MercadoLibre, Inc. Letter to Shareholders Q2'25 Results MONTEVIDEO, Uruquay; August 4, 2025 -- MercadoLibre, Inc. (Nasdaq; MELI) (http://www.mercadolibre.com), Latin America's leading e-commerce and fintech company, today reported financial results for the second quarter ended June 30, 2025. Net revenues & financial income of $6,790 million, up 34% YoY and 53% FX-neutral Income from operations of $825 million, with a 12.2% margin Net income of $523 million, with a 7.7% margin $64.6 billion Total Payment Vol ...

Core Viewpoint - MercadoLibre (MELI) is expected to report second-quarter 2025 results on August 4, with projected revenues of $6.52 billion, reflecting a year-over-year growth of 28.57% and earnings estimated at $12.01 per share, indicating a 14.6% increase year-over-year [1] Revenue Estimates - The Zacks Consensus Estimate for second-quarter 2025 revenues from Argentina is $1.46 billion, suggesting a 68.9% increase year-over-year [4] - Brazil's revenue estimate stands at $3.5 billion, indicating a 26.1% increase from the previous year [4] - Mexico's revenue is estimated at $1.38 billion, reflecting a 15.2% year-over-year increase [4] - Revenues from other countries are pegged at $294 million, suggesting a 33% increase year-over-year [5] Earnings Performance - MELI has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 22.59% [2] - Currently, MELI has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell), indicating a lower likelihood of an earnings beat [3][17] Growth Factors - The company entered Q2 2025 with strong momentum from exceptional Q1 results, reporting net revenues of $5.9 billion, up 37% year-over-year [6] - Argentina's performance in Q1 was particularly strong, with U.S. dollar revenues more than doubling year-over-year, expected to continue into Q2 [7] - The fintech segment showed robust growth, with monthly active users reaching 64.3 million, a 31.2% increase year-over-year [8] Competitive Landscape - Competition from e-commerce giants like Amazon, Alibaba, and Walmart may have intensified, particularly in Mexico and Brazil, potentially impacting MELI's user growth and pricing power [10] - These competitors bring significant pricing pressure and fulfillment capabilities, which could challenge MELI's margins and user retention [10] Stock Performance and Valuation - MELI has achieved a 39.6% year-to-date return, significantly outperforming the Retail-Wholesale sector and the S&P 500 [11] - The company's forward 12-month Price-to-Sales ratio is 3.81X, representing a 75% premium to the industry average of 2.17X, indicating elevated growth expectations are already reflected in the share price [14] - The stock's Value Score of D suggests limited upside potential and increased vulnerability to earnings disappointments [14] Conclusion - MercadoLibre is experiencing continued momentum from Argentina's recovery and fintech expansion, but investors should remain cautious ahead of earnings due to margin pressures from strategic investments and intensified competition [16]

Economic Recovery in Argentina - Argentina is experiencing significant economic recovery due to radical reforms implemented by President Javier Milei, who is identified as a libertarian leader [1]

Group 1 - The CEO of Mercado Libre, Marcos Galperin, will transition to the role of executive chairman on January 1, 2026, focusing significantly on artificial intelligence [1][2] - Ariel Szarfsztejn, who has been with Mercado Libre since 2017 and currently leads the marketplace, will take over as CEO [2][3] - Galperin aims to ensure Szarfsztejn's success in his new role and will remain actively involved in strategic decisions and company culture [3][4] Group 2 - Galperin plans to concentrate on specific projects, particularly in AI and capital allocation decisions, while supporting Szarfsztejn [4] - Szarfsztejn expressed excitement about leading the company into a new era shaped by AI [5] - Mercado Libre reported a 25% year-over-year growth in unique active buyers, contributing significantly to gross merchandise volume (GMV) growth [5]

Leadership Transition - MercadoLibre Inc co-founder Marcos Galperin 将卸任 CEO [1] - Marcos Galperin 卸任 CEO 后将专注于人工智能项目 [1] Strategic Focus - MercadoLibre 将重心放在人工智能项目上 [1]

Core Insights - Analysts project that MercadoLibre (MELI) will report quarterly earnings of $12.01 per share, reflecting a year-over-year increase of 14.6% [1] - Revenue is expected to reach $6.52 billion, marking a 28.6% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' projections [1] Revenue Estimates - 'Revenues- Fintech' are estimated at $2.94 billion, representing a 39.9% increase from the prior-year quarter [4] - 'Revenues- Commerce' are forecasted to be $3.70 billion, indicating a 24.7% year-over-year change [4] - 'Geographic Revenue- Mexico' is projected to reach $1.38 billion, reflecting a 15.2% increase from the previous year [4] Geographic Revenue Projections - 'Geographic Revenue- Argentina' is estimated at $1.46 billion, showing a significant increase of 68.9% year-over-year [5] - 'Geographic Revenue- Brazil' is expected to be $3.51 billion, indicating a 26.1% increase from the prior year [5] - 'Geographic Revenue- Fintech- Brazil' is projected at $1.40 billion, reflecting a 29.1% year-over-year change [6] Additional Metrics - 'Gross merchandise volume' is predicted to be $14.90 billion, compared to $12.65 billion from the previous year [7] - 'Total payment volume' is expected to reach $64.01 billion, up from $46.33 billion year-over-year [7] - 'Geographic Revenue- Commerce- Mexico' is estimated at $876.54 million, indicating a 9.7% increase from the prior-year quarter [7] Market Performance - Over the past month, shares of MercadoLibre have declined by 4.7%, contrasting with the Zacks S&P 500 composite's increase of 3.4% [8] - Currently, MELI holds a Zacks Rank 4 (Sell), suggesting potential underperformance in the near future [8]

