MercadoLibre Q4 2025 Earnings: Revenue Up, EPS Miss

MercadoLibre Inc. (MELI) reported net revenue of $8.76 billion to $8.8 billion and GAAP earnings per share (EPS) of $11.03 in a letter to shareholders on Feb. 24, 2026. The company said investments in free shipping, logistics, and credit expansion compressed margins.

Q4 Results and Margin Drivers

Operating income reached $889 million, producing a 10.1% operating margin compared with 13.5% a year earlier. Net income totaled $559 million, a 6.4% margin. Management attributed the margin compression to deliberate investments in free shipping, logistics, and credit expansion, which it estimated reduced the quarter’s operating margin by 5 to 6 percentage points. Excluding a $99 million one-time Brazilian tax credit, the margin would have been about 9.0%. The filing showed an EBIT margin trough of 9.8% in Q3 before a partial recovery in Q4. CFO Martin de los Santos said, "We ended 2025 with exceptional momentum," highlighting the company’s focus on scale and market share even as near-term profitability declined. The company did not provide formal 2026 forward guidance.

Commerce and Fintech Momentum

The commerce segment generated $5.0 billion in net revenue, up about 40% year over year in U.S. dollars, with gross merchandise volume (GMV) of $19.9 billion, a 37% increase. Unique active buyers rose 24% to 83 million, surpassing 80 million for the first time. Items sold climbed 43% to 752 million units, with roughly 75% delivered within 48 hours. Brazil and Mexico led growth with items sold up about 45% in each market, while Argentina rose 36%.

Fintech net revenue grew 51% to $3.8 billion, supported by about 78 million monthly active users, a 27% increase. Total payment volume reached $83.7 billion, up 42%. The credit portfolio expanded 90% to $12.5 billion, while the 15–90 day nonperforming loan rate fell to a historic low of 4.4%. Assets under management rose 78% to $18.8 billion, and total payment transactions reached about 4.5 billion.

In 2025, MercadoLibre opened 16 fulfillment centers, including its first in China in December. Its fulfillment network absorbed a 41% year-over-year increase in items sold, about 500 million additional units. Advertising revenue accelerated to 67% foreign-exchange-neutral growth in Q4, up from 63% in Q3. The Mercado Pago AI assistant, launched in October 2025, now resolves about 87% of user interactions.

Ariel Szarfsztejn, who became CEO on Jan. 1, 2026, is overseeing a strategy that prioritizes scale over near-term margin improvement. Management identified Brazil and Mexico as primary growth engines and plans to continue heavy investment rather than optimize margins immediately. The company framed the opportunity as long term, noting e-commerce penetration in Latin America remains near 15% of total retail spend, while the region’s retail-media market is projected to exceed $6 billion by 2029.