Mastercard Continues Growing Steadily
Net income grew slower than revenue, but operating income was up at a higher rate.
Total card issuance continues to climb as well, with revenue growing even faster on increased utilization.
Here's our initial take on Mastercard's (NYSE: MA) first-quarter financial results.
Metric
Q1 FY24
Q1 FY25
Change
vs. Expectations
Revenue
$6.3 billion
$7.3 billion
+14%
Beat
Earnings per share
$3.22
$3.59
+11.5%
Beat
Gross dollar volume (change % in local currency)
$2.3 trillion
$2.4 trillion
+9%
n/a
Total Mastercard-branded cards
2.97 billion
3.2 billion
+8%
n/a
Another quarter brought another period of low-teens revenue growth for Mastercard. It's one of the largest issuers of credit, debit, and other payment cards and the operator of the networks those cards run on. Revenue was up 14% to $7.3 billion, while gross dollar volume was up 9% (on a currency-neutral basis) to $2.42 trillion.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Mastercard continues to see solid growth in total cards being used too. Active cards surpassed 3.5 billion in the quarter, up 6% over the past year, while switched transactions increased 9% to 40.1 billion. In other words, the company continues to see strong and growing demand for its cards and access to its payments network, and cardholders are using their cards more often and for larger transactions.
One more look at revenue and where it's growing: Payment network revenue was up 13%, while value-added services and solutions revenue was up 16%. This part of the business is helping drive better profitability. It's also worth noting that on a currency-neutral basis, net revenue was up 17%.
Further down the operating statement, you'll note that net income increased at 11% on a GAAP basis and 15% adjusted. Both are lower rates than revenue growth and not typical of what we usually see and expect from Mastercard. However, a quick look at the operating statement allays those concerns. Operating expenses increased 13%, in line with revenue growth, while operating income was up 15% and pre-tax income was up 13%.
As investors have come to expect, Mastercard shares were up modestly ahead of the market open following the earnings release. Its results were slightly better than expected (as they often are), and management was optimistic in its guidance, which was not adjusted substantially in lieu of the ongoing tariff and trade negotiations that sent the U.S. economy into negative growth in the first quarter.
Mastercard's business, of course, is leveraged to the global economy, and in the first quarter, the ongoing impacts of the trade dispute between the U.S. and the rest of the world had not fully begun. As we move further into periods in which tariffs could impact consumer spending patterns globally, there is some near-term reason for caution.
But as CEO Michael Miebach reminded us in his comments on the quarter, Mastercard is a "diversified, resilient business" that's built to navigate these sorts of environments and thrive on the other side.
Earnings press release and presentation
Investor relations page
Before you buy stock in Mastercard, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Mastercard wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $610,327!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $667,581!*
Now, it's worth noting Stock Advisor's total average return is 882% — a market-crushing outperformance compared to 161% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of April 28, 2025
Jason Hall has positions in Mastercard. The Motley Fool has positions in and recommends Mastercard. The Motley Fool has a disclosure policy.
Mastercard Continues Growing Steadily was originally published by The Motley Fool
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 minutes ago
- Yahoo
NVO: Novo Nordisk Stock Climbs After Major FDA Approval
Aug 1 - Novo Nordisk (NYSE:NVO) gained nearly 3% in Friday morning trading after the company secured expanded U.S. approval for its Alhemo injection. The therapy can now help prevent or reduce bleeding episodes in adults and children 12 and older with hemophilia A or B. Warning! GuruFocus has detected 1 Warning Sign with NVO. Previously, Alhemo was only authorized for patients with hemophilia A or B who developed inhibitors. The new decision from the U.S. Food and Drug Administration followed a late?stage clinical trial that demonstrated the drug's safety and ability to lower bleeding risk in a broader patient group. Analysts say this approval could significantly expand Alhemo's market potential. The hemophilia space is becoming increasingly competitive with gene therapies and new clotting factor treatments, but Novo Nordisk's broader label should reinforce its rare disease portfolio. The company expects Alhemo to contribute to revenue growth in the second half of 2025 as more patients gain access. Investors will watch whether this momentum continues into upcoming quarters as the therapy reaches a larger base of hemophilia patients. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
3 minutes ago
- Business Wire
Lazard Announces Total Consideration for Lazard Group LLC's Cash Tender Offer for Its 3.625% Senior Notes Due 2027
NEW YORK--(BUSINESS WIRE)--Lazard, Inc. (NYSE: LAZ) announced today the Total Consideration as set forth in the table below in respect of the previously announced cash tender offer (the 'Tender Offer') of its subsidiary Lazard Group LLC ('Lazard Group') for any and all of its outstanding 3.625% Senior Notes due March 1, 2027 (the 'Notes'). The Tender Offer is being made upon the terms and conditions in the Offer to Purchase dated July 28, 2025. The Tender Offer will expire today at 5:00 p.m. (New York City time), unless extended or terminated as described in the Offer to Purchase (such time and date, as they may be extended, the 'Expiration Time'). Holders of the Notes are urged to carefully read the Offer to Purchase and Notice of Guaranteed Delivery before making any decision with respect to the Tender Offer. As previously announced, in order to be eligible to receive the 'Total Consideration,' holders must (i) validly tender their Notes on or prior to the Expiration Time or (ii) deliver a properly completed Notice of Guaranteed Delivery and all other required documents at or prior to the Expiration Time and validly tender their Notes at or prior to 