Mastercard Posts Q2 Earnings Beat, Reaffirms FY23 Guidance

Mastercard Inc MA reported Q2 2023 net revenues of $6.27 billion, up 14% Y/Y and 15% Y/Y on a neutral currency basis, beating the consensus of $6.17 billion.

Payment network net revenue rose 13% Y/Y (+14% Y/Y on a currency-neutral basis), led by growth in gross dollar volume (+12% Y/Y), cross-border volume (+24% Y/Y) and switched transactions (+17% Y/Y). 

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

Adjusted operating expenses rose 11% Y/Y to $2.6 billion due to higher personnel costs. 

The adjusted operating margin expanded ~80bps Y/Y to 58.6%.

Adjusted EPS rose 13% Y/Y to $2.89, exceeding the consensus of $2.83.

As of June 30, 2023, the customers had issued 3.2 billion Mastercard and Maestro-branded cards. 

In Q2, Mastercard repurchased shares worth $2.4 billion and paid $541 million in dividends. 

As of June 30, 2023, cash flow from operating activities stood at $4.6 billion, and cash and equivalents stood at $8.52 billion.

"Our positive momentum continued this quarter. We delivered strong revenue and earnings growth supported by resilient consumer spending, particularly in travel and experiences, and the continued strength in services. Cross-border travel volume showed strong growth again this quarter, reaching 154% of pre-pandemic levels. We had a number of notable wins with key customers as our innovative products and differentiated services position us as a partner of choice," said Michael Miebach, Mastercard CEO.

Outlook: For 2023, the company reaffirmed the outlook for net revenue to grow in low-teens and adjusted operating expense to grow in the low-end of low- double-digits. 

Also Read: Mastercard Demands Shutdown Of Marijuana Buys On Its Debit Cards

Price Action: MA shares are trading higher by 1.04% at $398.24 on the last check Thursday.