Mastercard Q2 Earnings Incoming: Hold the Card or Fold the Hand?

Payments giant Mastercard Incorporated MA is set to report second-quarter 2025 results on July 31, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $4.05 per shareon revenues of $7.99 billion. 

Second-quarter earnings estimates remained stable over the past 60 days. The bottom-line projection indicates an increase of 12.8% from the year-ago reported number. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 14.7%.

For full-year 2025, the Zacks Consensus Estimate for Mastercard’s revenues is pegged at $31.96 billion, implying a rise of 13.5% year over year. Also, the consensus mark for 2025 earnings per share is pegged at $16.04, implying a jump of around 9.9% on a year-over-year basis.

Mastercardhas a robust history of surpassing earnings estimates, beating the consensus estimate in each of the last four quarters, with the average surprise being 3.7%. This is depicted in the figure below.

Mastercard Incorporated Price and EPS Surprise

Mastercard Incorporated price-eps-surprise | Mastercard Incorporated Quote

Q2 Earnings Whispers for Mastercard

Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.

MA has an Earnings ESP of +0.20% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping Mastercard’s Q2 Results?

The Zacks Consensus Estimate for the company’s total Gross Dollar Volume (GDV) for all MA-branded programs suggests a 7.4% rise from the prior-year quarter’s reported figure, whereas our model predicts a 6.4% increase. We expect GDV from domestic operations to increase by almost 7% year over year and 6% in international operations. Increasing strength in Europe and APMEA operations is likely to have driven the metric.

Switched transactions are expected to have experienced an upsurge, driven by resilient consumer spending and increased contactless acceptance initiatives pursued by the payment technology company. The Zacks Consensus Estimate for its switched transactions indicates a 10.4% rise from the prior-year quarter’s reported figure, whereas our estimate suggests a 10.1% increase.

Growing cross-border travel is anticipated to have had a positive impact on Mastercard's cross-border volumes. As such, the consensus estimate for cross-border assessments suggests an increase of 17.1% compared with the previous year, while our projection indicates growth of 19.9%. Further, the consensus mark predicts domestic assessments and transaction processing assessments to witness a 10.2% and 13.5% year-over-year increase, respectively.

The Zacks Consensus Estimate for Value-added Services and Solutions net revenues indicates 16.8% year-over-year growth, while our model estimate suggests a 13% increase in the second quarter. Continued demand for its consulting and marketing services and loyalty solutions is likely to have driven this metric.

The above-mentioned factors are expected to have positioned the company not only for year-over-year growth but also for a likely earnings beat. The positives are expected to have been partially offset by rising expenses, rebates and incentives.

Mastercard’s adjusted operating costs are likely to have increased in the second quarter due to higher G&A costs and Advertising & Marketing expenses. We expect total adjusted operating expenses to rise nearly 16% from the prior-year quarter’s actuals. Furthermore, our estimate for payments network rebates and incentives suggests a 12.6% year-over-year increase.

Mastercard’s Price Performance & Valuation

Mastercard's stock has exhibited an upward movement over the year-to-date period. Its gain of 8% has outperformed the industry’s 4.7%. In comparison, its peers like Visa Inc. V jumped 12.5% during this time while American Express Company AXP increased 4.7%. Meanwhile, the S&P 500 Index grew 8.3%, placing it below Visa and above Mastercard and American Express.

Price Performance – MA, V, AXP, Industry & S&P 500

Now, let’s look at the value Mastercard offers investors at current levels.

The company’s valuation looks stretched compared with the industry average. Currently, Mastercardis trading at 32.33X forward 12-month earnings, above its five-year median of 31.74X and the industry’s average of 22.19X.

In comparison, both Visa and American Express offer better value at the moment, trading at a forward P/E of 28.31X and 18.85X.

How Should You Play Mastercard Ahead of Q2 Earnings?

Mastercard continues to solidify its competitive edge through expanded digital capabilities, stronger merchant engagement and a more seamless customer experience. Its embrace of tokenized transactions and exploration of stablecoin infrastructure highlight a forward-looking strategy rooted in innovation, not resistance. Value-Added Services remain a powerful growth driver, while robust cash flows fund dividends, buybacks and strategic investments.

That said, growing regulatory scrutiny presents meaningful risks to Mastercard’s fee-based business model. Legal challenges in both the United States and the United Kingdom could compress margins and limit pricing flexibility. At the same time, competitive threats are intensifying, from nimble fintechs, Big Tech platforms and stablecoin-native payment alternatives that could bypass traditional networks.

Mastercard remains a leader, and the stock has proven resilient. Still, execution will be critical amid these headwinds. With second-quarter earnings around the corner, investors may be wise to hold and wait for a more attractive entry point.

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This article originally published on Zacks Investment Research (zacks.com).

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