Latin American e-commerce and fintech company MercadoLibre (NASDAQ: MELI) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 37% year on year to $5.94 billion. Its GAAP profit of $9.74 per share was 17.8% above analysts’ consensus estimates.
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MercadoLibre (MELI) Q1 CY2025 Highlights:
- Revenue: $5.94 billion vs analyst estimates of $5.48 billion (37% year-on-year growth, 8.3% beat)
- EPS (GAAP): $9.74 vs analyst estimates of $8.27 (17.8% beat)
- Adjusted EBITDA: $935 million vs analyst estimates of $784.9 million (15.8% margin, 19.1% beat)
- Operating Margin: 12.9%, in line with the same quarter last year
- Free Cash Flow Margin: 12.8%, down from 43.2% in the previous quarter
- Unique Active Buyers: 67 million, up 13.5 million year on year
- Market Capitalization: $113 billion
Company Overview
Originally started as an online auction platform, MercadoLibre (NASDAQ: MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, MercadoLibre grew its sales at an incredible 41.3% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, MercadoLibre reported wonderful year-on-year revenue growth of 37%, and its $5.94 billion of revenue exceeded Wall Street’s estimates by 8.3%.
Looking ahead, sell-side analysts expect revenue to grow 21.1% over the next 12 months, a deceleration versus the last three years. We still think its growth trajectory is attractive given its scale and suggests the market is forecasting success for its products and services.
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Unique Active Buyers
User Growth
As an online marketplace, MercadoLibre generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
Over the last two years, MercadoLibre’s unique active users, a key performance metric for the company, increased by 19.8% annually to 67 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.
In Q1, MercadoLibre added 13.5 million unique active users, leading to 25.2% year-on-year growth. The quarterly print was higher than its two-year result, suggesting its new initiatives are accelerating user growth.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns in transaction fees from each user. ARPU also gives us unique insights into a user’s average order size and MercadoLibre’s take rate, or "cut", on each order.
MercadoLibre’s ARPU growth has been exceptional over the last two years, averaging 16.8%. Its ability to increase monetization while growing its unique active users at an impressive rate reflects the strength of its platform, as its users are spending significantly more than last year.
This quarter, MercadoLibre’s ARPU clocked in at $88.58. It grew by 9.4% year on year, slower than its user growth.
Key Takeaways from MercadoLibre’s Q1 Results
We were impressed by how significantly MercadoLibre blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. A small blemish was that its unique active buyers missed. Still, this print had some key positives. The stock traded up 8.8% to $2,471 immediately after reporting.
MercadoLibre had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
