01—Abstract
Summary
Summary of the 10-Q filed October 29, 2019. Cited figures are marked; the original filing is the authoritative source.
Mastercard Inc. reported strong financial performance for the nine months ended September 30, 2019, demonstrating robust revenue growth and increased profitability.
Net revenue rose by 12% to $12.5 billiona, driven by a 13% increase in Gross Dollar Volume (GDV) on a local currency basis and a 17% rise in switched transactions. The company also saw significant growth in its Data & Services and Cyber & Intelligence solutions, contributing to a 23% increase in 'Other revenues'. Profitability was solid, with net income increasing by 21% to $6.0 billion.
This growth was supported by effective expense management, although adjusted operating expenses saw a 10% increase primarily due to strategic investments. Mastercard also actively returned capital to shareholders through significant share repurchases totaling $5.5 billionb and dividend payments of $1.0 billion. The company's liquidity position remains strong, with substantial operating cash flows and an available credit facility.
02—Key points
Key Highlights
- Net revenue for the nine months ended September 30, 2019, increased by 12% to $12.5 billion, driven by a 13% increase in Gross Dollar Volume (GDV) and a 17% increase in switched transactions.
- Other revenues, including Data & Services and Cyber & Intelligence solutions, grew by 23%, contributing significantly to overall revenue expansion.
- Net income for the nine-month period rose by 21% to $6.0 billion, reflecting strong operational performance and effective expense management.
- Adjusted operating expenses increased by 10%, primarily due to strategic investments in growth initiatives, while maintaining a healthy operating margin.
- Mastercard returned $5.5 billion to shareholders through share repurchases and paid $1.0 billion in dividends during the first nine months of 2019.
- The company generated $5.2 billion in net cash from operating activities, underscoring its strong cash flow generation capabilities.
- Mastercard completed acquisitions totaling $1.2 billion, aligning with its strategy for growth and diversification.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2019filed October 29, 2019Financial Statements
Q3 FY2019 against Q3 FY2018
| Line item | Q3 FY2019Q3 FY2018 | Change |
|---|---|---|
| Revenue | $4.47B$3.90B | +14.6% |
| Operating Expenses | $1.81B$1.61B | +12.5% |
| Operating Income | $2.65B$2.29B | +16.1% |
| Interest Expense | $63.00M$48.00M | +31.3% |
| Net Income | $2.11B$1.90B | +11.0% |
| EPS (Basic) | $2.08$1.83 | +13.7% |
| EPS (Diluted) | $2.07$1.82 | +13.7% |
| Shares Outstanding (Basic) | 1.01B1.04B | −2.3% |
| Shares Outstanding (Diluted) | 1.02B1.04B | −2.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of Mastercard's revenue growth in the reported period?
Mastercard's revenue growth was primarily driven by an increase in transaction volumes, including a 13% rise in Gross Dollar Volume (GDV) on a local currency basis and a 17% increase in switched transactions. Additionally, growth in 'Other revenues,' driven by Data & Services and Cyber & Intelligence solutions, played a significant role.
How did Mastercard manage its expenses during this period?
While total operating expenses saw a modest increase of 2% for the nine months, adjusted operating expenses increased by 10% due to strategic investments in growth initiatives. Despite this, the company maintained a strong operating margin of 58.3%.
What is Mastercard's approach to returning capital to shareholders?
Mastercard demonstrated a strong commitment to returning capital to shareholders by repurchasing approximately $5.5 billion of its common stock and paying $1.0 billion in dividends during the first nine months of 2019.
What is the company's liquidity position?
Mastercard maintains a strong liquidity position, generating $5.2 billion in net cash from operating activities during the nine-month period. The company also has access to a $4.5 billion revolving credit facility, though it had no outstanding borrowings under this facility or its commercial paper program at the end of the period.
06—Continue