MercadoLibre (MELI) Stock Rises After Strong Q4 Revenue Beat

TLDR

• MercadoLibre Q4 revenue hit $8.76B, up 45% year-over-year, beating estimates by ~$300M
• Gross merchandise volume rose 37% YoY; Mexico surged 49%, Brazil up 46%
• EPS of $11.03 missed expectations of $11.43 due to heavy AI and ad platform investment
• MELI+ subscription grew faster, now bundling Disney+, Netflix, HBO Max, and Apple TV+
• Stock fell ~5% overnight after earnings, but closed 3% higher Tuesday; up 4.29% on the day

MercadoLibre posted fourth-quarter revenue of $8.76 billion, up 45% from a year ago and roughly $300 million ahead of Wall Street estimates.

The strong top-line number pushed the stock up 3% on Tuesday, recovering from a nearly 7% drop on Monday — its worst single-day decline since November.

After hours, the stock slipped again, falling close to 5% as investors focused on a profit miss.

MercadoLibre, Inc., MELI

Earnings per share came in at $11.03, below the consensus estimate of $11.43 and down from $12.61 in the same quarter last year.

The gap was largely tied to spending on AI tools and advertising platform technology, areas the company is actively building out.

Mexico and Brazil Drive Volume Growth

Gross merchandise volume rose 37% year-over-year across the platform. Mexico led with a 49% jump, while Brazil climbed 46%.

Fulfillment penetration in Mexico hit a record high of nearly 80% in Q4, with free shipping coverage now on par with Brazil.

Total payment volume reached $83.7 billion for the quarter, a 42% increase year-over-year.

Net income came in at $559 million, and free cash flow was $763 million.

Subscription Tier Gets a Boost

MELI+, the company’s subscription plan, ended the year with accelerating subscriber growth.

Two moves drove that growth in Brazil: lowering the minimum order threshold for fast shipping from R$79 to R$19, and launching MELI+ Mega — a premium tier that bundles Disney+, Netflix, HBO Max, and Apple TV+.

The lower shipping threshold reduced churn and pushed conversion higher, particularly when the monthly subscription cost of R$9.90 was equal to or less than a single shipping fee.

MercadoLibre is leaning harder into AI across the platform. In Q4, it rolled out an AI-enhanced search experience in Argentina that draws on each buyer’s search and transaction history to surface relevant products.

The system adjusts results based on whether the buyer tends toward premium or value products — a more personalized approach than a standard keyword search.

On the seller side, the company’s Seller Assistant tool is helping onboard new merchants faster and push them toward higher reputation tiers.

It also generates short-format product videos from a single photo and handles customer service inquiries that would otherwise require human support.

Ad platform investment is also showing early returns. The company said spending on bidding algorithms, placements, and usability improvements is driving higher adoption among brands and top sellers.

Account managers for large brands are being supported by AI tools, while separate systems are engaging smaller, long-tail sellers to stimulate demand.

MercadoLibre described these as early steps in a broader effort to embed AI across the marketplace.

The stock closed at a 4.29% gain on Wednesday as investors weighed the revenue beat against the earnings miss.

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