Latin American e-commerce giant MercadoLibre posted a 44% net profit increase in the first quarter, reaching $494mn and surpassing analysts' expectations of $420.9mn, according to a public statement by the company. MercadoLibre’s total revenues hit $5.9bn, up 37% y/y and beating market forecasts of $5.51bn.

Argentina emerged as the standout market, with sales measured by Gross Merchandise Value (GMV) surging 126% on a foreign-exchange neutral basis, compared to the company's overall GMV growth of 40%. This robust performance restored Argentina to its position as MercadoLibre's second-largest market by revenue, behind Brazil but ahead of Mexico.

"We have seen improvements on our platforms (in Argentina) in the last few quarters, and they continued in the first quarter," Chief Financial Officer Martin de los Santos told Reuters, attributing the strong performance to a weaker comparison base, lower inflation, and reduced interest rates driving greater sales and credit demand.

The company's fintech operations also showed impressive growth, with its credit portfolio expanding 75% year-on-year to $7.8bn, primarily driven by credit cards. Despite this rapid expansion, the default ratio improved to 8.2% from 9.3% a year earlier.

MercadoLibre's earnings before interest and taxes rose 45% to $763mn, with the EBIT margin improving to 12.9% from 12.2% last year. These results continue the company's trend of consistently exceeding market expectations amid substantial investments across Latin America. Although some investors remain concerned about the impact of this expansion strategy on short-term profitability, consistent market growth could lay the foundation for long-term profitability.

The firm continued to demonstrate robust growth across its service ecosystem, with gross merchandise volume climbing 40% year-on-year to $13.3bn, supported by 66.6mn unique buyers. Total payment volume showed particularly impressive growth, rising 72% to $58.3bn.

On May 8, MercadoLibre shares (NASDAQ:MELI) rose sharply by as much as 10.6%, settling at a 6.7% gain by mid-afternoon trading. The Latin American e-commerce and financial technology firm's quarterly financial report significantly exceeded market projections, driving the rally.