Mercado Libre (MELI) kicked off 2025 with a robust Q1 performance, underscoring its leadership in Latin America's digital commerce and fintech sectors. The company reported net revenues and financial income of $5.94 billion, marking a 37% year-over-year increase, or 64% on a foreign exchange-neutral basis, fueled by consistent momentum across both segments. Income from operations rose 45% to $763 million, with an EBIT margin of 12.9%, while net income climbed 44% to $494 million, translating to an 8.3% margin—both reflecting efficient scale and margin improvements, especially in Argentina.

Commerce remained a key growth driver, generating $3.30 billion in revenues, up 32.3% YoY, with Gross Merchandise Volume (GMV) hitting $13.3 billion, up 17% YoY (40% FX-neutral). The platform saw significant volume growth, with 492 million items sold (+28%) and 67 million unique active buyers (+25%). Regional standouts included Argentina, where commerce revenues surged 137% and GMV soared 126%, highlighting both macro stabilization and operational excellence. Brazil and Mexico also posted healthy growth, while the supermarket category grew fastest at 65% YoY in items sold. Advertising revenue rose 50% FX-neutral, aided by a substantial rise in display ad penetration.

On the fintech side, revenues grew 43.3% YoY to $2.63 billion, supported by a 43% increase in Total Payment Volume (TPV) to $58.3 billion (72% FX-neutral). The credit portfolio expanded 75% YoY to $7.8 billion, with asset quality remaining stable and default rates in Brazil at historic lows. Fintech monthly active users reached 64 million, up 31% YoY, reflecting accelerated adoption. While Net Interest Margins After Losses (NIMAL) declined to 22.7% from 31.5%, this was due to a strategic shift toward higher-quality, upmarket credit card customers.

Despite a seasonally low adjusted free cash flow of -$10 million, impacted by $770 million in credit-related funding and $256 million in capital expenditures, Mercado Libre generated a solid $1.03 billion in operating cash flow. The company ended the quarter with $4.96 billion in available cash and investments, underscoring its balance sheet strength.

Geographically, Brazil accounted for 51.9% of consolidated revenues, followed by Mexico at 20.6%, while Argentina's share jumped to 23.3%, up from 14.2% last year, thanks to breakout growth and improved profitability. Management emphasized its commitment to long-term growth over short-term margin gains, with continued investments in logistics, credit, advertising, and user experience seen as essential to sustaining competitive advantage. Notably, online transactions still represent just 15% of the region’s total, signaling vast untapped potential.

Overall, Mercado Libre’s Q1 results showcase a well-balanced growth story across regions and segments, with operational discipline and strategic reinvestment setting the foundation for continued leadership in Latin America's digital economy.