MercadoLibre revenue surges 49% to $8.85B as Brazil, Mexico accelerate

MercadoLibre reported Q1 revenue of $8.85 billion, up 49% year over year and beating consensus by $522 million.

"This was our strongest growth rate since Q2 2022," CFO Martín de los Santos said.

Brazil revenue accelerated 55% with items sold up 56%, while Mexico grew 62%. Fintech revenue rose 51%, with the credit card portfolio more than doubling to $6.6 billion. Assets under management climbed 77% to nearly $20 billion. Operating cash flow more than doubled to $2.075 billion.

The stock has fallen 29% over the past year and trades at $1,763.36, or 34 times forward earnings. Analysts carry a consensus target of $2,208.62, implying 25% upside, with 20 buy ratings and zero sells.

Commerce and fintech drive the flywheel

Unique buyer growth in Brazil hit its fastest pace in five years, rising 32% year over year. Advertising revenue climbed 73%, and unit shipping costs in Brazil fell 17% in local currency. Mercado Pago now has 83 million monthly active users.

S&P upgraded MercadoLibre to investment grade (BBB-) in July 2025, giving its expanding fintech book cheaper access to capital. The company holds $3.68 billion in cash against an $83 billion market capitalization.

Margins compress as management invests

Operating margin contracted 600 basis points to 6.9%, and operating income fell 20%. Provisions for doubtful accounts doubled to $1.24 billion from $603 million a year earlier, as management extended average loan durations to eight months from five. Adjusted free cash flow turned negative to $56 million.

De los Santos said the margin compression was deliberate. "Margins are a consequence of our investment posture, and we can dial the investment intensity up or down," he said. The company is funding free shipping, first-party commerce, credit card issuance, and a fulfillment network that now spans more than 50 facilities handling 55% of shipments.

Insiders buy the dip

SVP Marcelo Melamud purchased $200,000 worth of shares at $1,604.62 on June 11, and Director Alejandro Aguzin bought 600 shares in May. Institutional ownership stands at 83%, with Brown Advisory, Russell Investments, and Capital Research adding positions.

The average Latin American shopper makes seven online purchases per year versus 41 in the US, and less than 20% of Mexicans have a credit card. MercadoLibre operates the payments, credit, and logistics infrastructure that will carry that catch-up.

The guidance raise signals management expects growth to sustain. Investors will watch the Q2 earnings call for updated margin targets and credit portfolio performance.

This article is for informational purposes only and does not constitute investment advice.