How MELI (MercadoLibre) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how an e-commerce and fintech giant like MercadoLibre makes money is essential for investors and anyone interested in the business of Latin American digital commerce. In this post, we break down MercadoLibre'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 MercadoLibre Overview

MercadoLibre operates as a leading e-commerce and fintech platform in Latin America, offering marketplace services, logistics through Mercado Envios, payments via Mercado Pago, and advertising solutions. Revenue comes primarily from commerce (marketplace fees, shipping, and ads) and fintech (transaction fees, credit services, and digital accounts). The company spans multiple segments across Brazil, Argentina, Mexico, and other markets, with fintech showing explosive growth.

Revenue Breakdown

• Total Revenue (Q3 2025): $6.476B (+21.9% YoY)
  • Total Commerce Revenue: $4.174B (64.5% of total, +33.0% YoY)
  • Total Fintech Revenue: $3.235B (50.0% of total, +48.9% YoY)
  • Growth is powered by expanding fintech penetration, higher transaction volumes, and commerce marketplace expansion in key Latin American markets.

Note: Revenue segments overlap due to integrated services, leading to combined totals exceeding 100%.

Gross Profit and Margins

• Gross Profit: $3.209B (49.6% gross margin)
  • Cost of Revenue: $3.267B (+13.7% YoY)
  • MercadoLibre maintains robust margins due to scalable digital business model, high-margin fintech fees, and operational efficiencies in logistics.
• Most costs come from fulfillment and shipping (commerce-related), transaction processing (fintech), and inventory handling.

Operating Income and Expenses

• Operating Income: $0.724B (+30.0% YoY, 11.2% margin)
• Operating Expenses: $4.000B (+-99.8% YoY)
  • R&D: $0.567B (+12.5% YoY, 8.8% of revenue) — focused on AI-driven recommendations, platform enhancements, and fintech innovations like digital wallets
  • SG&A: $0.563B (+0.0% YoY, 8.7% of revenue) — covers sales teams, administrative functions, and regional expansion efforts
  • MercadoLibre continues to prioritize innovation while maintaining efficiency through automated operations and cost controls in high-growth markets.

Net Income

• Pre-Tax Income: $0.636B (+22.3% YoY, 9.8% margin)
• Income Tax: Not specified
• Net Income: $0.851B (+114.4% YoY, 13.1% net margin)
• MercadoLibre converts a significant portion of sales into profit due to scalability, pricing power in fintech, and non-operating income contributions.

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What Drives MercadoLibre's Money Machine?

• Fintech Revenue: 50.0%+ of revenue / Powered by Mercado Pago's 48.9% YoY growth from credit origination, QR payments, and account fees
• Transaction Volume (TPV): Key metric with implied strength from 48.9% fintech surge, supporting high-margin fee income
• R&D Investments: Strategic focus on machine learning for fraud detection and personalized commerce experiences
• Future growth areas: International expansion and new credit products, though not yet fully profitable amid regulatory hurdles

Visualizing MercadoLibre'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 R&D and SG&A) taking the largest chunk.
• Even after significant investments, 13.1% of revenue drops to the bottom line.

Key Takeaways

• MercadoLibre's money comes overwhelmingly from commerce and fintech platforms
• High gross and net margins illustrate the power of MercadoLibre's asset-light, network-effect business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by fintech adoption and commerce volume increases

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FAQ About MercadoLibre's Income Statement

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

MercadoLibre generates over 64.5% of its revenue from Total Commerce Revenue. Fintech adds another 50.0% through overlapping high-growth services like Mercado Pago.

2. How profitable is MercadoLibre in Q3 2025?

MercadoLibre reported net income of $0.851B in Q3 2025, with a net margin of approximately 13.1%, reflecting strong profitability driven by fintech scale and gross margin expansion.

3. What are the largest expense categories for MercadoLibre?

The biggest expenses on MercadoLibre's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $0.567B in Q3 2025, as MercadoLibre prioritizes AI, fintech security, and logistics tech.

4. Why does Other Revenue by Product operate at a loss?

Other Revenue by Product, despite generating -$0.933B in revenue, reflects inter-segment adjustments. This is because MercadoLibre aggressively invests in ecosystem integration, believing these will drive long-term growth—even if the category shows negative contributions today.

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

MercadoLibre's effective tax rate in Q3 2025 was not specified, consistent with previous years. This moderate rate is primarily due to international structuring and tax benefits in Latin American operations.