Mastercard Q1 Earnings Beat Estimates on Cross-Border Transactions

Mastercard Incorporated MA reported first-quarter 2025 adjusted earnings of $3.73 per share, which surpassed the Zacks Consensus Estimate by 4.5%. The bottom line improved 13% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)Net revenues of the leading technology company in the global payments industry advanced 14% year over year to $7.3 billion. The top line beat the consensus mark by 1.8%.The strong quarterly results reflect benefits from increased gross dollar volume, cross-border volumes, strong demand for value-added services and growth in switched transactions due to robust consumer spending. 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 QuoteMastercard’s Q1 Operational PerformanceGross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) increased 9% on a local-currency basis to $2.4 trillion. The metric missed the Zacks Consensus Estimate by 2.6%.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 9% year over year to 40.1 billion. The metric missed the consensus mark of 40.3 billion. Value-added services and solutions’ net revenues of $2.8 billion advanced 16% year over year. However, the same missed our estimate by 1.4%. The year-over-year growth was driven by 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 12% year over year as a result of new and renewed deals.Mastercard’s clients issued 3.5 billion Mastercard and Maestro-branded cards as of March 31, 2025.Adjusted operating expenses escalated 13% year over year to $3 billion due to increased general, administrative and marketing expenses.Adjusted operating income was $4.3 billion, which grew 15% year over year and beat our estimate of $4.1 billion. The adjusted operating margin improved 50 basis points year over year to 59.3%.Mastercard’s Financial Position (As of March 31, 2025)Mastercard exited the first quarter with cash and cash equivalents of $7.6 billion, which declined from the 2024-end level of $8.4 billion.Total assets of $48.5 billion increased from the $48.1 billion figure at 2024-end.Long-term debt amounted to $18.8 billion, up from the $17.5 billion figure as of Dec. 31, 2024.Total equity of $6.7 billion rose from the 2024-end level of $6.5 billion. Mastercard generated cash flows from operations of $2.4 billion in the first quarter of 2025, which advanced from the prior-year period’s $1.7 billion.Mastercard’s Capital Deployment UpdateMastercard bought back 4.7 million shares for $2.5 billion in the first quarter. Quarter to date through April 28, it bought back another 1.7 million shares for $884 million, leaving a buyback capacity of $11.8 billion. Mastercard paid out dividends worth $694 million in the quarter under review.Mastercard’s 2Q25 GuidanceManagement projects adjusted net revenues to register mid-teens growth on a year-over-year basis in the second quarter of 2025, while adjusted operating expenses are anticipated to record mid-teens growth.Mastercard’s 2025 ViewManagement estimates adjusted net revenues to witness low-teens growth in 2025 from the 2024 figure. Adjusted operating expenses are forecasted to witness mid-teens growth from the year-ago figure.MA’s Zacks Rank & Key PicksMA currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader business services space are OppFi Inc. OPFI and Stantec Inc. STN, each sporting a Zacks Rank #1 (Strong Buy). Another company, PAR Technology Corp PAR, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for OppFi’s current-year earnings of $1.07 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. OppFi beat earnings estimates in each of the trailing four quarters, with the average surprise being 73%. The consensus estimate for current-year revenues is pegged at $576.9 million, implying 9.7% year-over-year growth.The Zacks Consensus Estimate for Stantec’s current-year earnings of $3.74 per share has witnessed four upward revisions in the past 30 days against no movement in the opposite direction. Stantec beat earnings estimates in each of the trailing four quarters, with the average surprise being 6.9%. The consensus estimate for current-year revenues is pegged at $4.7 billion, implying 8.7% year-over-year growth.The Zacks Consensus Estimate for PAR Technology’s current-year earnings of 16 cents per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. The consensus estimate for PAR Technology’s current-year revenues is pegged at $450.5 million, implying 16.9% year-over-year growth.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 PAR Technology Corporation (PAR): Free Stock Analysis Report Stantec Inc. (STN): Free Stock Analysis Report OppFi Inc. (OPFI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks