Mastercard Q3 revenue rises 14% on payment network growth
Revenue of $9.81 billion was below the $9.94 billion consensus estimate compiled by Finnhub, while adjusted EPS of $5.31 was in line with the $5.32 estimate.
Key takeaways
- Mastercard Inc. (MA) said on Oct. 29 that third-quarter net revenue rose 14% to $9.81 billion, from $8.60 billion a year earlier, as payment network revenue grew 11%. Adjusted diluted earnings per share were $5.31, against $4.38 a year earlier. Net income was $4.6 billion.
Mastercard Inc. (MA) said in a third-quarter earnings release furnished with an 8-K on Oct. 29 that net revenue rose 14% from a year earlier to $9.81 billion, on both a reported and a currency-neutral basis.
Revenue was below the $9.94 billion consensus estimate compiled by Finnhub. Adjusted diluted earnings per share were $5.31, in line with the $5.32 consensus estimate compiled by Finnhub, and up from $4.38 a year earlier.
Mastercard powers economies and empowers people in more than 220 countries and territories, according to the company’s release.
Here's how the company did:
- Net revenue: $9.81 billion vs. $8.60 billion a year earlier, below the $9.94 billion estimate, according to Finnhub
- Adjusted diluted EPS: $5.31 vs. $4.38 a year earlier, in line with the $5.32 expected, according to Finnhub
- Net income: $4.6 billion vs. $3.9 billion a year earlier
- Diluted EPS (GAAP): $5.28 vs. $4.34 a year earlier
“Another strong quarter for Mastercard, delivering net revenue growth of 14%,” Mastercard CEO Michael Miebach said. “We’re not waiting for the future of commerce. We’re building it.”
For the first nine months, net revenue rose 15% to $27.5 billion, and diluted EPS was $14.59, up from $12.00 a year earlier.
Payment network and value-added services
Payment network net revenue increased 11%, as reported and on a currency-neutral basis. Gross dollar volume rose 7% on a local currency basis to $3.0 trillion, and cross-border volume grew 11%.
Payment network rebates and incentives increased 18%, the company said, primarily due to an increase in its drivers and new and renewed deals.
Value-added services and solutions net revenue increased 19%, as reported and on a currency-neutral basis. The company said the growth was driven primarily by its underlying drivers, strong demand across several of its services, and pricing.
As of Sept. 30, customers had issued 3.8 billion Mastercard and Maestro-branded cards, the company said.
Costs, charges and tax
Total operating expenses rose 11% to $3.9 billion, primarily due to higher general and administrative expenses. Excluding special items, adjusted operating expenses rose 12%.
The company recorded $74 million in pre-tax charges in the quarter, primarily due to settlements with merchants who opted out of the U.S. merchant class litigation.
The effective tax rate was 19.4%, versus 21.5% a year earlier. The adjusted effective tax rate was 20.1%, versus 21.4%, and the company said both were lower due to higher net discrete tax benefits and other tax impacts.
Capital returns
During the third quarter, Mastercard repurchased 5.3 million shares at a cost of $3.0 billion and paid $763 million in dividends.
Quarter-to-date through Oct. 26, the company repurchased 1.1 million shares at a cost of $0.6 billion, which leaves $4.9 billion remaining under approved share repurchase programs.