10-QPeriod: Q3 FY2019

Mastercard Inc Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 29, 2019For Securities:MA

Summary

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 billion, 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 billion and dividend payments of $1.0 billion. The company's liquidity position remains strong, with substantial operating cash flows and an available credit facility.

Financial Highlights

53 data points
Beta

Revenue

$4.47B

Net Income

$2.11B

47.2% Net Margin

EPS (Diluted)

$2.07

Total Assets

$25.98B

Cash & Equivalents

$5.10B

Free Cash Flow

$2.22B

Financial Statements
Beta
Revenue$4.47B
Operating Expenses$1.81B
Operating Income$2.65B
Interest Expense$63.00M
Net Income$2.11B
EPS (Basic)$2.08
EPS (Diluted)$2.07
Shares Outstanding (Basic)1.01B
Shares Outstanding (Diluted)1.02B

Key Highlights

  • 1Net 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.
  • 2Other revenues, including Data & Services and Cyber & Intelligence solutions, grew by 23%, contributing significantly to overall revenue expansion.
  • 3Net income for the nine-month period rose by 21% to $6.0 billion, reflecting strong operational performance and effective expense management.
  • 4Adjusted operating expenses increased by 10%, primarily due to strategic investments in growth initiatives, while maintaining a healthy operating margin.
  • 5Mastercard returned $5.5 billion to shareholders through share repurchases and paid $1.0 billion in dividends during the first nine months of 2019.
  • 6The company generated $5.2 billion in net cash from operating activities, underscoring its strong cash flow generation capabilities.
  • 7Mastercard completed acquisitions totaling $1.2 billion, aligning with its strategy for growth and diversification.

Frequently Asked Questions

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.

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%.

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.

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.