MercadoLibre (MELI -0.90%), the leading e-commerce and fintech platform in Latin America, released its financial results for the second quarter of fiscal 2025 on August 4, 2025. The most prominent news in the release was a strong revenue increase to $6.79 billion (GAAP) in Q2 2025, which beat the consensus GAAP estimate of $6.67 billion. Despite this revenue beat, earnings per share (GAAP) came in at $10.31, below the anticipated $11.93, and operating margin declined to 12.2%. The quarter showed continued gains in user growth and business volume, but also highlighted rising costs associated with strategic investments and competitive actions.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $10.31 | $11.93 | $10.48 | (1.6%) |
| Revenue (GAAP) | $6.79 billion | $6.67 billion | $5.07 billion | 33.9 % |
| Operating Margin | 12.2 % | 14.3 % | (2.1 pp) | |
| Adjusted EBITDA | $1.02 billion | $880 million | 15.9 % | |
| Adjusted Free Cash Flow | $454 million | N/A | 15.9 % |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
MercadoLibre operates one of the largest online commerce and financial technology ecosystems across Latin America. Its core marketplace brings together millions of buyers and sellers, while its fintech platform (Mercado Pago) offers digital payments, lending, and savings products. MercadoLibre also provides logistics through Mercado Envios, advertising with Mercado Ads, and a variety of value-added services.
Its recent focus has centered on deepening engagement through bundled services and investing heavily in logistics expansion, digital payments, and customer acquisition. Success relies on continued market leadership, service integration, and swift delivery in a region where logistics and access to financial services are significant barriers. Growing scale and network effects are key to maintaining its competitive advantage.
Quarterly Performance and Key Developments
MercadoLibre’s revenue (GAAP) grew 33.8% to $6.79 billion in Q2 2025, driven by continued expansion in both e-commerce and fintech. The company outpaced its GAAP revenue targets, reflecting strong customer activity, especially in Brazil, Argentina, and Mexico. Brazil remains its largest market, with 25% revenue growth in U.S. dollars and 35% in constant currency in Brazil, fueled by a strategic reduction of free shipping thresholds in June. This step helped items sold growth accelerate to 34% year over year in Brazil in June 2025, and reach 26% in Q2 2025.
Argentina delivered an even stronger performance. Revenue in Argentina surged 77% in U.S. dollars and 130% in constant currency, with items sold in Argentina up 46% and unique buyer count in Argentina rose over 30% year over year for a second straight quarter. This recovery reflects both stabilizing macro conditions and gains in fulfillment and financing services. In Mexico, revenue (GAAP) in Mexico rose 25% in U.S. dollars and 35% on an FX-neutral basis in Q2 2025, with notable fulfillment penetration above 75% in Mexico.
E-commerce, or the Commerce Segment, saw revenue climb 29% in U.S. dollar terms and 45% FX-neutral in Q2 2025. Improvements in shipping, technology (notably AI-based search and infinite scroll), and product assortment boosted engagement. First-party sales—where MercadoLibre sells inventory directly, instead of connecting third-party sellers—more than doubled year-over-year on an FX-neutral basis, helping the company achieve over $1 billion in first-party gross merchandise volume for the first time. Logistics continued to be a strength: 95% of items were delivered through its managed network, with fulfillment centers handled 57% of all shipments.
The Fintech segment, including Mercado Pago digital payments and credit offerings, remains a fast-growing part of the business. Segment revenue increased 40% in U.S. dollars and 63% FX-neutral, This exceeded the Commerce segment’s 29% U.S. dollar growth for the same period. Monthly active users reached 68 million, up 30% from the prior year. Its credit card portfolio jumped by 118% year-over-year to $4.0 billion, now representing 43% of the total credit book. Assets under management for savings and investments more than doubled to $13.8 billion. Net interest margins after losses (NIMAL), a measure of what MercadoLibre earns on loans after accounting for losses, stabilized at 23.0%, though down from 31.1% in Q2 2024 due to changes in product mix.
Payment acquiring—facilitating payments for third-party merchants—drove total payment volume up 31% in U.S. dollars and 53% FX-neutral. All key geographies reported market share gains. Advertising services also continued to accelerate, with revenue up 38% year-over-year (USD), and Display & Video segment revenues almost doubled year-over-year, helping raise overall ad penetration compared to the prior year.
Profit margins faced pressure in the period. Operating income rose to $825 million, but Operating margin (GAAP) retreated to 12.2%, down from 14.3% in Q2 2024. Margin contraction resulted from direct costs of expanding free shipping in Brazil and other countries, higher marketing spend aimed at customer acquisition, and a larger share of lower-margin first-party sales. Loss provisions related to rapid credit growth also climbed. Net income (GAAP) was $523 million with a 7.7% margin, affected by FX losses of $117 million following a devaluation in the Argentine peso, and by a higher effective tax rate.
MercadoLibre increased its adjusted EBITDA to $1.02 billion and generated $454 million in adjusted free cash flow. The company continued to invest heavily, with $287 million in capital expenditures. Net debt reached $3.83 billion, up from $2.25 billion as of December 31, 2024, as it ramped up funding for fintech and fulfillment capacity projects. Asset quality in the credit portfolio improved, with a 15–90 day non-performing loan (NPL) ratio of 6.7%.
Among non-operational highlights was an upgrade from S&P, which raised MercadoLibre to investment grade (BBB-) in July.
Product and Platform Advances
MercadoLibre deepened integration among its commerce and fintech services in the quarter. The company continued to expand its first-party assortment to close product gaps, launched artificial intelligence-powered search features, and integrated Google Ad Manager and AdMob for improved ad targeting. In fintech, it pushed digital banking in major markets, promoted high-yield savings products in Brazil, and Mercado Pago offered savings accounts with yields up to 120% of CDI (Brazil’s interbank rate). More than 1.5 million credit cards were issued.
The logistics network now includes over 30 fulfillment centers, with record same-day delivery volumes reached in Argentina. In advertising, the increased scale of offerings led to a near doubling of revenue in the display and video categories. This was supported by the extension of ad products to more sellers, enhanced campaign analytics, and automated creative tools. The expansion in payment volume for acquiring services underscored growing merchant adoption across all major markets.
Argentina showed marked increases in fulfillment, same-day delivery, and credit use. Mexico’s results featured fulfillment penetration exceeding 75% and rapid growth in buyers and items sold. Brazil led in overall business size, benefiting from expanded shipping offers and aggressive user engagement campaigns.
There was no dividend declaration or trend change reported, as MercadoLibre continues to prioritize reinvestment over payouts to shareholders.
Outlook and Looking Ahead
MercadoLibre’s management did not provide explicit quantitative guidance for the upcoming quarter or the full fiscal year. Leadership emphasized a continued focus on reinvesting for growth in logistics, fintech, and user acquisition, suggesting that operating margins may remain under pressure as competition intensifies and new investments scale. The timing of margin expansion, therefore, remains uncertain.
Investors and observers should monitor several themes in coming quarters: the pace of user and sales acceleration, developments in credit and asset quality within the fintech business, changes to margin trends as logistics and fintech costs mature, and the transition to new CEO Ariel Szarfsztejn, slated for January 2026. Management acknowledged potential challenges from new entrants and shifting market dynamics in Brazil, Mexico, and Argentina.
MELI does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
