Mastercard is a global company that connects people and businesses by making payments easy and secure. Founded in 1966 and based in New York, Mastercard helps people pay for things in over 210 countries. They aim to reduce the use of cash and make electronic payments safer and more convenient. Mastercard offers different types of cards like credit, debit, and prepaid, and continues to improve digital payment methods.
Besides payments, Mastercard provides extra services like fraud protection, data analysis, rewards programs, and business advice. They also work to help people who don’t have access to financial services. By using new technology and partnerships, Mastercard aims to support economic growth and help people and businesses around the world.
Mastercard Fiscal Q4 2024
Mastercard (MA) Q4 2024 earnings reported a beating estimated net revenue increase of 14%, or 16% on a currency-neutral basis. This growth was primarily driven by the expansion of the payment network and value-added services and solutions. The impact of acquisitions on net revenue was minimal.
Fourth Quarter 2024 Highlights:
- Net Revenue: Increased by 14% due to growth in the payment network and value-added services and solutions.
- Payment Network Revenue: Grew by 13%, driven by a 12% increase in gross dollar volume, 20% rise in cross-border volume, and 11% growth in switched transactions.
- Value-Added Services: Revenue grew by 16%, driven by consumer acquisition, engagement services, business and market insights, and security solutions.
- Operating Expenses: Rose by 12%; adjusted operating expenses increased by 14% (15% currency-neutral) due to higher general and administrative expenses.
- Other Income: Favorable by $4 million, mainly due to previous losses, increased investment income, and net gains on equity investments.
- Effective Tax Rate: Lowered to 14.1% due to a discrete tax benefit and changes in the geographic mix of earnings.
- Card Issuance: 3.5 billion Mastercard and Maestro-branded cards issued as of December 31, 2024.
Full Year 2024 Highlights:
- Net Revenue: Increased by 12%, driven by growth in the payment network and value-added services and solutions.
- Payment Network Revenue: Grew by 10%, driven by an 11% increase in gross dollar volume to $9.8 trillion, 18% rise in cross-border volume, and 11% growth in switched transactions.
- Value-Added Services: Revenue increased by 17%, driven by consumer acquisition, engagement services, business and market insights, and security solutions.
- Operating Expenses: Increased by 13% due to higher general and administrative expenses and litigation provisions; adjusted operating expenses rose by 11% (currency-neutral).
- Other Income: Favorable by $41 million due to increased investment income and lower net losses on equity investments.
- Effective Tax Rate: Lowered to 15.6% (adjusted 16.2%) due to a valuation allowance in 2023 and changes in the geographic mix of earnings.
Mastercard repurchased 6.5 million shares at a cost of $3.4 billion and paid $606 million in dividends. Also, the company repurchased 23.0 million shares at a cost of $11.0 billion and paid $2.4 billion in dividends.
Boards Statements
Michael Miebach, the CEO of Mastercard, reported strong results for the quarter, with net revenue growth of 14% year-over-year. Mastercard’s diverse capabilities in payments, services, and solutions, including the acquisition of Recorded Future this quarter, set the company apart and position it well for long-term growth. This value is seen in the continued momentum of Mastercard’s new and expanded wins.
Impact on the Stock Market
Mastercard’s strong Q4 2024 earnings report boosted its stock price. The company reported adjusted earnings per share of $3.82, beating expectations. This led to a 4.7% increase in stock price.
Analysts expect further growth in 2025, which could keep pushing the stock price up. However, market conditions and investor sentiment will play a key role in its performance.
