MercadoLibre Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
MercadoLibre Inc's Q3 2025 earnings call highlighted strong revenue growth, strategic investments in free shipping and credit cards, and expansion in both commerce and fintech sectors, with a focus on long-term value creation and navigating macroeconomic challenges, particularly in Argentina.
Key Financial Results
Revenues grew by 39% year-on-year, marking the 27th consecutive quarter of growth above 30%.
Operating income of $724 million grew by 30% year-on-year.
Argentina's revenues grew by 39% year-on-year in US dollars and 97% in local currency.
Items sold in Argentina grew by 34%.
Business Segment Results
Mercado Pago had a stellar quarter with accelerated monthly active users growth and record high NPS in Brazil.
GMV growth accelerated in Mexico.
Argentina saw resilient growth in GMV, buyers, and TPV, though trends slowed due to macro challenges.
1P grew 71% year-over-year on an FX neutral basis.
Capital Allocation
Strategic investments were made in free shipping, logistics, 1P, and credit cards.
Investments in user acquisition through performance and affiliate channels, with the affiliate channel growing 4x year-on-year.
Continued investments in Argentina, including opening a second fulfillment center and launching a credit card.
Industry Trends and Dynamics
Offline to online retail shift in Latin America presents immense growth opportunities.
Intensely competitive market in Brazil due to its attractive demographics and e-commerce penetration below global standards.
Competitive Landscape
Brand preference scores reached new record highs across the region, aided by marketing investments and free shipping policies.
MercadoLibre's market share in e-commerce has tripled since 2014 and doubled since the pandemic.
Focus on providing the best value proposition to users, including speed, prices, and payment alternatives.
Macroeconomic Environment
Challenging macro backdrop in Argentina impacted growth and EBIT margin.
Macro instability related to midterm elections in Argentina led to a slowdown of growth and increased interest rates.
Growth Opportunities and Strategies
Continued investment to capture growth opportunities in commerce and fintech.
Focus on improving the value proposition for users and the platform.
Lowering the free shipping threshold in Brazil delivered strong results, accelerating GMV and items sold.
Expansion of Mercado Pago's ecosystem, including credit cards and remunerated account products.
Strategic partnership with Casas Bahia to enhance selection and competitive prices, particularly in the heavy and bulky items category.
Entering the B2B sector with a long-term vision.
Leveraging agentic AI to enhance discovery, service, and productivity, including the launch of a seller assistant and AI assistant for Mercado Pago users.
Financial Guidance and Outlook
Continued investment with discipline, focusing on the long-term potential and scale of the ecosystem.
Optimism for long-term growth prospects in Argentina, despite short-term volatility.
Expectation of unit shipping costs trending downwards over time through productivity and process improvements.
Confident in sustaining growth levels and long-term value creation, even with short-term margin pressure from strategic investments.
