About Mercado Libre
Mercado Libre, the most valuable company in Latin America by market capitalization, is a leading e-commerce platform based in Argentina. Founded in 1999 by Marcos Galperin, Mercado Libre has grown to become a significant player in the Latin American e-commerce market, offering a wide range of products and services. The company’s core offerings include an online marketplace, Mercado Libre Marketplace, and a digital payments platform, Mercado Pago.
Q1 2025 Financial Performance
Mercado Libre reported a 44% interannual increase in its net income for the first quarter of 2025, surpassing analysts’ expectations. The company announced a net income of $494 million, compared to the analysts’ estimate of $420.9 million.
Argentina’s Strong Performance
Argentina played a crucial role in Mercado Libre’s Q1 2025 performance, with a 126% growth in sales (measured by the Value of Merchandise Shipped – VBM) compared to a neutral currency base. This growth significantly contributed to the overall 40% increase in VBM.
Key Factors Driving Growth:
– Initial impacts of a currency devaluation at the end of 2023
– Lower inflation and interest rates
– Increased sales and credit demand in the country
Revenue Highlights
Mercado Libre’s total revenue reached $5.9 billion, marking a 37% interannual increase and exceeding analysts’ expectations of $5.51 billion. The company’s reliance on its e-commerce marketplace and Mercado Pago technology for the majority of its income is evident in these figures.
Profitability Metrics
Mercado Libre’s EBIT (Earnings Before Interest and Taxes) came in at $763 million, surpassing analysts’ projections of $617.4 million and marking a 45% interannual increase. The EBIT margin improved to 12.9%, up from 12.2% in the previous year.
Credit Portfolio Expansion
Mercado Libre expanded its credit portfolio by 75% interannually, reaching $7.8 billion, driven mainly by credit card issuance. The portfolio grew from $6.6 billion in December, showcasing the company’s focus on financial services.
Credit Quality Indicators
The ratio of delinquency for 15 to 90 days increased to 8.2%, up 0.8 percentage points from the previous quarter and down from 9.3% a year ago, indicating improved credit quality.
Key Questions and Answers
- Q: Who is Mercado Libre, and why is it relevant?
A: Mercado Libre is a leading e-commerce platform in Latin America, founded by Marcos Galperin in 1999. It offers an online marketplace and a digital payments platform, making it a significant player in the region’s e-commerce market.
- Q: What drove Mercado Libre’s strong Q1 2025 performance?
A: Argentina’s robust growth, lower inflation and interest rates, and increased sales and credit demand in the country significantly contributed to Mercado Libre’s impressive Q1 2025 performance.
- Q: How did Mercado Libre’s revenue and profitability fare in Q1 2025?
A: Mercado Libre reported total revenue of $5.9 billion, a 37% interannual increase, and net income of $494 million, surpassing analysts’ expectations. EBIT came in at $763 million, a 45% interannual increase, with an EBIT margin of 12.9%.
- Q: How has Mercado Libre’s credit portfolio evolved?
A: Mercado Libre expanded its credit portfolio by 75% interannually, reaching $7.8 billion, driven mainly by credit card issuance. The delinquency ratio improved to 8.2%, indicating better credit quality.
