just like we do with any vertical where we operate, we should be able to increase that category. So that's what we announced recently in Brazil.

I would imagine a large part of that market is still offline?

Exactly, exactly. I mean, there's lower penetration of online. We think we can do a lot more bringing it online, correct?

Right. And when we look at Mexico, you had a softer start to the year in terms of GMV growth, but then accelerated quite notably into the second quarter. And this comes at a time where a lot of investors are debating the macro softening incrementally in Mexico. So it looks like you're doing something different from that's really defying the macro softness in Mexico. So talk to us a little bit about what to expect there and what you've done?

Yes. Just to be honest, we think that it's a lot more important the things that we do within our ecosystem, the macro. I mean, if you have a good macro, you might grow at 30%. If you have a bad macro, you grow at 28%. But the main thing is that we continue to improve the user experience, bring more assortment, continue to expand the ecosystem and also bring more people online, eliminate frictions to people to come online. Specifically, Mexico, as you said, we had in Q1, 23% year-on-year growth, which was a disappointment for us, even though it was much larger than the market and we were gaining market share. So we needed to fix certain things. We mentioned in the consumer electronics segment, we need to fix certain things the way we are negotiating with suppliers and a couple of other things. We did that, and we grew at 32% year-on-year in Q2. So we accelerated growth. One other thing to point out is 1P. Obviously, 1P and particularly in consumer electronics, grew at a fast pace in Mexico and helped that growth. And then CBT. We have a cross-border business into Latin America, but most of that comes into Mexico. And we see -- we made some changes in the way sellers, in particular, sellers from China, the way they interact with the platform that enabled us to grow and accelerate that volume of CBT. So that's helping also the Mexican marketplace.

Great. And I'd be remiss not to ask about AI, given how much of a focus that is here at the conference. You've talked about it a little bit on past conference calls and some use cases, but perhaps Agentic AI, I think, is very early days for you, but maybe talk a little bit about your approach towards and some of the efficiency unlocks that you've been seeing?

The question we get in all the meetings, right? I think we have been using AI for many years at MELI, fraud prevention, search algorithm, the credit business that we run -- that run for several years was based on the AI models that were very accurate of predicting default rates. More recently, we are starting to -- we have been starting to use LLM models. And I will break it down in 2, right, for cost saving initiatives and consumer-facing initiatives that are helping us with growth. For cost savings, there are many, many -- nothing really radical, but a lot of examples in different areas where we operate in legal, customer service is a good example, right? We had -- about 3 years ago, we have 10,000 customer service representatives, both internal and external. Today, we have 7,000, and we had -- our business multiplied by 3x over that period of time in terms of the number of interactions that we have with users. So we are providing a better user experience, taking care of more cases with fewer people because more than 50% of the interactions are done by the models, right, and in a very accurate way. So that's one example of the many things that we're doing in finance, in legal. They're helping us with lowering cost. The developers, we have 18,000 developers that are leveraging AI models to help them code faster and more efficiently, that's helping. Consumer facing, a lot of examples in terms of how we interact with our users, how we summarize products, how we overuse products, how we answer questions from our users that are posed to our merchants. We can answer those automatically now. In the past, we have to wait until the merchant actually answer the question and that affected conversion. So there are many different things that we're doing consumer facing. In advertising, we are helping our advertisers create content using AI. They can do -- through A/B testing, they can do A/B testing with 50 different videos or images. So a lot of different areas where we're applying AI. And then more on a platform basis, we have -- we're putting a lot of thought in terms of Agentic AI, trying to build the agents that will help people interact with FinTech and commerce platform. I think there's more questions than answer on that front yet, but we have a lot of smart people thinking the way to do that. And we probably in the next quarters, we'll have more to say about that.

Great. Thank you so much, Martin. Thank you very much for tuning in and listening to this session. Thank you.

Thank you, everybody.