MercadoLibre, Inc. Q4 FY2025 earnings call

• Robust operating trends with fourth quarter net revenues growth of 45% year-over-year. • Commerce business acceleration in Brazil and Mexico with GMV growth. • AI investments driving revenue in advertising and acquiring. For example, AI is powering advertising bidding algorithms and automated campaign tools, and helping in acquiring sales force in Brazil and Mexico. • Mercado Pago AI assistant solving 87% of interactions without human support. • Historic milestone in fintech with leading NPS and growth in credit portfolio and assets under management.

Commerce: In Brazil, GMV grew 35% year-over-year alongside a 45% increase in sold items. In Mexico, GMV also grew 35%. Advertising: Grew 67% driven by AI-powered bidding algorithms and automated campaign tools. Fintech: Mercado Pago holds the leading Net Promoter Score in Brazil, Mexico, Argentina and Chile. Monthly active users are growing close to 30% for 10 consecutive quarters. Credit portfolio nearly doubled year-over-year to $12.5 billion, including almost 3 million new credit cards issued in Q4 alone. Assets under management are close to $19 billion growing at 78% year-over-year.

• Confident in investments strengthening the MercadoLibre ecosystem and expanding the long-term growth runway. • Expect all business units to continue growing at a fast pace as investments are already generating results and unlocking long-term value. • Comfortable with the current levels of investments in the ecosystem as they deepen competitive advantages.

• Margin compression due to investments in areas like shipping, credit card expansion, etc. • Uncertainty regarding agentic commerce potentially causing disintermediation and changes in ad monetization. • Potential impact of regulatory changes on interchange rates in Mexico (though currently on hold).

Q: Andrew Ruben inquired about the investment cycle; A: Martin de Los Santos discussed various investments and their impact on margins, including details on different business units' growth and margin implications.

Q: Irma Sgarz asked about Argentina margin and AI in ad monetization; A: Martin de Los Santos addressed Argentina margin pressures related to fulfillment and provisions, and Ariel Szarfsztejn talked about AI's role in ad monetization and agentic commerce's impact.

Q: Bob Ford questioned on Pago agent and marketplace agentic solutions; A: Osvaldo Giménez talked about Mercado Pago AI assistant and Ariel Szarfsztejn discussed marketplace AI features.

Q: Marcelo Santos asked about advertising growth drivers; A: Ariel Szarfsztejn discussed broad-based advertising growth drivers including various tools and initiatives.

Q: Rodrigo Gastim inquired on Brazil margin and operating leverage; A: Martin de Los Santos on Brazil investments, market share gains, and long-term margin confidence.

Q: Josh Beck asked on shipping threshold and unit costs; A: Ariel Szarfsztejn on shipping threshold results and unit cost sustainability.

Q: Geoffrey Elliott asked on Brazil shipping model change; A: Ariel Szarfsztejn on shipping model change and future impact assessment.

Q: Kaio Prato asked on Mercado Pago deposits and NPL; A: Osvaldo Giménez on deposits usage and NPL impact.

Q: Neha Argawala asked on loan yields and risk; A: Osvaldo Giménez and Martin de Los Santos on loan yields, risk management, and portfolio health.

Q: Donnie Tiger asked on sales/marketing and doubtful accounts; A: Martin de Los Santos and Osvaldo Giménez on sales/marketing investments and credit growth drivers.

Q: Craig Maurer asked on credit card lift; A: Osvaldo Giménez on credit card growth and synergy with marketplace.

Q: Marvin Fong asked on credit card issuance and provision; A: Osvaldo Giménez and Martin de Los Santos on credit card issuance in different markets and provisioning.

Q: Jamie Friedman asked on acquiring TPV and interchange caps; A: Osvaldo Giménez on acquiring TPV mix and Mexico interchange cap status.

Q: Joao Soares asked on risk of agentic commerce disintermediation; A: Ariel Szarfsztejn on agentic commerce risks and MercadoLibre's position in handling them