MercadoLibre Revenue Grows 45% Amid Margin Compression from Strategic Investments
MercadoLibre (MELI) reported strong top-line growth with quarterly revenue increasing 45% to $10.75 billion, surpassing analyst estimates. However, the company's stock fell 12% as investors reacted to narrowing margins and operating income that dropped to $601 million from $636 million in the previous period. This compression is driven by aggressive reinvestment into logistics, lower free shipping thresholds, and the expansion of its credit business. Despite the immediate profit headwinds, management highlighted significant scale efficiencies, such as a 14% reduction in shipment costs in Brazil since early 2025. The company also saw its credit portfolio grow 62% to $18 billion. While earnings per share of $8.83 missed analyst expectations of $9.27, the company continues to gain market share in key regions including Brazil, Mexico, and Argentina.
Topics: earnings miss e-commerce fintech margin compression revenue growth