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Investing.com -- MercadoLibre Inc (NASDAQ:MELI) shares edged 1.6% lower in after-hours trading Wednesday after the Latin American e-commerce and fintech leader reported third-quarter earnings that missed Wall Street expectations, despite strong top-line growth. Earnings per share of $8.32 fell short of the consensus estimate of $9.37, while revenue rose 39% year-over-year to $7.41 billion, beating expectations of $7.19 billion.
The stronger-than-expected revenue was driven by robust commerce and financial services growth. Commerce generated year-over-year revenue growth of 33%, while the fintech segment surged 49%, reflecting broader adoption of digital payments in key markets like Brazil, Mexico, and Argentina.
Total Payment Volume (TPV) reached $71.2 billion, up 41% from a year ago, bolstered by off-platform services from Mercado Pago and strong acquiring momentum. Gross Merchandise Volume (GMV), the value of goods sold across its marketplace, climbed 28% to $16.5 billion, lifted by solid e-commerce demand and logistics improvements in core markets.
“Unique buyers in Brazil grew 29% YoY in Q3’25 – the fastest pace since Q1’21 and the largest quarterly addition of unique buyers ever, surpassing even the pandemic peak,” management said in its shareholder letter, highlighting the impact of free shipping incentives. “Offering more free shipping is a key pillar of our strategy to capture this long-term growth opportunity.”
The company reported an operating income of $724 million, with a margin of 9.8%, as ongoing investments into fulfillment, social commerce, and credit expansion weighed on profitability. Nevertheless, fiscal discipline and cost optimization helped maintain efficient operations, even as net income grew modestly to $421 million.
MercadoLibre continues to show gains across all its major regions, particularly in Mexico, where GMV and sold items both rose 42%. Its fintech arm, Mercado Pago, surpassed 72 million monthly active users and expanded its credit portfolio by 83% year-over-year to $11 billion, while maintaining stable asset quality and reducing default rates.
The company emphasized that digital banking penetration remains in early stages across Latin America. “We see ourselves as exceptionally well-positioned to accelerate financial inclusion and e-commerce penetration across Latin America, and are committed to investing to achieve this,” the management wrote, affirming its bullish outlook despite short-term margin compression.
Investor sentiment may remain cautious in the near term as the earnings miss overshadows otherwise strong operational performance. However, with major gains in user acquisition, logistics efficiency, and payments adoption, MercadoLibre continues to build a defensible moat across its multi-pronged platform.