Credit Card Juggernaut MasterCard's Stock Tanks Despite Q3 Beat

Mastercard Inc MA shares are trading lower after the company reported Q3 FY23 results.

Net revenues stood at $6.53 billion, up 14% Y/Y and 11% Y/Y on a neutral currency basis, beating the consensus of $6.52 billion.

Payment network net revenue rose 12% Y/Y (+10% Y/Y on a currency-neutral basis), led by growth in gross dollar volume (+11% Y/Y), cross-border volume (+21% Y/Y) and switched transactions (+15% Y/Y). 

Value-added services and solutions net revenue rose 17% and 14% on a currency-neutral basis, driven by continued strong growth in cyber and intelligence solutions and high demand for consulting and marketing services and loyalty solutions.

Also Read: Mastercard's Product Roster To Expand With Self-Custody Wallet Firms Partnership

Adjusted operating expenses rose 10% Y/Y to $2.7 billion due to higher personnel costs and acquisitions. 

The adjusted operating margin expanded ~120bps Y/Y to 58.8%.

Adjusted EPS rose 26% Y/Y to $3.39, exceeding the consensus of $3.21.

As of September 30, 2023, the customers had issued 3.3 billion Mastercard and Maestro-branded cards. 

In Q3, Mastercard repurchased shares worth $1.9 billion and paid $538 million in dividends.

As of September 30, 2023, cash flow from operating activities stood at $7.85 billion, and cash and cash equivalents stood at $6.89 billion.

Outlook: For Q4, MA expects net revenue growth in low-double digits. 

Also Read: Mastercard's Second Collab For The Day: MoonPay Partnership For Exploring Web3

Price Action: MA shares are down 5.21% at $366.18 on the last check Thursday.