Key Highlights
- Fourth-quarter revenue reached $8.76B, representing a 45% year-over-year increase and exceeding projections by approximately $300M
- Gross merchandise volume expanded 37% YoY, with Mexico climbing 49% and Brazil advancing 46%
- Earnings per share landed at $11.03, falling short of the $11.43 forecast amid substantial AI and advertising platform expenditures
- MELI+ membership service accelerated growth, now offering Disney+, Netflix, HBO Max, and Apple TV+ bundles
- Shares dropped approximately 5% in after-hours trading following earnings release, then gained 3% on Tuesday, finishing Wednesday up 4.29%
MercadoLibre delivered fourth-quarter revenue totaling $8.76 billion, marking a 45% increase compared to the prior year and surpassing analyst projections by approximately $300 million.
The robust revenue performance lifted shares 3% during Tuesday trading, bouncing back from Monday’s nearly 7% decline — the steepest single-day drop since November.
During extended trading hours, shares retreated once more, sliding close to 5% as market participants digested the earnings shortfall.
Earnings per share registered at $11.03, trailing the consensus forecast of $11.43 and declining from $12.61 during the comparable quarter last year.
The shortfall stemmed primarily from expenditures on AI infrastructure and advertising platform development, both priority areas for the company’s growth strategy.
Regional Markets Power Volume Expansion
Gross merchandise volume expanded 37% year-over-year throughout the platform. Mexico demonstrated the strongest performance with a 49% surge, while Brazil recorded 46% growth.
Fulfillment penetration in Mexico achieved an all-time high approaching 80% during Q4, bringing free shipping availability to levels comparable with Brazil.
Total payment volume reached $83.7 billion throughout the quarter, reflecting a 42% year-over-year expansion.
Net income totaled $559 million, while free cash flow registered at $763 million.
Membership Program Gains Momentum
MELI+, the platform’s subscription offering, concluded the year with accelerating member acquisition.
Brazil saw two strategic changes fuel this expansion: reducing the minimum order value for expedited shipping from R$79 down to R$19, and introducing MELI+ Mega — an enhanced tier featuring Disney+, Netflix, HBO Max, and Apple TV+ access.
The reduced shipping threshold decreased member attrition and boosted conversion rates, especially when the R$9.90 monthly subscription fee matched or undercut individual shipping charges.
MercadoLibre is deepening its AI integration throughout the platform. During Q4, the company introduced an AI-powered search experience in Argentina that leverages individual buyer search patterns and purchase history to recommend relevant products.
The technology tailors results according to whether buyers gravitate toward premium or budget-friendly options — delivering a more customized experience compared to conventional keyword searches.
For merchants, the Seller Assistant tool streamlines new vendor onboarding and accelerates progression through reputation levels.
The tool also creates short-form product videos using just a single photograph and manages customer service requests that previously required human intervention.
Advertising platform investments are beginning to yield measurable results. The company reported that investments in bidding algorithms, ad placement optimization, and interface enhancements are driving increased adoption among major brands and leading sellers.
Account executives serving large brands receive support from AI-powered tools, while separate systems engage smaller, niche sellers to generate additional demand.
MercadoLibre characterized these initiatives as preliminary phases in a comprehensive strategy to integrate AI throughout its marketplace ecosystem.
Shares concluded Wednesday trading with a 4.29% advance as market participants balanced the revenue outperformance against the earnings disappointment.
