MercadoLibre (NASDAQ:MELI) was one of the stock market's standout performers in 2019, gaining 95% last year. While the e-commerce business continued to rack up impressive results, it took a back seat to the payments business, which is growing by leaps and bounds.

The company released its fourth-quarter results after the market close on Monday and investors saw the report as something of a mixed bag, initially driving the stock down as much as 6% in after-hours trading. Revenue grew to $674.3 million, up 57% year over year, but operating expenses jumped 83%, resulting in a net loss of $54 million, or a loss per share of $1.11, significantly higher than the $0.05 loss in the prior-year quarter. 

This is one time, however, that the top and bottom lines don't quite tell the tale. Here are three things investors should know. 

A blue key on a keyboard with a shopping cart emblem.

Image source: Getty Images.

Payments are driving this train

What began as a way to remove a customer pain point has become the principal driver of MercadoLibre's growth -- its Mercado Pago payment system. For the fourth quarter, total payment volume (TPV) grew to $8.7 billion, up 64% year over year in U.S. dollars (USD) and up an even more impressive 99% in local currencies. The number of payment transactions grew to 286 million, up 127% compared with the prior-year quarter.

Mercado Pago became so widely used by consumers that other merchants -- both on and off MercadoLibre's e-commerce platform -- began to adopt the payment method, and growth off the platform is now exceeding on-platform growth.

Those off-platform payments soared 121% year over year in USD, but up a whopping 176% in local currencies. The total value of off-platform payments now represents 54% of MercadoLibre's TPV. Mobile point-of-sales is one of the company's fastest-growing businesses, generating TPV that grew 126% in local currencies.

Operational metrics are booming

A number of key performance indicators show that MercadoLibre really is firing on all cylinders. Unique buyers on its e-commerce platform grew 27% year over year, accelerating from 26% growth in Q3. The number of listings on its marketplace climbed to 274 million, up 51%, while the number of items sold grew to 110 million, up 28%. The number of confirmed registered users grew 20% year over year to 321 million, and items shipped climbed to 93 million, up 49%.

What these metrics have in common is that they strip out the impact of exchange rates and show that MercadoLibre's e-commerce business continues to put up solid growth.

You have to spend money to make money

With all the solid top-line growth, why is MercadoLibre losing money? In a word: investment. The company announced earlier this year that it would be spending heavily to spur future growth. One such initiative was a massive advertising campaign designed to increase awareness about the company's payment services and its e-commerce platform.

In Q3, sales and marketing expenses grew 129% year over year to $253 million, an increase of $142 million, which took MercadoLibre into the red. Q4 was something of a repeat performance, as sales and marketing expenses grew to $269 million, up 92% compared with the prior-year quarter. MercadoLibre's management noted in its prepared remarks that the net loss of $54 million was "due primarily to the incremental investments in marketing." 

There is light at the end of the tunnel, however. Management said: "We believe we are investing appropriately behind the right growth initiatives. ... The sustained momentum we see gives us confidence to ... focus on driving cost efficiencies and scale benefits through to our [income statement]." In other words, MercadoLibre plans to scale back on its spending spree and begin to focus more on profits. That should soon put this growth stock back on an upward trajectory.