MercadoLibre, Inc. Q4 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter & Full-Year Performance Highlights

  • Q4 2025 net revenues grew 45% year-over-year, driven by accelerating commerce and fintech adoption.
  • Full-year 2025 revenues increased 39% year-over-year.
  • Income from operations grew 22% for the full year. Margin compression was expected due to deliberate investments in free shipping, credit card issuance, 1P expansion, and cross-border trade (CBT).
  • AI investments materially boosted revenue performance across advertising, acquiring, customer support, and product discovery.

Commerce Business

  • Brazil GMV rose 35% year-over-year; items sold increased 45%, driven by the lowered free shipping threshold.
  • Mexico GMV also grew 35% year-over-year.
  • Lowering the free shipping threshold increased new buyer acquisition, retention, purchase frequency, and overall marketplace engagement.
  • Brazil logistics unit costs declined 11%, supported by scale efficiencies and expansion of slow-delivery capacity.
  • Cross-border trade expanded, including new China and U.S. corridors; local fulfillment is profitable, while international still scales.

Advertising

  • Ads revenue grew 67% year-over-year on an FX-neutral basis.
  • Growth driven by AI optimization in bidding, placement, campaign automation, and predictive budgeting tools.

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Richard Cathcart: Hello, everyone, and welcome to the MercadoLibre Earnings Conference Call for the quarter ended December 31, 2025. Thank you for joining us. I'm Richard Cathcart, MercadoLibre's Investor Relations Officer. Today, we will share our quarterly highlights on video, after which we will begin our live Q&A session with our management team. Before we go on to discuss our results for the fourth quarter of 2025, I remind you that management may make or refer to and this presentation may contain forward-looking statements and non-GAAP measures. So please refer to the disclaimer on the screen, which will also be available in our earnings materials on our Investor Relations website. Please note that this call is being recorded, and a replay will be made available on our IR website also. With that, let's begin with a short message from our CFO. Martin de Los Santos: Good evening, everyone, and thank you for joining us. I'm pleased to report that we ended 2025 with robust operating trends that reinforce the strength of the MercadoLibre ecosystem. Our relentless focus on customer experience translated directly into strong financial performance with fourth quarter net revenues growth of 45% year-over-year. Our performance is supported by 2 primary growth drivers: the acceleration of our commerce business, and the rapid adoption and structural expansion of our fintech services. Crucially, both of these are increasingly supported by the tangible impact of our investments in ar

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