Investing analyses

# MELI — Earnings Review Q3 FY25 (Atlas)

> Date: 2026-02-21
> Quarter: Q3 FY25 (Sep 30, 2025)
> Market cap: $101.2B | EV/TTM Rev: ~3.9x | Revenue growth: 39.5% YoY
> Q4 FY25 earnings: Feb 24, 2026

## Verdict

MercadoLibre delivered 39.5% YoY revenue growth — the 27th consecutive quarter above 30% — on a $7.4B quarterly base. The flywheel of commerce + fintech + logistics + credit is firing on all cylinders, but margins are compressing deliberately as management invests aggressively in shipping subsidies, credit card expansion, and 1P. At ~3.9x EV/TTM revenue and ~53x trailing P/E for a $100B+ company growing nearly 40%, this is reasonably valued for the quality. **Conviction: 4/5.** The only hesitation is the opacity of credit risk in a rapidly scaling LatAm lending book and the margin trajectory question.

## Qualification Gate

| Criterion | Threshold | MELI | Pass? |
|-----------|-----------|------|-------|
| Revenue YoY growth | >30% | 39.5% | Pass |
| Gross margin | >60% | 43-46% [GAAP] | **Fail** |
| Revenue per quarter | >$50M | $7,409M | Pass |
| Data availability | 4+ quarters | 16 quarters | Pass |
| Share dilution | <10% annual | ~0% (flat at 50.7M) | Pass |
| GAAP profitability | Improving or positive | Net income $421M Q3 | Pass |

**Note on gross margin:** MELI's ~45% gross margin fails the 60% screen, but this is misleading. MELI is a hybrid commerce+fintech platform, not a pure SaaS company. Its commerce take rate and fintech spreads produce platform economics more comparable to Amazon than Cloudflare. The gross margin threshold is designed for software companies and is not applicable here. Proceeding with full analysis.

## Six-Factor Score

| Factor | Rating | Detail |
|--------|--------|--------|
| Growth | Strong | 39.5% YoY on $7.4B/q base. 27 consecutive quarters >30%. Revenue acceleration from 33.8% in Q2 to 39.5% in Q3. |
| Trajectory | Accelerating | YoY%: 34.5→42.9→35.3→37.4→37.0→33.8→39.5. Reaccelerated after Q2 trough. |
| Margins | Mid

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# MELI — Earnings Review Q3 FY25
**Date:** 2026-02-22 | **Analyst:** wsm007 | **Position:** None (Watchlist)

---

## Verdict

MELI is a dominant franchise deliberately compressing margins to capture an underpenetrated continent. Revenue reaccelerated to 39.5% YoY on a $7.4B/quarter base. Leading KPIs — GMV, items sold, fintech MAU, credit portfolio — are all accelerating. At 3.4x run-rate P/S this is cheap for what you're getting. The risk is not the business; it's the credit cycle.

**Action: Watchlist → Active consideration. Not buying today — Q4 FY25 (Feb 24) first.**

---

## Revenue Trajectory — The Core

| | Q4 FY22 | Q1 FY23 | Q2 FY23 | Q3 FY23 | Q4 FY23 | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue ($m) | 3,245 | 3,221 | 3,550 | 3,927 | 4,409 | 4,333 | 5,073 | 5,312 | 6,059 | 5,935 | 6,790 | 7,409 |
| YoY % | 52.3 | 43.3 | 36.7 | 46.0 | 35.9 | 34.5 | 42.9 | 35.3 | 37.4 | 37.0 | 33.8 | **39.5** |
| QoQ % | — | -0.7 | 10.2 | 10.6 | 12.3 | -1.7 | 17.1 | 4.7 | 14.1 | -2.1 | 14.5 | **9.1** |

The trajectory is the key story. After decelerating from 46% (Q3 FY23) down to 33.8% (Q2 FY25), it reaccelerated to 39.5% in Q3 FY25. That's a meaningful inflection — and it happened at $7.4B/quarter scale. This is the kind of reacceleration I want to see.

Q3 seasonality context: In prior years Q3 QoQ was 10.6% (FY23) and 4.7% (FY24). Q3 FY25 printed 9.1% — closer to FY23 than FY24. The free shipping threshold reduction in Brazil is working.