5:00 p.m. (New York City time) on the second business day after the Expiration Time pursuant to guaranteed delivery procedures. The Total Consideration for each $1,000 principal amount of Notes validly tendered and not validly withdrawn was determined in the manner described in the Offer to Purchase by reference to the fixed spread over the yield to maturity based on the bid side price of the UST Reference Security listed below, calculated by the Dealer Managers (as defined below) for the Tender Offer as of 2:00 p.m. (New York City time) today, the date on which the Tender Offer is currently scheduled to expire, and is set forth in the table below. In addition to the Total Consideration, accrued and unpaid interest up to, but not including, the Settlement Date (as defined below) will be payable in cash on all validly tendered and accepted Notes. Interest will cease to accrue on the Settlement Date for all Notes accepted for purchase in the Tender Offer, including any such Notes tendered through guaranteed delivery procedures. As a result, Notes tendered through the guaranteed delivery procedures will not receive accrued interest from the Settlement Date through the Guaranteed Delivery Settlement Date (as defined below), which is expected to be two business days after the Settlement Date. Payment for Notes validly tendered in the Tender Offer and accepted by Lazard Group for purchase will be made on the date referred to as the 'Settlement Date' or, in the case of Notes tendered through guaranteed delivery procedures, the 'Guaranteed Delivery Settlement Date.' The Settlement Date is expected to occur on the next business day following the Expiration Time, and the Guaranteed Delivery Settlement Date is currently expected to occur on the third business day following the Expiration Time. The closing of the Tender Offer is subject to the satisfaction or waiver of certain conditions as set forth in the Offer to Purchase. Lazard Group reserves the right, subject to applicable law, to (i) waive any and all conditions to the Tender Offer, (ii) extend the Expiration Time, (iii) amend the Tender Offer in any respect (including, without limitation, to change the fixed spread), or (iv) terminate the Tender Offer on or prior to the Expiration Time and return the Notes tendered pursuant thereto, in each case by giving written or oral notice of such extension, amendment, or termination to Global Bondholder Services Corporation, the tender agent (in such capacity, the 'Tender Agent'). This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the Notes. The Tender Offer is being made solely by means of the Offer to Purchase and Notice of Guaranteed Delivery dated July 28, 2025. The Tender Offer is void in all jurisdictions where it is prohibited. In those jurisdictions where the securities, blue sky, or other laws require the Tender Offer to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on behalf of Lazard Group by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdictions. Citigroup Global Markets Inc. is acting as the lead dealer manager and Lazard Frères & Co. LLC is acting as co-dealer manager (together, the 'Dealer Managers') for the Tender Offer. Requests for documents may be directed to Global Bondholder Services Corporation, the information agent (in such capacity, the 'Information Agent'), by telephone at (212) 430-3774, in writing at Attn: Corporate Actions, 65 Broadway—Suite 404, New York, New York 10006 or by email at contact@ Copies of the Offer Documents are also available at the following website: Questions regarding the Tender Offer may be directed to Citigroup Global Markets Inc. by telephone at (800) 558-3745 (toll-free) or (212) 723-6106 (collect) or in writing at Attn: Liability Management Group, 388 Greenwich Street, Trading 4th Floor, New York, New York 10013. None of Lazard Group or its affiliates, their respective boards of directors, the Dealer Managers, the Tender Agent, the Information Agent or the trustee for the Notes makes any recommendation as to whether holders should tender any of their Notes. Holders must make their own decision as to whether to tender any of their Notes and, if so, the principal amount of their Notes to tender. About Lazard Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. Cautionary Note Regarding Forward-Looking Statements This press release contains 'forward-looking statements' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as 'may,' 'might,' 'will,' 'should,' 'could,' 'would,' 'expect,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'predict,' 'potential,' 'target,' 'goal,' 'pipeline,' or 'continue,' and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A 'Risk Factors,' and also discussed from time to time in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including the following: Adverse general economic conditions or adverse conditions in global or regional financial markets; Changes in international trade policies and practices, including the implementation of tariffs, proposed further tariffs, and responses from other jurisdictions, and the economic impacts, volatility and uncertainty resulting therefrom; A decline in our revenues, for example due to a decline in overall mergers and acquisitions ('M&A') activity, our share of the M&A market or our assets under management ('AUM'); Losses caused by financial or other problems experienced by third parties; Losses due to unidentified or unanticipated risks; A lack of liquidity, i.e., ready access to funds, for use in our businesses; Competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels; and Changes in relevant tax laws, regulations or treaties or an adverse interpretation of those items. These risks and uncertainties are not exhaustive. Our SEC reports describe additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. As a result, there can be no assurance that the forward-looking statements included in this release will prove to be accurate or correct. Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this release to conform our prior statements to actual results or revised expectations and we do not intend to do so. Lazard, Inc. is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, and other social media sites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of AUM in various mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frères Gestion SAS.
