MercadoLibre (MELI) Reports Net Revenue Growth from Mercado Pago in Q1 2025

MercadoLibre, Inc. (NASDAQ:MELI) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. In the broader fintech sector, the company’s Mercado Pago has emerged as a critical driver of growth. Its credit business has demonstrated strong expansion, primarily in Argentina and Brazil. MercadoLibre, Inc. (NASDAQ:MELI) saw net revenue from Mercado Pago in Q1 2025 grow by 43% in dollars YoY, touching $2.6 billion. The company’s rich transaction data, along with an established user base, offers a strong competitive advantage in providing tailored financial services.

MercadoLibre (MELI) Reports Net Revenue Growth from Mercado Pago in Q1 2025

A customer using their phone to access an online commerce platform.

With financial inclusion increasing throughout Latin America, MercadoLibre, Inc. (NASDAQ:MELI) can expand credit, payment, and investment products to an ever-evolving market of underserved consumers and businesses. Furthermore, the integration of fintech services with e-commerce platform helps create synergy, which can fuel user engagement and revenue growth throughout both segments. Providing the users a yield on deposits that broadly matches or exceeds benchmark rates with immediate liquidity remains critical. MercadoLibre, Inc. (NASDAQ:MELI)’s low cost-to-serve allows it to provide such yields at scale, while growing profitably.

MercadoLibre, Inc. (NASDAQ:MELI) demonstrated optimism in the performance of its credit portfolio, which saw a growth of 75% YoY to $7.8 billion in Q1 2025. The company sustained high growth rates and maintained delinquency at comfortable levels. Sands Capital, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:

“MercadoLibre, Inc. (NASDAQ:MELI) is the largest ecommerce and fintech ecosystem in Latin America by market share. The business delivered a strong fourth quarter in 2024, with operating income exceeding consensus estimates by 37 percent. This marked a significant rebound from 2024’s third quarter, when operating income fell short of expectations. The outperformance was largely driven by operations in Argentina, where 31 percent year-over-year revenue growth boosted earnings due to the region’s higher contribution margin relative to Brazil and Mexico. As of year-end, MercadoLibre served 100 million annual unique ecommerce customers and more than 60 million monthly active financial technology users.”

While we acknowledge the potential of MELI to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MELI and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.