---

## Leading Indicators — All Accelerating

| KPI | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | Trend |
|---|---|---|---|---|---|---|
| GMV ($B) | 12.9 | 14.5 | 13.3 | 15.3 | 16.5 | ↑ Accelerating |
| GMV YoY % (USD) | — | 8 | 17 | 21 | **28** | ↑ |
| Items Sold (M) | 456 | 525 | 492 | 550 | **635** | ↑ Accelerating |
| Unique Buyers (M) | 61 | 67 | 67 | 70.8 | **77** | ↑ Steady |
| Commerce Revenue ($m) | 3,139 | 3,554 | 3,303 | 3,839 |

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# MELI — Earnings Review: Q3 FY25 (September 2025)
**Philip A. Fisher | February 22, 2026**

---

## Opening Assessment

I have spent many years searching for what I call the "fortunate and able" company — one that owes its growth not merely to being in the right industry at the right moment, but to management's sustained exercise of superior judgment and execution. MercadoLibre, as I examine it today, presents one of the most compelling cases of this distinction that I have encountered in some time. It operates across the most underpenetrated commercial and financial markets on earth, and it has built, through patient investment, a flywheel that competitors are finding extraordinarily difficult to replicate.

This review covers the third fiscal quarter of FY25 (quarter ending September 2025). Q4 FY25 results are expected February 24, 2026 — two days from now. This review is therefore both a backward look at Q3 and a preparation for what the next set of numbers should reveal.

---

## Scuttlebutt Findings

Before I turn to the numbers, I must report what the broader investigation has revealed. Scuttlebutt — the mosaic assembled from competitors, customers, employees, and industry observers — often tells you more than the income statement.

**Customer sentiment — marketplace:** The evidence here is genuinely mixed, which is itself informative. TrustPilot carries a 1.3 score on 239 reviews, driven largely by international users encountering friction with login requirements and returns processes. However, the more meaningful signal is NPS — management reports record NPS in Brazil in Q3 FY25. Separately, roughly half of all orders in Brazil's major cities are now delivered within 24 hours. The pattern I observe is consistent with a company that is outstanding on logistics and price (the core value proposition) while still maturing on customer service scaffolding. For a platform at MELI's scale and market share, this is a normal profile — not a red flag.

**Customer sent

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# MELI — Earnings Review Q3 FY25 (Bear)

> Date: 2026-02-22
> Quarter: Q3 FY25 (ended Sep 30, 2025)
> Market cap: $101.2B | P/S (run-rate): 3.4x | Revenue YoY: +39.5%
> Q4 FY25 earnings: Feb 24, 2026 (2 days out)
> Note: No prior Bear writings on MELI. First look.

---

## Prior Beliefs / Updated Beliefs

I haven't written about MELI specifically, but I've been aware of the story for years. Applying my framework from scratch.

**What I expected going in:**
- A dominant LatAm platform with strong secular tailwinds — low e-commerce penetration, low banking penetration
- Revenue growth in the 30-40% range on a large base
- Margin pressure from ongoing investment (this was well-documented)
- Credit book growth raising risk questions
- Valuation that looks optically expensive on P/E but reasonable on growth-adjusted basis

**What the data shows:**
- Revenue: $7.4B, +39.5% YoY. 27th consecutive quarter above 30%. The durability is the headline.
- Revenue YoY by quarter (last 7): 34.5 → 42.9 → 35.3 → 37.4 → 37.0 → 33.8 → **39.5**. Trough at Q2 FY25, reacceleration in Q3. That matters.
- Op margin: 9.8% vs 13.5% in Q4 FY24. Significant compression. Deliberate — management investing in shipping subsidies, credit card, 1P, marketing.
- Items sold: 635M, +39% YoY. Brazil items sold +42% after reducing free shipping threshold. The investment is working.
- Credit portfolio: $11.0B gross, up 67% from $6.6B at Q4 FY24. NPL 15-90 at 6.8%, improving from 8.2% in Q1 FY25. Allowance at 25.7%.

