MercadoLibre Q3 Earnings Miss Estimates, Revenues Rise Y/Y

MercadoLibre MELI reported third-quarter 2025 earnings of $8.32 per share, which missed the Zacks Consensus Estimate by 11.77% but increased 6.26% year over year. Revenues rose 39.5% on a year-over-year basis (49% on an FX-neutral basis) to $7.41 billion. The top line surpassed the Zacks Consensus Estimate by 2.15%.

Total revenues were driven by robust growth across both commerce and fintech segments, which grew 33% and 49% year over year to $4.17 billion and $3.24 billion, respectively. In the commerce segment, strong momentum was evident, with Brazil and Mexico both posting 34% foreign exchange-neutral GMV growth and 42% items sold growth year over year. Argentina's commerce segment delivered exceptional GMV growth of 44% on a foreign exchange-neutral basis, while items sold increased 34% year over year.

Items sold grew 39.3% year over year to 635.2 million. Unique buyer growth was 26% year over year, with the number touching 76.8 million.

Fintech Monthly Active Users rose 29% year over year to 72.2 million. Engagement with Mercado Pago continued to strengthen, with Assets Under Management growing 89% year over year to $15.1 billion. The credit portfolio expanded 83.2% year over year to $11.02 billion, with total credit users surpassing 27 million.

Revenues from MELI's advertising services rose 56% year over year on a reported basis and 63% on a foreign exchange (FX)-neutral basis.

MELI’s shares have appreciated 35% on a year-to-date basis compared with the Internet-Commerce industry’s return of 12.1%.

MercadoLibre, Inc. Price, Consensus and EPS Surprise

MercadoLibre, Inc. price-consensus-eps-surprise-chart | MercadoLibre, Inc. Quote

MELI’s Q3 in Detail

Brazil: Net revenues in the third quarter reached $4.01 billion (54.1% of total revenues), up 37.6% year over year.

Mexico: The market generated revenues of $1.65 billion (22.3% of total revenues), which increased 44.2% year over year.

Argentina: Net revenues in the reported quarter were $1.44 billion (19.4% of total revenues), reflecting an increase of 39.5% year over year.

Other countries: The markets generated revenues of $308 million (4.2% of total revenues), representing growth of 39.4% on a year-over-year basis.

Key Metrics for MELI

Gross Merchandise Volume of $16.5 billion increased 28% year over year and 35% on a foreign exchange-neutral basis.

The number of successful items sold was 635.2 million, up 39% year over year, representing the highest growth rate since the first quarter of 2021.

Total Payment Volume rose 41% year over year and 54% on a foreign exchange-neutral basis to $71.2 billion. Acquiring Total Payment Volume, which includes payments processed outside the marketplace, grew 32% year over year to $47.7 billion.

Total payment transactions increased 37% year over year to 4 billion.

The credit portfolio reached $11.02 billion, growing 83.2% year over year. The portfolio composition consisted of 37.09% consumer lending, 43.58% credit card, 17.03% merchant lending and 2.3% asset-backed financing.

MercadoLibre’s Operating Details

In the third quarter, the gross margin contracted 260 basis points on a year-over-year basis to 43.3%.

Operating expenses were approximately $2.5 billion, which increased 32% year over year. As a percentage of revenues, the figure contracted 50 basis points year over year to 33.5% in the reported quarter.

The operating margin contracted 70 basis points from the year-ago period to 9.8%.

Net Interest Margin After Losses (NIMAL) declined 320 basis points year over year to 21%, primarily due to higher funding costs in Argentina. Asset quality remained stable with the 15-90 day non-performing loan ratio at 6.8%.

Balance Sheet of MELI

As of Sept. 30, 2025, cash and cash equivalents were $2.58 billion, down from $3.01 billion as of June 30, 2025.

Short-term investments were $3.72 billion as of Sept. 30, 2025. Net debt increased to $4.6 billion at the end of the quarter, reflecting additional funding for Mercado Pago operations.

MELI’s Zacks Rank & Stocks to Consider

Currently, MercadoLibre carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Retail-Wholesale sector are Fiverr International FVRR, Capri Holdings CPRI and First Watch Restaurant Group FWRG

While Fiverr International sports a Zacks Rank #1 (Strong Buy) at present, Capri Holdings and First Watch Restaurant Group carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Fiverr International have declined 28% year to date. It is slated to report third-quarter 2025 results on Nov. 5.

Shares of Capri Holdings have increased 1.4% year to date. It is set to report second-quarter fiscal 2026 results on Nov. 4.

Shares of First Watch Restaurant Group have declined 8.3% year to date. It is set to report third-quarter fiscal 2025 results on Nov. 4.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research