MercadoLibre’s third quarter results were met with a negative market reaction, as robust revenue growth was offset by a shortfall in GAAP earnings per share relative to analyst expectations. Management attributed the strong top-line increase to their ongoing investments across e-commerce and fintech, particularly noting the positive impact of a reduced free shipping threshold in Brazil on both gross merchandise volume (GMV) and user engagement. CFO Martin de Los Santos pointed to operational scale and improved buyer retention as key contributors, while also acknowledging that the increased marketing and logistics spend placed pressure on short-term margins.
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MercadoLibre (MELI) Q3 CY2025 Highlights:
- Revenue: $7.41 billion vs analyst estimates of $7.20 billion (39.5% year-on-year growth, 2.9% beat)
- Adjusted EPS: $8.32 vs analyst expectations of $9.37 (11.2% miss)
- Adjusted EBITDA: $933 million vs analyst estimates of $964.1 million (12.6% margin, 3.2% miss)
- Operating Margin: 9.8%, in line with the same quarter last year
- Unique Active Buyers: 76.8 million, up 16 million year on year
- Market Capitalization: $116.9 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From MercadoLibre’s Q3 Earnings Call
- Andrew Ruben (Morgan Stanley) asked about Argentina’s economic outlook and the impact of recent elections on growth plans. CFO Martin de Los Santos explained that volatility led to slower growth and higher funding costs, but reaffirmed long-term optimism and ongoing investment in the country.
- Irma Sgarz (Goldman Sachs) questioned the sustainability of user growth and marketing spend. COO Ariel Szarfsztejn clarified that around 7.8 million new buyers were added, with marketing spend targeted to profitable segments and expected to remain consistent.
- Bob Ford (Bank of America) inquired about merchant adherence to value-based search algorithms in Brazil. Szarfsztejn said adherence was high and aimed at enhancing buyer experience, but noted it was too early to discuss long-term results.
- Josh Beck (Raymond James) asked about the drivers and future potential for lower shipping costs in Brazil. De Los Santos attributed the reduction to scale and utilization improvements, with further gains possible through continued productivity enhancements and automation.
- Craig Maurer (FT Partners) probed the profitability of credit card cohorts. Osvaldo Giménez, CEO of Mercado Pago, stated that cohorts older than two years in Brazil are profitable, with future profitability depending on the evolving mix of cardholder vintages.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) whether MercadoLibre’s logistics investments can continue to reduce shipping costs without sacrificing delivery speed, (2) the pace of fintech adoption and credit quality metrics as new products mature, and (3) performance in key markets like Argentina and Mexico amid shifting macroeconomic and competitive landscapes. Execution on AI-driven user engagement and further ecosystem integration will also be key milestones.
MercadoLibre currently trades at $2,295, in line with $2,305 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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