Mastercard Q3 earnings top consensus, buoyed by consumer spending, value-added services

[Visa, Mastercard, American Express, UnionPay, JCB and Diners Club app icons. Assorted credit card companies]
Robert Way

Mastercard's (MA [https://seekingalpha.com/symbol/MA]) Q3 results delivered beats on the top and bottom line, bolstered by a resilient consumer and strong growth from its value-added services business, which added services like cyber threat intelligence for payments and expanded agentic commerce.

Q3 adjusted EPS of $4.38 [https://seekingalpha.com/filing/14932779], beating the average analyst estimate of $4.31, rose from $4.15 in Q2 and $3.89 in last year’s Q3.

Q3 revenue of $8.60B, topping the $8.53B consensus, increased from $8.13B in the previous quarter and $7.37B in the year-ago period.

Q3 gross dollar volume of $2.75T, matching the Visible Alpha consensus of $2.75T, climbed from $2.63T in Q2 and $2.50T in Q3 2024.

"Mastercard delivered another strong quarter, with net revenue growth of 17% year-over-year, or 15% on a currency-neutral basis, driven by healthy consumer and business spending and continued robust performance of our differentiated services," said CEO Michael Miebach.

Mastercard (MA [https://seekingalpha.com/symbol/MA]) stock was little changed in premarket trading.

Payment network revenue increased 12% Y/Y, or 10% on a currency-neutral basis. Payment network rebates and incentives provided to customers rose 16%, or 15% on a currency-neutral basis.

Value-added services and solutions net revenue jumped 25%, or 22% on a currency-neutral basis, including a 3 percentage point increase from acquisitions. The rest of the growth primarily came from the company's underlying drivers, security and digital and authentication solutions, consumer acquisition and engagement services, business and market insights, and pricing.

Cross-border volume growth of 15%, on a local currency basis, compared with 15% in Q2.

Switched transactions rose 10% Y/Y, the same pace as in Q2.

Mastercard's (MA [https://seekingalpha.com/symbol/MA]) number of cards increased 6% Y/Y to 3.64B from 3.42B in Q3 2024.

Q3 adjusted operating margin of 59.8%, ticked down from 59.9% in the previous quarter and improved from 59.3% a year ago.

October month-to-date, Mastercard’s (MA [https://seekingalpha.com/symbol/MA]) switched volume increased 9%, vs. 11% in Q3. Switched transactions increased 10%, unchanged from growth in Q3 vs. Cross-border volume growth stayed at 15,

Conference call [https://investor.mastercard.com/overview/default.aspx] at 9:00 AM ET.

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