Mastercard Q2 Earnings Beat Estimates on Robust Consumer Spending

Mastercard Incorporated MA reported second-quarter 2025 adjusted earnings of $4.15 per share, which surpassed the Zacks Consensus Estimate by 2.5%. The bottom line improved 16% year over year.

Net revenues advanced 16.8% year over year to $8.1 billion. The top line beat the consensus mark by 1.9%.

The strong quarterly results reflect benefits from increased gross dollar volume, cross-border volumes, strong demand for value-added services and growth in transactions due to robust consumer spending on travel and leisure. However, the upside was partly offset by escalating operating expenses and higher rebates and incentives.

Mastercard Incorporated Price, Consensus and EPS Surprise

Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote

Mastercard’s Q2 Operational Performance

Gross dollar volume or GDV (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) increased 9% on a local-currency basis to $2.6 trillion. The metric beat the Zacks Consensus Estimate by 1.9%.

Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) rose 15% on a local currency basis. Switched transactions, which indicate the number of times a company’s products have been used to facilitate transactions, improved 10% year over year to 43.5 billion. The metric missed the consensus mark by a whisker.

Value-added services and solutions’ net revenues of $3.2 billion advanced 23% year over year. Also, the same beat our model estimate of $2.9 billion. The year-over-year growth was driven by acquisitions, higher demand for consumer acquisition and engagement, as well as business and market insight services. Also, the scaling of its security and digital and authentication solutions and improving pricing strategies, aided the metric.

Payment network rebates and incentives increased 17% year over year as a result of new and renewed deals. Mastercard’s clients issued 3.6 billion Mastercard and Maestro-branded cards as of June 30, 2025.

Adjusted operating expenses escalated 15% year over year to $3.3 billion due to increased general, administrative, advertising and marketing expenses.

Adjusted operating income was $4.9 billion, which grew 18% year over year and beat our model estimate of $4.7 billion. The adjusted operating margin improved 50 basis points year over year to 59.9%.

Mastercard’s Financial Position (As of June 30, 2025)

Mastercard exited the second quarter with cash and cash equivalents of $9 billion, which increased from the 2024-end level of $8.4 billion. Total assets of $51.4 billion increased from the $48.1 billion figure at 2024-end.

Long-term debt amounted to $19 billion, up from the $17.5 billion figure as of Dec. 31, 2024. Total equity of $7.9 billion rose from the 2024-end level of $6.5 billion.

Mastercard generated cash flows from operations of $7 billion in the first half of 2025, which advanced from the prior-year period’s $4.8 billion.

Mastercard’s Capital Deployment Update

Mastercard bought back 4.2 million shares for $2.3 billion in the second quarter. Quarter to date through July 28, it bought back another 1.8 million shares for $1 billion, leaving a buyback capacity of $9.3 billion. Mastercard paid out dividends worth $691 million in the quarter under review.

Mastercard’s 3Q25 Guidance

Management projects adjusted net revenues to register high end of mid-teens growth on a year-over-year basis in the third quarter of 2025, while adjusted operating expenses are also anticipated to record high end of mid-teens growth.

Mastercard’s 2025 View

Management now estimates adjusted net revenues to witness high end of mid-teens growth in 2025 from the 2024 figure. Adjusted operating expenses are also forecasted to witness high end of mid-teens growth from the year-ago figure.

Mastercard currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Mastercard’s Peers Perform?

MA’s peers like Visa Inc. V and American Express Company AXP have also reported results for the June quarter of 2025. Here’s how they have performed:

Visa reported third-quarter fiscal 2025 EPS of $2.98, which beat the Zacks Consensus Estimate of $2.86 by 4.2%, thanks to higher processed transactions, payments and cross-border volumes. However, the upside was partly offset by Visa’s increased operating expenses.

American Express reported second-quarter 2025 EPS of $4.08, which beat the Zacks Consensus Estimate by 5.7% on growing Card Member spending and a premium customer base. Rising revolving loan balances and continued robust card fee growth aided its performance. American Express’ results were partially offset by escalating customer engagement and operating costs.

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

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