MercadoLibre's Q4 Earnings Miss Estimates, Revenues Rise Y/Y

MercadoLibre MELI reported fourth-quarter 2025 earnings of $11.03 per share, which missed the Zacks Consensus Estimate by 6.29% and declined 12.53% year over year. Revenues rose 44.55% on a year-over-year basis (47% on an FX-neutral basis) to $8.76 billion. The top line surpassed the Zacks Consensus Estimate by 2.86%.

Total revenues were driven by continued strength across commerce and fintech segments, which grew 40% and 51% year over year to $4.98 billion and $3.78 billion, respectively. In the commerce segment, Brazil and Mexico each delivered foreign exchange-neutral GMV growth of 35% year over year, while Argentina posted foreign exchange-neutral GMV growth of 42% year over year. 
Items sold grew 43.1% year over year to 751.8 million. Unique buyer growth was 23.6% year over year, with the number reaching 83.2 million.

Fintech Monthly Active Users rose 27.3% year over year to 77.9 million. Engagement with Mercado Pago continued to strengthen, with Assets Under Management growing 78% year over year to $18.81 billion. The credit portfolio expanded 90% year over year to $12.5 billion.

Revenues from MELI's advertising services rose 70% year over year on a reported basis and 67% on a foreign exchange-neutral basis.

MercadoLibre, Inc. Price, Consensus and EPS Surprise

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

MELI’s Q4 in Detail

Brazil: Net revenues in the fourth quarter reached $4.64 billion (52.9% of total revenues), up 47.9% year over year. 

Mexico: The market generated revenues of $2.10 billion (23.9% of total revenues), which increased 55.6% year over year. 

Argentina: Net revenues in the reported quarter were $1.61 billion (18.4% of total revenues), reflecting an increase of 23.3% year over year. 

Other countries: The markets generated revenues of $414 million (4.7% of total revenues), representing growth of 53.9% on a year-over-year basis.

Key Metrics for MELI

Gross Merchandise Volume of $19.9 billion increased 37% year over year and 36.5% on a foreign exchange-neutral basis. 

The number of successful items sold was 751.8 million, up 43.1% year over year. 

Total Payment Volume rose 42.1% year over year and 52.6% on a foreign exchange-neutral basis to $83.7 billion. Acquiring Total Payment Volume grew 33% year over year to $55.7 billion.

Total payment transactions increased 35.5% year over year to 4.51 billion. 

The credit portfolio reached $12.5 billion, growing 90% year over year. The portfolio composition consisted of 36% consumer lending, 45% credit card, 16% merchant lending and 2% asset-backed financing.

MercadoLibre’s Operating Details

In the fourth quarter, the gross margin contracted 220 basis points on a year-over-year basis to 43.2%.

Total operating expenses were approximately $2.9 billion, which increased 50.1% year over year. 
The operating margin contracted 340 basis points from the year-ago period to 10.1%. It is worth noting that income from operations of $889 million includes $99 million of one-off tax credits in Brazil booked mostly within cost of net revenues; excluding these credits, the operating margin was approximately 9%. 

Net Interest Margin After Losses improved sequentially to 23.3%, up from 21% in the third quarter of 2025, driven by higher spreads in consumer and merchant loan portfolios. The 15-90 day non-performing loan ratio edged up to 7.6% from 6.8% in the prior quarter.

Balance Sheet of MELI

As of Dec. 31, 2025, cash and cash equivalents were $3.67 billion, up from $3.01 billion as of Sept. 30, 2025. 

Short-term investments were $2.63 billion as of Dec. 31, 2025, compared to $3.72 billion as of Sept. 30, 2025. Net debt increased to $4.68 billion at the end of the quarter compared to $4.61 billion as of Sept. 30, 2025, reflecting continued funding for Mercado Pago operations and credit portfolio expansion.

MELI’s Zacks Rank & Stocks to Consider

Currently, MercadoLibre carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Retail-Wholesale sector are Etsy ETSY, FIGS  FIGS and Five Below FIVE.

Etsy, FIGS and Five Below each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Etsy’s shares have declined 5.1% in the past six months. The Zacks Consensus Estimate for Etsy’s EPS for the upcoming quarter is pegged at 75 cents, indicating a year-over-year increase of 63.04%.

FIGS’ shares have surged 58.6% in the past six months. The Zacks Consensus Estimate for FIGS’ EPS for the upcoming quarter is pegged at 2 cents, indicating a year-over-year increase of 100%.

Five Below’s shares have surged 57.6% in the past six months. The Zacks Consensus Estimate for Five Below’s EPS for the upcoming quarter is pegged at $3.98, indicating a year-over-year increase of 14.37%.

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

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