MELI — MercadoLibre, Inc.

Summary of MercadoLibre Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue Growth: MercadoLibre reported a 39% year-on-year revenue increase, marking the 27th consecutive quarter of growth above 30%.
• Operating Income: Operating income reached USD 724 million, growing 30% year-on-year.
• Active Users: The platform added 7.8 million new active buyers, bringing the total to 75 million.
• Shipping Costs: Unit shipping costs in Brazil decreased by 8% quarter-on-quarter due to improved logistics and increased transaction volumes.

2. Strategic Updates and Business Highlights

• E-commerce and Fintech Investments: Continued investments in free shipping, logistics, and credit card offerings are expected to drive long-term growth.
• Brazil Market: The reduction of the free shipping threshold has led to increased GMV and items sold, with brand preference scores reaching record highs.
• Mercado Pago Performance: Monthly active users for Mercado Pago grew significantly, with improvements in net promoter scores (NPS) in Brazil.
• Argentina: Despite macroeconomic challenges, revenue growth remained strong at 39% year-on-year in USD and 97% in local currency.

3. Forward Guidance and Outlook

• Investment Strategy: The company plans to continue investing in growth opportunities, particularly in logistics and credit products, while maintaining a focus on profitability.
• Argentina Outlook: Management remains optimistic about long-term growth in Argentina despite current macroeconomic instability, with plans to enhance fulfillment and credit offerings.

4. Challenges and Points of Concern

• Argentina's Economic Environment: The macroeconomic backdrop in Argentina has led to slower growth in GMV and increased funding costs, impacting EBIT margins.
• Competitive Pressures: The competitive environment in Brazil remains intense, with concerns about rationality in competitor behavior.
• Credit Card Business: While older cohorts are profitable, the company is cautious about new credit card issuances in Argentina due to market volatility.

5. Notable Q&A Insights

• User Acquisition: Management emphasized the importance of maintaining a balance between user acquisition costs and profitability, with a sophisticated methodology in place to ensure new users contribute positively.
• Fulfillment Centers: No new fulfillment centers were opened beyond the planned ones, but capacity is being continuously evaluated to meet increasing demand.
• Credit Card Strategy: The company maintains strict underwriting discipline while gradually increasing credit limits for borrowers who demonstrate repayment reliability.
• B2B Initiatives: The partnership with Casas Bahia is expected to enhance product offerings and market share in heavy and bulky items.

Overall, MercadoLibre demonstrated robust growth and strategic investments while navigating challenges in specific markets, particularly Argentina. The company remains focused on long-term value creation through disciplined investments in its ecosystem.