MercadoLibre revenue hits $10.2 billion as payment volumes accelerate
The Latin American e-commerce and fintech giant reported that net revenues and financial income grew 50% year-over-year to $10.2 billion in the second quarter.
MercadoLibre (MELI) reported that net revenues and financial income grew 50% year-over-year to $10.2 billion in the second quarter. The result marked the fastest growth pace for the company in four years and represented an acceleration from the 49% growth recorded in the first quarter.
Top-line growth was supported by a broad acceleration in transaction activity. Total Payment Volume rose 56% year-over-year to $101 billion, up from 50% in the first quarter and 42.1% in the fourth quarter of the previous year. Gross Merchandise Volume grew 44% year-over-year to $21.9 billion, accelerating from 42% in the first quarter and 36.8% in the fourth quarter.
Regional performance diverged in the second quarter. FX-neutral GMV growth in Brazil accelerated to 39% year-over-year, compared to 38% in the first quarter and 35% in the fourth quarter. Conversely, FX-neutral GMV growth in Argentina decelerated to 38% year-over-year, down from 41% in the first quarter and 42% in the fourth quarter.
Profitability metrics faced pressure as the company expanded its footprint. Income from operations declined 17% year-over-year to $683 million, following a 20% decrease in the first quarter. The operating margin compressed 550 basis points year-over-year to 6.7%, down from 10.1% in the fourth quarter and 6.9% in the first quarter.
Within its fintech arm, monthly active users grew 30% year-over-year to 88 million. "Ecosystemic users," defined as those utilizing both the marketplace and Pago, grew 37% year-over-year. However, the credit card NIM compressed from breakeven in the second quarter of the previous year to -2.5% in the current quarter, due to an increase in new card issuance to 2.6 million from 1.6 million.
Other growth drivers included a 62% FX-neutral increase in advertising net revenue, which allowed the company to surpass a 10% share of the Latin American digital advertising market for the first time. Cross-border trade FX-neutral GMV grew 60% year-over-year, with triple-digit growth in Brazil, Argentina, and smaller markets.
Efficiency gains were noted in technical spending, as product development expenses as a percentage of net revenue fell to 7.2% from 8.4% a year earlier. This decline was driven by productivity gains from AI. Additionally, MELI+ subscriber growth reached 72% year-over-year.