MercadoLibre Inc (MELI) Q1 2025 Earnings Call Highlights: Strong Growth in E-commerce and ...
Fintech Active Users: Grew over 30% year on year, reaching 64 million.
Credit Portfolio Growth: Increased by 75% year on year.
Argentina Revenue: US dollar revenues more than doubled year on year.
Monthly Active Users: Continued growth above 30% year on year, reaching 64 million in Q1 2025.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
MercadoLibre Inc (NASDAQ:MELI) reported strong growth in both e-commerce and fintech, maintaining the rapid pace of net revenue growth from 2024.
The company achieved all-time high brand preference metrics in major markets like Brazil, Mexico, Argentina, and Chile.
Fintech services saw a significant increase in active users, growing over 30% year on year, reaching 64 million users.
The credit portfolio grew by 75% year on year while maintaining delinquency at comfortable levels, with improvements in scoring models.
Argentina performed exceptionally well, with US dollar revenues more than doubling year on year, contributing to faster income growth than revenue.
Negative Points
There is concern about the sustainability of growth trends in Argentina, with questions about the impact of macroeconomic stabilization.
The company faces aggressive competition in Mexico, particularly in the technology vertical, affecting growth in that category.
Margins in Brazil and Mexico compressed by roughly 5 percentage points due to investments in logistics and credit card growth.
The company is experiencing short-term margin pressure from strategic investments in shipping and logistics infrastructure.
There are concerns about the impact of fintech competition in Mexico, with MercadoLibre Inc (NASDAQ:MELI) needing to adapt to evolving market dynamics.
Q & A Highlights
Q: Can you discuss the sustainability of the growth trends in Argentina, particularly the 52% growth in items sold and the strong contribution margin? A: Ariel Szarfsztejn, Executive Vice President - Commerce, explained that the growth in Argentina is due to a recovery in demand and market share gains. The company has been enhancing its value proposition through improved shipping, pricing, and financing options. Martin de Los Santos, CFO, added that macroeconomic stabilization and strategic investments have also contributed to profitability improvements in Argentina.
Q: What drove the solid growth in 1P GMV, and how are margins evolving in this area? A: Ariel Szarfsztejn noted that the growth in 1P GMV was driven by improved selection, price competitiveness, and technological advancements in operations. While supermarkets are growing, the growth is spread across various categories, with consumer electronics holding a significant share. Margins in supermarkets have improved, allowing for continued investment in this category.
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