MercadoLibre (NASDAQ: MELI) delivered a split verdict in its Q4 2025 report: a significant revenue beat undercut by a notable earnings miss, sending the stock lower after hours.
Revenue came in at $8.76 billion, surpassing the $7.97 billion consensus by roughly 10% and growing 44.6% year-over-year. But diluted EPS of $11.03 missed the $12.09 estimate by about 8.8%, with the shortfall driven by two key factors: strategic investments in free shipping, cross-border trade, first-party retail, and credit card expansion that compressed operating margin by an estimated 5-6 percentage points, plus tax rate normalization that pushed net income down 13% year-over-year to $559 million.
The underlying business metrics were strong. Total payment volume hit $83.7 billion, up 42.1% year-over-year, while gross merchandise volume reached $19.9 billion, up 36.8%. The fintech arm continued its breakout run: the credit portfolio surged 90% to $12.5 billion and fintech monthly active users grew 28% to 78 million. Advertising revenue expanded 67% on an FX-neutral basis.
The stock closed at $1,922.56 on February 24, already down 10% over the prior month. The consensus analyst target sits at $2,803, with 23 buy or strong-buy ratings and just three holds, suggesting Wall Street views the margin compression as a deliberate investment cycle rather than structural deterioration. Whether new CEO Ariel Szarfsztejn will provide clearer profitability timelines as the China-to-LatAm cross-border trade corridor scales in 2026 remains a key question heading further into the year.
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