By Brazil Stock Guide – Mercado Livre Inc. (Nasdaq: MELI) reported third-quarter 2025 revenue and financial income of $7.4 billion, a 39% year-on-year jump (49% FX-neutral), underscoring the company’s ability to balance aggressive investment with profitability. Operating income climbed 30% to $724 million (9.8% margin), while net income rose 6% to $421 million despite FX losses tied to Argentina’s peso depreciation.
Brazil Drives the Flywheel
In its largest market, Brazil, Mercado Livre cut the free-shipping threshold from R$79 to R$19, driving a 29% increase in unique buyers — the fastest pace since 2021 — and a 42% rise in items sold. GMV grew 34% year on year (FX-neutral) as record visits, conversions, and retention lifted market share to new highs. Logistics absorbed a 28% quarter-on-quarter shipment jump without delays, while unit shipping costs fell 8% in local currency.
Mexico delivered similarly strong momentum with GMV up 34% and fulfillment costs down 12% YoY. In Argentina, sold items rose 34% and GMV 44%, showing resilience in a difficult macro setting. Company-wide, GMV reached $16.5 billion (+28%), and total payment volume (TPV) jumped 41% to $71.2 billion.
Fintech Momentum
Fintech monthly active users climbed 29% to 72 million, reinforcing Mercado Pago’s status as Latin America’s leading digital banking ecosystem. The credit portfolio expanded 83% to $11 billion, while non-performing loans held steady at 6.8%. More than half of credit-card transactions in Brazil now occur off-platform, signaling broader adoption beyond MELI’s marketplace. In Argentina, the new Mercado Pago credit card is part of a push to bring credit access to the six in ten adults who still lack a card.
Margins, Cash Flow and Outlook
Operating margin eased slightly amid the free-shipping subsidy and social-commerce expansion, yet cash generation remained robust: adjusted free cash flow was $206 million after $357 million in capex and $1.7 billion in credit portfolio growth (partially offset by $485 million in third-party funding).
Management highlighted this as the 27th consecutive quarter of 30%-plus revenue growth. “We are exceptionally well-positioned to accelerate financial inclusion and e-commerce penetration across Latin America,” the company told shareholders, emphasizing long-term discipline and scale.
Context
With e-commerce penetration in Latin America still in the mid-teens and fintech market share in single digits, Mercado Livre believes it is still early in its growth cycle. The MELI+ loyalty program — bundling streaming services and cashback via partners such as Petrobras and McDonald’s — is deepening ecosystem engagement. As shipping efficiency improves and credit products mature, the company expects profitability to expand alongside its regional reach.