Mastercard Says Consumer Spending Is Healthy, Clocks 10% Revenue Growth In Q1

Mastercard Inc. (NYSE: MA) reported fiscal first-quarter net revenues of $6.35 billion, up 10% year over year and 11% year over year on a neutral currency basis, beating the consensus of $6.34 billion. Adjusted EPS rose 18% year over year to $3.31, exceeding the consensus of $3.24.

Payment network net revenue rose 7% Y/Y (+8% Y/Y on a currency-neutral basis), led by growth in gross dollar volume (+10% Y/Y), cross-border volume (+18% Y/Y) and switched transactions (+13% Y/Y). 

Also Read: Mastercard's Latest Virtual Card App Move to Boost Contactless Payments; Analyst Eyes Substantial Growth Citing Advanced Security and Digital Innovations

Value-added services and solutions net revenue rose 16% and 15% on a currency-neutral basis, driven by continued strong growth in cyber and intelligence solutions and high demand for consulting, marketing, and loyalty solutions.

Total operating expenses increased 5%. Excluding the impact of special items, adjusted operating expenses increased by 9% on a currency-neutral basis, primarily due to higher personnel costs. 

The adjusted operating margin expanded 60bps Y/Y to 58.8%.

As of March 31, 2024, the company's customers had issued 3.4 billion Mastercard and Maestro branded cards.

During the first quarter of 2024, Mastercard repurchased 4.4 million shares for $2.0 billion and paid $616 million in dividends. 

As of March 31, 2024, cash and cash equivalents stood at $9.5 billion.

"Our momentum continued this quarter, as we delivered strong revenue and earnings growth powered by healthy consumer spending, strong cross-border volume growth of 18% year-over-year, and new deal wins in every region," said Michael Miebach, CEO of Mastercard. "We are driving growth in electronic payments by scaling innovative technologies like tokenization."

Outlook: For the second quarter, Mastercard expects net revenue growth in the high-end of high-single-digits versus the $6.98 billion analyst consensus estimate. 

For fiscal 2024, Mastercard projects net revenue growth in the low-end of low-double-digits (prior expectations of high-end of low-double-digits) versus $28.11 billion analyst consensus estimate.

Mastercard stock gained 19% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Financial XLF and IShares U.S. Financial Services ETF IYG.

Price Action: MA shares are down 1.35% at $445.11 at the last check Wednesday.

Also Read: Mastercard Revamps Structure for Growth, New Teams to Drive Core Payments and Services

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