Yahoo
7 minutes ago
- Yahoo
Mastercard Q2 Earnings Beat Estimates on Robust Consumer Spending
Mastercard Incorporated MA reported second-quarter 2025 adjusted earnings of $4.15 per share, which surpassed the Zacks Consensus Estimate by 2.5%. The bottom line improved 16% year over year. Net revenues advanced 16.8% year over year to $8.1 billion. The top line beat the consensus mark by 1.9%. The strong quarterly results reflect benefits from increased gross dollar volume, cross-border volumes, strong demand for value-added services and growth in transactions due to robust consumer spending on travel and leisure. However, the upside was partly offset by escalating operating expenses and higher rebates and incentives. Mastercard Incorporated Price, Consensus and EPS Surprise Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote Mastercard's Q2 Operational Performance Gross dollar volume or GDV (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) increased 9% on a local-currency basis to $2.6 trillion. The metric beat the Zacks Consensus Estimate by 1.9%. Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) rose 15% on a local currency basis. Switched transactions, which indicate the number of times a company's products have been used to facilitate transactions, improved 10% year over year to 43.5 billion. The metric missed the consensus mark by a whisker. Value-added services and solutions' net revenues of $3.2 billion advanced 23% year over year. Also, the same beat our model estimate of $2.9 billion. The year-over-year growth was driven by acquisitions, higher demand for consumer acquisition and engagement, as well as business and market insight services. Also, the scaling of its security and digital and authentication solutions and improving pricing strategies, aided the metric. Payment network rebates and incentives increased 17% year over year as a result of new and renewed deals. Mastercard's clients issued 3.6 billion Mastercard and Maestro-branded cards as of June 30, 2025. Adjusted operating expenses escalated 15% year over year to $3.3 billion due to increased general, administrative, advertising and marketing expenses. Adjusted operating income was $4.9 billion, which grew 18% year over year and beat our model estimate of $4.7 billion. The adjusted operating margin improved 50 basis points year over year to 59.9%. Mastercard's Financial Position (As of June 30, 2025) Mastercard exited the second quarter with cash and cash equivalents of $9 billion, which increased from the 2024-end level of $8.4 billion. Total assets of $51.4 billion increased from the $48.1 billion figure at 2024-end. Long-term debt amounted to $19 billion, up from the $17.5 billion figure as of Dec. 31, 2024. Total equity of $7.9 billion rose from the 2024-end level of $6.5 billion. Mastercard generated cash flows from operations of $7 billion in the first half of 2025, which advanced from the prior-year period's $4.8 billion. Mastercard's Capital Deployment Update Mastercard bought back 4.2 million shares for $2.3 billion in the second quarter. Quarter to date through July 28, it bought back another 1.8 million shares for $1 billion, leaving a buyback capacity of $9.3 billion. Mastercard paid out dividends worth $691 million in the quarter under review. Mastercard's 3Q25 Guidance Management projects adjusted net revenues to register high end of mid-teens growth on a year-over-year basis in the third quarter of 2025, while adjusted operating expenses are also anticipated to record high end of mid-teens growth. Mastercard's 2025 View Management now estimates adjusted net revenues to witness high end of mid-teens growth in 2025 from the 2024 figure. Adjusted operating expenses are also forecasted to witness high end of mid-teens growth from the year-ago figure. Mastercard currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. How Did Mastercard's Peers Perform? MA's peers like Visa Inc. V and American Express Company AXP have also reported results for the June quarter of 2025. Here's how they have performed: Visa reported third-quarter fiscal 2025 EPS of $2.98, which beat the Zacks Consensus Estimate of $2.86 by 4.2%, thanks to higher processed transactions, payments and cross-border volumes. However, the upside was partly offset by Visa's increased operating expenses. American Express reported second-quarter 2025 EPS of $4.08, which beat the Zacks Consensus Estimate by 5.7% on growing Card Member spending and a premium customer base. Rising revolving loan balances and continued robust card fee growth aided its performance. American Express' results were partially offset by escalating customer engagement and operating costs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA) : Free Stock Analysis Report Visa Inc. (V) : Free Stock Analysis Report American Express Company (AXP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
