Perspectivas, análisis y más

Mastercard Inc. (MA), a global giant in the payment technology sector, continues to reinforce its position as a leader in the financial industry with its impressive Q3 2024 earnings report. As a key player facilitating debit and credit card payments worldwide, Mastercard’s ability to consistently surpass market expectations showcases its resilience and adaptability in a rapidly evolving economic landscape. The company’s robust performance, marked by significant revenue growth and steady profitability, highlights its strategic focus on innovation and diversified services. 

In this blog, we get to know about Mastercard’s latest financial achievements, explore the key factors driving its growth, and analyze how its forward-looking strategies set the stage for sustained success in the competitive payment technology market.

About Mastercard

Mastercard is a global financial services company that focuses on facilitating electronic payment transactions between consumers, merchants, and financial institutions. Founded in 1966, it operates in more than 210 countries and territories, making it one of the leading payment technology companies in the world.

Headquartered in Purchase, New York, Mastercard runs a payment network that ensures secure and easy transactions for credit, debit, and prepaid cards. It also expands its services with mobile payments, digital wallets, and fraud protection solutions.

Mastercard aims to connect and empower a digital economy by making transactions safe, simple, and accessible for everyone, everywhere.

Mastercard Quarterly Earnings Performance

Mastercard exceeded expectations in Q3 2024, reporting $3.89 EPS, a 4.29% surprise over estimates, and showed consistent quarterly earnings growth.

Earnings Per Share (EPS)

• Reported EPS for Q3 2024 was $3.89, surpassing the Zacks Consensus Estimate of $3.73. This represents a 4.29% earnings surprise.
• In comparison, the company reported an EPS of $3.39 in the same quarter last year, reflecting steady growth.

Earnings Surprise History

• Mastercard has consistently outperformed consensus EPS estimates over the last four quarters, reflecting the resilience of its business model.

Net Income

• Net income for the quarter was $3.263 billion, marking a 2.03% year-over-year increase.

Mastercard Revenue Highlights

With $7.37 billion in revenue this quarter, up 12.8% year-over-year, Mastercard demonstrated strong growth across its payment network and value-added services.

Quarterly Revenue

• Mastercard reported revenues of $7.37 billion for the quarter, a 12.8% increase year-over-year.
• This figure also exceeded the Zacks Consensus Estimate by 1.60%.

Annual Revenue Growth

• Revenue for the twelve months ending September 30, 2024, was $27.226 billion, reflecting a 11.73% year-over-year increase.
• Annual revenue for 2023 stood at $25.098 billion, showcasing a growth rate of 12.87% compared to 2022.

Revenue Composition

• Revenue from Mastercard's payment network increased by 11%, while value-added services and solutions contributed significantly, rising 19% year-over-year and accounting for 37% of total revenue.

Mastercard Profitability Metrics

Mastercard’s profitability remains robust, with quarterly gross profit and net income showing steady year-over-year increases.

Gross Profit

• For Q3 2024, gross profit stood at $7.369 billion, matching the quarterly revenue, with a year-over-year increase of 12.8%.
• On an annual basis, gross profit for 2023 was $25.098 billion, up 12.87% from the previous year.

Net Income Trends

• The net income for the trailing twelve months ending September 30, 2024, reached $12.323 billion, a 12.76% increase year-over-year.
• Annual net income for 2023 was reported at $11.195 billion, reflecting a growth rate of 12.74% over 2022.

Mastercard Key Business Trends and Insights

Mastercard’s diversified portfolio, including mobile payments and fraud protection services, positions it for sustained growth despite economic challenges.

Consumer Spending Resilience

• Despite concerns over a potential slowdown, consumer spending remains elevated, driven by wage growth and optimistic economic indicators.

Diversified Revenue Streams

• Mastercard's business strategy spans beyond card payments to include mobile payments, peer-to-peer transactions, and value-added services like fraud protection. These segments have demonstrated strong resilience.

Value-Added Services Growth

• The company's investment in value-added services continues to pay off, with this segment accounting for a significant portion of revenue and experiencing a 19% year-over-year growth.

Global and Digital Expansion

• Mastercard is leveraging its global presence and digital innovations to capture new market opportunities. Analyst Logan Purk from Edward Jones emphasized that Mastercard's strong growth potential in digital and international markets warrants a higher valuation.

Mastercard Future Outlook

Upcoming earnings estimates suggest continued growth, with projections for Q4 2024 revenue and EPS reflecting strong market confidence.

Earnings Projections

• For Q4 2024, the current consensus estimate is $3.68 EPS on revenues of $7.4 billion.
• For the full fiscal year, estimates stand at $14.33 EPS on $27.95 billion in revenues.

Industry Performance

Mastercard operates in the Financial Transaction Services sector, which ranks in the top 32% of Zacks' industries, indicating strong relative performance.

Valuation Comparison

Mastercard trades at 31.56 times expected earnings over the next 12 months, higher than Visa's multiple of 25.71, reflecting the premium attributed to Mastercard's growth potential.

Conclusion

Mastercard's Q3 2024 earnings and revenue results underscore its solid operational performance and ability to navigate economic uncertainties. Its focus on value-added services and digital expansion has bolstered growth, while consistent earnings surprises reinforce investor confidence. As the company maintains its momentum, supported by favorable industry trends, Mastercard is well-positioned to deliver long-term value.