An analysis of S&P Global Ratings' upgrade to 'BBB-' and the financial strength of Latin America's digital leader.
S&P Global Ratings Upgrade
BB+
➜BBB-
Outlook: Stable
The upgrade reflects significantly improved credit metrics and a commitment to a conservative balance sheet, officially moving MELI into investment-grade territory.
Credit metrics have improved significantly, with S&P forecasting adjusted Debt-to-EBITDA to remain healthy at 1.2x-1.7x through 2027.
The integrated flywheel of Commerce, Fintech, and Logistics creates a virtuous cycle, deepens customer loyalty, and raises switching costs.
Adjusted EBITDA swung from a loss to nearly $3.1 billion by 2024, proving the monetization capacity of the platform at scale.
Management is committed to maintaining Debt-to-EBITDA below 2.0x and Debt-to-Tangible-Equity below 1.0x, ensuring financial prudence.
Strong and consistent growth in Gross Merchandise Volume (GMV) and Marketplace Revenue has solidified MELI's position as the leading e-commerce platform in Latin America.
Total Payment Volume (TPV) and Fintech Revenue growth have outpaced commerce, showcasing Mercado Pago's successful expansion into the broader economy.
A Monumental Shift
In just a few years, MercadoLibre has transformed its financial profile, moving from an operating loss to a powerhouse of profitability. This chart illustrates the dramatic swing in S&P-adjusted EBITDA, a key factor in the credit rating upgrade. This trend proves the company's ability to monetize its platform through higher take rates, shipping efficiencies, and the growth of high-margin services like advertising.
S&P expects solid revenue growth to continue, while EBITDA margins may slightly narrow due to strategic investments in logistics and market share defense.
Despite rising investment and growth in the credit business, adjusted Debt-to-EBITDA is projected to stay well below the 2.0x threshold, a cornerstone of the stable outlook.
The marketplace remains the core, but high-growth fintech services (acquiring and credit) are becoming increasingly significant contributors to the top line.
Growing buyer base seeks wide product selection.
Seamless checkout with Mercado Pago.
Offer credit (Mercado Crédito) & fast delivery (Mercado Envios).
More buyers & sellers join, enhancing the ecosystem and increasing switching costs.
A significant portion of EBITDA comes from Brazil and Argentina, exposing the company to macroeconomic and currency volatility in these high-risk markets.
Exposure to low-rated sovereigns could weaken financial performance and strategic execution.
Aggressive growth in the lending portfolio carries inherent risks of asset quality deterioration and larger credit losses if underwriting weakens.
Failure to meet growth forecasts or defend against competitors like Amazon and Shein could pressure margins and leverage metrics.