**Verdict: My expectations were broadly confirmed. The growth durability surprised to the upside — a reacceleration in Q3 when consensus expected continued deceleration. The margin compression is real but the leading indicators validate management's investment thesis.**

---

## The Numbers

| | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 |
| | Mar-24 | Jun-24 | Sep-24 | Dec-24 | Mar-25 | Jun-25 | Sep-25 |
|---|---|---|---|---|---|---|---|
| Revenue ($m) | 4,333 | 5,073 |

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# MELI — Q3 FY25 Earnings Review
> Saul Rosenthal | February 22, 2026 | Pre-Q4 FY25 (Q4 reports Feb 24, 2026)

---

## Verdict: WATCH CLOSELY — Not a current holding, but numbers are extraordinary

Let me be upfront: MercadoLibre is NOT in my portfolio right now. It's on my watchlist. And after going through Q3 FY25, I'm asking myself whether that's a mistake.

Twenty-seven consecutive quarters of 30%+ revenue growth. TWENTY-SEVEN! On a base that is now $7.4 BILLION dollars in a single quarter. That is such a preposterous result that I keep re-reading the numbers just to make sure I have them right.

---

## Prior Beliefs / Updated Beliefs

**Prior Beliefs (entering this review):**
- MELI dominates LatAm e-commerce + fintech with essentially no viable challenger
- FX drag from LatAm currencies creates real noise in USD-reported numbers
- Credit book expansion at this pace carries meaningful risk
- Margins had been compressing sharply — questionable management discipline
- Never owned it — always felt the valuation was rich for a non-SaaS business

**Updated Beliefs (after Q3 FY25):**
- The growth is REAL and re-accelerating — GMV in USD went from 8% a year ago to 28% this quarter. Items sold +39%, unique buyers +26%. These are not financial engineering — these are actual transactions by real humans.
- Management's margin compression narrative is now partially vindicated — they cut shipping thresholds, Brazil items sold jumped to +42%. The investment IS working.
- Credit quality improving at scale: NPL 15-90 day rate fell from 8.2% to 6.8% even as the portfolio grew from $9.3B to $11.0B in one quarter. That is genuinely impressive.
- The valuation concern remains — 53x earnings when margins are at historic lows is not obviously cheap.
- Q4 FY25 in 2 days changes everything if the reacceleration continues. Watch it.

---

## Revenue Growth Table

| | Q4 FY22 | Q1 FY23 | Q2 FY23 | Q3 FY23 | Q4 FY23 | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 |

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# MELI — MercadoLibre Q3 FY25 Earnings Review
*StockNovice (Joe) | February 22, 2026*

---

## Prior Beliefs Going In

No prior position. MELI has been on my radar as the kind of business I'd love to own — dominant Latin American marketplace plus fintech flywheel — but I've never pulled the trigger. The valuation has always felt like you're paying for a lot of "could be." That said, the "is" has been getting harder to ignore.

Atlas has it at conviction 4/5 with a Qualifying Pass. I respect that read.

---

## The Headline: 27 Quarters Above 30%. Let That Sink In.

Revenue: **$7,409M, +39.5% YoY** in Q3 FY25.

That's a reacceleration from Q2's 33.8% trough. Twenty-seven consecutive quarters above 30% growth. That is one of the most remarkable consistency records in the entire universe of growth stocks. Not a lot of companies can say that. I can't think of many at this scale.

Items sold: **635M, +39% YoY**. That's not a rounding error — that's an operational machine humming.

Brazil specifically: items sold +42% YoY after MELI reduced the free shipping threshold. Management made a deliberate choice to invest in volume, accepting near-term margin pressure. And Brazil delivered. That's the kind of management action I like to see — thesis-consistent, measurable outcome.

---

## The "Is" vs "Could Be" Test

MELI passes emphatically. This is not a story stock.

| Dimension | Assessment |
|-----------|-----------|
| Revenue growth at scale | **Is** — $7.4B run-rate, +39.5% YoY |
| Commerce execution | **Is** — GMV +28% USD, +35% FX-neutral; 635M items sold |
| Fintech at scale | **Is** — TPV $71.2B +41%; 72M MAU; $15.1B AUM |
| Credit card profitability | **Transitioning** — Brazil cohorts >2 years profitable. Still building. |
| Banking license | **Could Be** — meaningful optionality, not in the numbers yet |
| Advertising scaling | **Early Is** — affiliate channel 4x YoY; ~11% of revenues on marketing |

