How MELI (MercadoLibre) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a Latin American e-commerce and fintech leader like MELI (formerly MercadoLibre) makes money is essential for investors and anyone interested in the business of digital commerce and payments. In this post, we break down MELI's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick MELI Overview

MercadoLibre (MELI) operates the largest online commerce and payments ecosystem in Latin America. Its business model combines a marketplace platform (MercadoLibre), digital payments (Mercado Pago), logistics (Mercado Envios), and credit/fintech services. Revenue comes primarily from transaction fees on its marketplace, payment processing, shipping/logistics, and interest income from its growing fintech arm. The company reports two main business segments: Commerce (marketplace, classifieds, shipping) and Fintech (payments, credit, digital wallet).

Revenue Breakdown

• Total Revenue (Q3 2025): $4.2B (+38% YoY)
  • Commerce: $2.5B (60% of total)
  • Fintech: $1.7B (40% of total)
  • Growth is powered by surging fintech adoption, higher marketplace GMV, and expansion of credit and logistics services.

Gross Profit and Margins

• Gross Profit: $2.06B (49% gross margin)
  • Cost of Revenue: $2.14B (+36% YoY)
  • MELI maintains robust margins due to its scalable digital platform and increasing operational efficiencies in logistics and payments.
• Most costs come from logistics/shipping, payment processing, and credit losses.

Operating Income and Expenses

• Operating Income: $670M (+45% YoY, 16% margin)
• Operating Expenses: $1.39B (+32% YoY)
  • R&D: $320M (+28% YoY, 7.6% of revenue) — Focused on platform innovation, AI-driven personalization, and fintech product development.
  • SG&A: $1.07B (+34% YoY, 25.5% of revenue) — Includes marketing, sales, customer support, and administrative functions.
  • MELI continues to prioritize innovation and invest in growth while maintaining efficiency and expanding its ecosystem.

Net Income

• Pre-Tax Income: $650M (+48% YoY, 15.5% margin)
• Income Tax: $195M (30% effective tax rate)
• Net Income: $455M (+50% YoY, 10.8% net margin)
• MELI converts a significant portion of sales into profit due to its platform scalability, pricing power, and disciplined cost management.

What Drives MELI's Money Machine?

• Marketplace and Payment Processing: Over 80% of revenue comes from transaction fees on e-commerce sales and payment volumes.
• Total Payment Volume (TPV): $56B processed in Q3 2025 (+45% YoY), reflecting the rapid adoption of Mercado Pago both on and off-platform.
• Credit and Fintech Expansion: MELI invests heavily in consumer and merchant credit, digital wallet features, and insurance products, driving future growth.
• Logistics and New Verticals: Logistics (Mercado Envios) and new fintech services are expanding rapidly, though some remain in investment mode and not yet profitable.

Visualizing MELI's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and logistics) taking the largest chunk.
• Even after large investments in technology and logistics, 10.8% of revenue drops to the bottom line.

Key Takeaways

• MELI's money comes overwhelmingly from e-commerce transaction fees and payment processing
• High gross and net margins illustrate the power of MELI's platform-based, asset-light business model
• Heavy investment in fintech and logistics, balanced by efficiency in operating costs
• Ongoing growth is driven by fintech adoption, credit expansion, and logistics scale

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FAQ About MELI's Income Statement

1. What is the main source of MELI's revenue in 2025?

MELI generates over 80% of its revenue from e-commerce transaction fees and payment processing via its marketplace and Mercado Pago platforms. Additional revenue comes from logistics, credit, and fintech services.

2. How profitable is MELI in Q3 2025?

MELI reported net income of $455M in Q3 2025, with a net margin of approximately 10.8%, reflecting strong profitability driven by platform scale, fintech growth, and disciplined cost control.

3. What are the largest expense categories for MELI?

The biggest expenses on MELI's income statement are operating expenses, particularly Research & Development (R&D) at $320M in Q3 2025, and Sales, General & Administrative (SG&A) at $1.07B, as MELI prioritizes technology innovation and customer acquisition.

4. Why does Fintech operate at a loss?

Fintech, despite generating $1.7B in revenue, posted an operating loss of over $100M in Q3 2025. This is because MELI aggressively invests in credit expansion, digital wallet features, and new financial products, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does MELI's effective tax rate compare to previous years?

MELI's effective tax rate in Q3 2025 was 30%, consistent with previous years. This moderate rate is primarily due to the company's international structure and the mix of taxable income across Latin American jurisdictions.