MercadoLibre shares rally after record quarter of profit

Shares of MercadoLibre Inc rallied in post-market trading after the Latin American e-commerce and fintech giant’s profit far surpassed estimates.

Net income in the fourth quarter was a record US$639 million compared with a US$406 million median estimate from analysts, according to data compiled by Bloomberg. The US$6.1 billion of revenue in the quarter also beat expectations. The stock jumped as much as 14 percent in after-hours trading.

The strong finish to the year comes after a third quarter that disappointed investors prompting a selloff after multiple profit metrics missed on the back of increased investments in logistics and credit. Shares in Latin America’s most valuable company, with a market value of about US$107 billion, have rebounded, gaining 24 percent year-to-date as of the official close.

“It was a very good quarter. We thought we had a very good quarter last quarter as well. It doesn’t go in a straight line,” chief financial officer Martín De Los Santos said in an interview. “This was probably the best year in our history in terms of financial results, operational results, the improvements that we have made on the product.”

MercadoLibre’s full year profit jumped to US$1.9 billion in 2024 on US$21 billion of revenue, which rose 38 percent year-on-year, according to the release.

For the fourth quarter, while gross merchandise volume of US$14.5 billion came in below estimates, the total payment volume of US$59 billion was largely in line with expectations.

The company which gets the bulk of its business from Brazil, Mexico and Argentina grew its assets under management to US$10.6 billion and its credit book to US$6.6 billion with the credit card portion of the portfolio more than doubling in the past year, according to a press release.

Unique active buyers on the commerce platform rose to 67 million people while monthly active fintech users jumped to 61 million.

The advertising unit, one of its newest and fastest growing businesses, rose 41 percent year-on-year to reach 2.1 percent of GMV.

The firm, which has about 84,000 direct employees, exceeded the mark of 100 million annual active buyers on its commerce platform during 2024, logging 57 purchases and 360 transactions every second, according to the release.