Key Highlights
- Q4 revenue reached $8.76B for MercadoLibre, representing a 45% year-over-year increase and exceeding analyst forecasts by approximately $300M
- Merchandise volume jumped 37% YoY; Mexico experienced 49% growth, Brazil saw 46% expansion
- Earnings per share of $11.03 fell short of the $11.43 estimate as the company increased AI and advertising technology spending
- The MELI+ membership program accelerated growth, now offering Disney+, Netflix, HBO Max, and Apple TV+ bundles
- Shares dropped approximately 5% in after-hours trading post-earnings, yet gained 3% Tuesday; finished Wednesday up 4.29%
The Latin American e-commerce giant MercadoLibre delivered fourth-quarter revenue of $8.76 billion, representing a 45% year-over-year surge and exceeding Wall Street’s projections by approximately $300 million.
The impressive revenue performance lifted shares 3% during Tuesday’s trading session, bouncing back from Monday’s sharp 7% decline — marking the company’s steepest single-day loss since November.
However, in extended trading, the stock retreated roughly 5% as market participants digested the earnings shortfall.
The company reported earnings per share of $11.03, falling short of analyst expectations of $11.43 and representing a decline from the prior year’s $12.61.
Management attributed the earnings gap primarily to increased investments in artificial intelligence capabilities and advertising technology infrastructure, both strategic priorities for the organization.
Strong Performance Across Key Latin American Markets
The platform’s gross merchandise volume expanded 37% compared to the same period last year. Mexico demonstrated particularly robust growth at 49%, while Brazil posted a solid 46% increase.
In Mexico, fulfillment penetration achieved an all-time high of nearly 80% during the fourth quarter, with free shipping availability now matching levels seen in Brazil.
Payment volume across the platform totaled $83.7 billion for the quarter, marking a 42% year-over-year gain.
The company generated $559 million in net income and produced $763 million in free cash flow.
Membership Program Gains Momentum
The company’s MELI+ subscription service concluded the year with accelerating member acquisition.
In Brazil, two strategic initiatives fueled this expansion: reducing the minimum purchase requirement for expedited delivery from R$79 down to R$19, and introducing MELI+ Mega — an enhanced membership that includes Disney+, Netflix, HBO Max, and Apple TV+ streaming services.
The reduced shipping threshold helped decrease member attrition and boosted conversion rates, especially given that the R$9.90 monthly membership fee matched or undercut the cost of a single shipping charge.
MercadoLibre continues expanding its artificial intelligence capabilities throughout the platform. During the fourth quarter, 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 adapts search results based on whether customers typically purchase premium or budget-oriented items — delivering a more tailored experience compared to traditional keyword-based search.
For merchants, the Seller Assistant tool streamlines onboarding processes and helps new sellers achieve higher reputation scores more quickly.
The tool also creates short video content from static product images and manages customer service inquiries that would traditionally require human intervention.
Investments in the advertising platform are beginning to yield positive results. Management noted that spending on enhanced bidding algorithms, improved ad placement options, and better user experience is driving increased adoption among major brands and top-performing sellers.
AI-powered tools support account managers working with large brands, while separate automated systems engage smaller merchants to generate additional demand.
The company characterized these initiatives as preliminary steps in a comprehensive strategy to integrate AI throughout its marketplace ecosystem.
Shares closed Wednesday’s session with a 4.29% gain as market participants balanced the strong revenue performance against the earnings disappointment.
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