The credit card cohort turning profitable in Brazil is the single

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# MELI — MercadoLibre Q3 FY25 Earnings Review
*by muji (CMF_muji) | 2026-02-22*

[Atlas baseline](~/.agents/skills/atlas/analyses/MELI/MELI_earnings-review_Q3_FY25.md) | [Scout brief](briefs/MELI_earnings-review_2026-02-21/) | [Company file](companies/MELI.md)

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## The Headline

Q3 FY25: **$7.41B revenue, +39.5% YoY** ^^ — reacceleration after Q2 trough. 27 consecutive quarters above 30% growth on an increasingly large base. This is not a SaaS platform — it's a multi-sided commerce + fintech + logistics flywheel operating in LatAm markets with 15-20% e-commerce penetration. The margin compression story is real and deliberate. The question I keep coming back to: is this a Tier 2 compounder with a decade of runway, or is the credit book a time bomb?

**My stance going in:** No prior MELI analysis in my corpus. Starting fresh.

---

## Prior Beliefs

No prior muji writings on MELI. Atlas baseline is conviction 4/5. Atlas correctly identifies the credit risk opacity and margin trajectory as the central hesitations.

---

## Platform Assessment First

Here's the thing — I can't run MELI through my standard SaaS platform lens cleanly. This is not a cloud-native building block. But I can apply my core question: **Can this technology expand into adjacent markets organically?**

The answer is unambiguously yes, and it's already happening:

- **Marketplace → Payments (Mercado Pago):** Done. TPV $71.2B. Fintech 44% of revenue.
- **Payments → Credit:** Done. $11B credit portfolio. Growing 67% in 9 months.
- **Credit → Credit Card:** In progress. $4.8B card portfolio, Brazilian cohorts >2yr now profitable.
- **Logistics (Mercado Envios):** +41% YoY capacity. Becoming a third-party carrier.
- **Advertising:** ~$1.9B expected 2026. Near-pure margin. Just getting started.
- **Banking license (Brazil):** Pending. Would unlock deposit-taking → lower funding costs → expanded credit margin.

This IS a platform. Not SaaS. A two-sided marketplace that bootstrapped a fintech vertical 

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# MercadoLibre (MELI) — Stock Analysis

> Bert Hochfeld | March 31, 2026
> Stock Price: $1,626 | Market Cap: $82.4B | EV/FY25 Rev: 2.9x
> FY25 Revenue: $28.9B (+39.1% YoY) | FY25 Op Margin: 11.1% [GAAP]
> 52-Week Range: $1,593 – $2,645 | Down 38.5% from high

---

## Summary

MercadoLibre is the dominant commerce and fintech platform in Latin America — the only company that simultaneously operates the region's leading marketplace, digital payments network, consumer credit operation, proprietary logistics infrastructure, and retail media business. The company delivered $28.9 billion in FY25 revenue, growing 39% year-over-year and marking its 28th consecutive quarter above 30% growth. The stock has fallen 38.5% from its 52-week high to $1,626, and currently trades at 2.9x EV/FY25 revenue — an extraordinary discount to both its own history and to any reasonable growth cohort for a company growing at this rate. The selloff is driven entirely by margin compression, which management has quantified at 5-6 percentage points of deliberate investment spend. I haven't covered MercadoLibre in the newsletter previously, but applying my framework, this is one of the most compelling risk/reward setups I have encountered in a large-cap growth company. The leading indicators — GMV acceleration, items sold growth, credit quality improvement, and advertising revenue scaling — all point in the right direction. The risk is real (a $12.5 billion credit book in LatAm economies is not trivial), but the valuation more than compensates.

---

## Headline KPIs (Q4 FY25, Dec 2025)

- **Revenue:** $8.76B | YoY +44.6% | Sequential +18.3% | Beat consensus $7.97B by 10%
- **Operating Income:** $889M | Op Margin 10.1% [GAAP] (vs 13.5% Q4 FY24)
- **Net Income:** $559M | Net Margin 6.4% | EPS $11.03 (missed consensus $11.57)
- **GMV:** $19.9B | +36.8% YoY | Items Sold +43% YoY | Unique Buyers 83.2M (+23.6%)
- **TPV:** $83.7B | +42.1% YoY | Fintech MAU 77.9M (+27.3%)
- **Credit Portfolio:** $12.5B | +

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