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Takeaways from Mastercard (MA) Earnings Beat

Thursday, October 28, 2021 11:06 AM | Neal Farmer
Takeaways from Mastercard (MA) Earnings Beat

Shares of Mastercard (MA) are higher this morning after the firm surpassed earnings and revenue projections for the third quarter.

Drivers of Success

CEO Michael Miebach cited domestic and cross-border spending for its results, saying, “Our performance was driven by the execution of our strategy, healthy domestic spending and solid growth in cross-border spending which has recently returned to pre-pandemic levels”.

Net revenue for Mastercard increased 30% driven largely by cross-border volume growth of 52% and gross dollar volume growth of 20%. Other revenues rose 37% with 10 percentage points coming from growth in acquisitions while the rest was primarily due to Cyber & Intelligence and Data & Services solutions.

Cost Spikes

Eating into some of its profits was a 31% increase in operating expenses. Mastercard referred to personnel costs, investment in strategic initiatives, and increased spending on marketing as the main drivers of this cost spike. In addition, 8 percentage points came from an increase in acquisitions.

Next Steps

The firm is working on its installment program and crypto services with Miebach commenting, “We are extending the scale and power of our trusted network through innovations like our new Mastercard Installments program. And, we continue to add to our efforts in cryptocurrency services and open banking through the acquisition of CipherTrace and the planned acquisition of Aiia.”

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