Summary
Mastercard Inc. (MA) reported robust financial performance for the second quarter and first half of 2018, demonstrating strong revenue growth and profitability. Net revenue saw a significant increase of 20% and 25% for the quarter and half-year, respectively, driven by consistent growth in switched transactions, cross-border volume, and gross dollar volume. The company also benefited from the adoption of new revenue recognition standards and strategic acquisitions, which contributed positively to the top-line results. Profitability remained strong, with net income up 33% and 36% for the respective periods. This was supported by effective management of operating expenses, which grew at a slower pace than revenue, especially when excluding special items and the impact of foreign currency. A key factor influencing profitability was the significant decrease in the effective income tax rate, largely due to the U.S. Tax Reform enacted in late 2017, which reduced the U.S. corporate income tax rate. Investors will likely note the company's ongoing commitment to returning capital to shareholders through substantial share repurchases and dividend payments, indicating confidence in future cash flows and financial health.
Financial Highlights
53 data points| Revenue | $3.67B |
| Operating Expenses | $1.73B |
| Operating Income | $1.94B |
| Interest Expense | $48.00M |
| Net Income | $1.57B |
| EPS (Basic) | $1.50 |
| EPS (Diluted) | $1.50 |
| Shares Outstanding (Basic) | 1.04B |
| Shares Outstanding (Diluted) | 1.05B |
Key Highlights
- 1Net revenue increased by 20% to $3.7 billion for the second quarter of 2018 and by 25% to $7.2 billion for the first six months of 2018, compared to the prior year periods.
- 2Net income rose by 33% to $1.6 billion for the second quarter and by 36% to $3.1 billion for the first six months of 2018.
- 3Diluted earnings per share (EPS) increased by 36% to $1.50 for the second quarter and by 39% to $2.91 for the first six months of 2018.
- 4Operating expenses grew at a slower rate than revenue, with adjusted operating expenses (excluding special items and currency impacts) increasing by 7% for the quarter and 20% for the half-year.
- 5The effective income tax rate decreased significantly to 18.3% for the quarter and 17.8% for the half-year, primarily due to the U.S. Tax Reform reducing the corporate tax rate.
- 6Mastercard repurchased approximately 16.2 million shares of common stock for $2.9 billion during the first six months of 2018, and paid dividends totaling $525 million.
- 7Significant provisions for litigation settlements were recorded, totaling $225 million in the second quarter and $342 million for the first six months, impacting reported operating expenses.