Core Viewpoint - MercadoLibre, Inc. is set to release its financial results for the second fiscal quarter ending June 30, 2025, on August 4, 2025, and will host a video conference and conference call for investors and analysts [1]. Company Overview - MercadoLibre is the largest online commerce ecosystem in Latin America, recognized for its unique visitors and processed orders, and is also a leading fintech platform in the region [5]. - The company operates in 18 countries, including Argentina, Brazil, Mexico, Colombia, Chile, and Peru, focusing on enabling e-commerce and digital financial services [5]. E-commerce Platform - MercadoLibre provides a robust and safe environment for buyers and sellers, fostering a large e-commerce community in Latin America, which has a population exceeding 650 million and is experiencing rapid internet penetration and e-commerce growth [6]. Fintech Services - Through its fintech platform, MercadoPago, the company offers a comprehensive set of financial technology services, including digital accounts, debit cards, online payments, insurance, savings, investments, and credit lines for individuals, as well as payment processing services for merchants [7].

Group 1: Shopify - Shopify has shown remarkable growth, with shares increasing from a split-adjusted price of about $3 at its IPO in 2015 to around $120 today, while maintaining over 20% annual revenue growth [4][8] - The primary growth driver for Shopify is its merchant solutions, which include payment processing, shipping solutions, and capital lending, now accounting for 74% of its business [5][6] - Shopify's merchant solutions are a high-margin revenue stream, and the company is expanding its market presence by doubling the number of markets for Shopify Payments and launching AI-driven tools to assist merchants [6][8] Group 2: MercadoLibre - MercadoLibre is a leading e-commerce platform in Latin America, experiencing significant growth due to the underpenetration of e-commerce in the region, with a revenue increase of 64% year-over-year in Q1 2025 [9][10] - The company has a growing presence in financial services, with a 31% increase in monthly active users and a 74% increase in its credit portfolio, indicating strong growth potential [12] - MercadoLibre's stock has risen 41% year-to-date, driven by its well-managed business and low exposure to tariffs, positioning it for continued shareholder value creation [13] Group 3: Roku - Roku has faced challenges but is expected to report an operating profit by 2026, with Q1 2025 revenue growth of 16% to $1.02 billion and a 37% improvement in adjusted EBITDA [14][15] - The company has formed a new partnership with Amazon, enhancing its advertising capabilities and mitigating competition in the streaming distribution space [16] - Analysts anticipate 11% growth for Roku in Q2 2025, and if the company can exceed expectations and move towards profitability, there is significant upside potential for its stock [17]

Core Insights - MercadoLibre (MELI) is optimistic about Argentina's economic recovery, with analysts forecasting strong GDP growth in 2025 and 2026 as reforms take effect [1] - The company is strategically expanding its operations in Argentina, focusing on cross-border trade and enhancing its marketplace, particularly in the supermarket category [2] - MELI's financial arm, Mercado Pago, plans to apply for a banking license to establish the largest digital bank in Argentina and will start issuing credit cards in the second half of the year [3] Financial Performance - Argentina's revenues for MELI increased from $615 million (14.2% of total revenues) in Q1 2024 to $1.38 billion (23.3% of total revenues) in Q1 2025, more than doubling year-over-year [4] - The Zacks Consensus Estimate for second-quarter 2025 Argentina revenues is projected at $1.46 billion [4] Competitive Landscape - MercadoLibre faces competition from Amazon, which has introduced flat-rate and free shipping to Argentina, and DLocal, which plans to invest up to $100 million in the country [5][6] Stock Performance and Valuation - MELI shares have gained 40.8% year-to-date, outperforming the Zacks Internet-Commerce industry and the Zacks Retail-Wholesale sector [7] - The stock is currently trading at a forward 12-month Price/Sales ratio of 3.87X, compared to the industry's 2.17X [10] - The Zacks Consensus Estimate for second-quarter 2025 earnings is $12.01 per share, indicating a 14.60% year-over-year growth [12]

Core Insights - MercadoLibre (MELI) has established itself as the leading fintech acquiring engine in Latin America by focusing on small and informal sellers rather than large retailers [1][2] Group 1: Business Growth and Performance - MELI's Acquiring Total Payment Volume (TPV) reached $40.3 billion in Q1 2025, reflecting a 59% year-over-year FX-neutral growth [2] - Mexico and Brazil have experienced nine consecutive quarters of double-digit TPV growth, while Argentina's TPV surged 144% year-over-year, FX-neutral [2][4] - The Zacks Consensus Estimate for Q2 2025 total TPV is approximately $64 billion [4] Group 2: Competitive Landscape - MELI faces competition from StoneCo (STNE) and DLocal (DLO), both of which are expanding in key Latin American markets [5][6] - StoneCo processed R$133.5 billion ($24.7 billion) in TPV in Q1 2025, with a client base of 4.4 million [5] - DLocal achieved $8.1 billion in TPV in Q1 2025, marking a 53% year-over-year increase [6] Group 3: Strategic Focus and Future Outlook - MELI is concentrating on serving small and medium-sized businesses while enhancing support for micro-sellers [3] - The company is improving recurring payment features, adding point-of-sale devices, and providing business tools for inventory and billing [3] - By integrating credit, banking, payments, and software, MELI aims to facilitate digital participation for more individuals and businesses [4] Group 4: Stock Performance and Valuation - MELI shares have increased by 41.2% year-to-date, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector [7] - The stock is currently trading at a forward 12-month Price/Sales ratio of 3.90X, compared to the industry's 2.17X [11] - The Zacks Consensus Estimate for Q2 2025 earnings is $12.01 per share, indicating a 14.60% year-over-year growth [15]