Mastercard Third Quarter 2024 Earnings Report

Mastercard Incorporated (NYSE: MA) has reported strong financial results in its third quarter of 2024, with CEO Michael Miebach highlighting a 14% increase in net revenues and a 13% rise in adjusted net income year-over-year. This growth was primarily driven by a significant rise in consumer spending and cross-border volume. The company is focusing on expanding its digital payment acceptance and commercial payments, alongside key acquisitions to enhance its cybersecurity and subscription management services. An investment community meeting is scheduled for November 13 to discuss future strategies.

Key Takeaways

• Mastercard's net revenues rose 14%, while adjusted net income increased 13% year-over-year.
• Cross-border volume grew by 17%, with worldwide gross dollar volume (GDV) seeing a 10% increase.
• The company announced plans to acquire Recorded Future and Minna Technologies to strengthen its cybersecurity and subscription management capabilities.
• Mastercard repurchased $2.9 billion in stock, with an additional $983 million repurchased through October 28, 2024.
• Q4 2024 outlook anticipates low-teens net revenue growth and a non-GAAP tax rate of approximately 17%.

Company Outlook

• Mastercard is targeting low-teens net revenue growth on a currency-neutral basis for Q4 2024.
• Operating expense growth is expected at the high end of a low double-digit range due to increased advertising and marketing expenses.
• The investment community meeting on November 13 will provide further insights into the company's strategy.

Bearish Highlights

• Early October spending trends may be influenced by one-time items; caution is advised when projecting for 2025.
• The company is aware of the competitive landscape and is focused on financial discipline.

Bullish Highlights

• Consumer health remains strong, supported by a slight decline in Fed-driven interest rates.
• Mastercard is capturing additional B2B flows and has seen an 11% growth rate in commercial volumes for Q3.
• Value-added services, especially in cybersecurity and data insights, continue to grow, now accounting for about 50% of offerings.

Misses

• There were no specific misses reported in the earnings call.

Q&A Highlights

• Mastercard Move reached 95% of the world's banks, with over 40% transaction growth in Q3.
• The company is focusing on expanding in China and is aware of potential regulatory challenges in the market.

In summary, Mastercard's third-quarter earnings for 2024 reflect a company in robust financial health, strategically expanding its services and market presence. The acquisitions of Recorded Future and Minna Technologies underscore Mastercard's commitment to enhancing cybersecurity and personalization in its offerings. With significant growth in key financial metrics and a clear strategy for the coming quarter, Mastercard appears well-positioned to continue its trajectory in the digital payments space. The upcoming investment community meeting in November is likely to provide investors with a more detailed view of the company's long-term plans and initiatives.

InvestingPro Insights

Mastercard's strong financial performance in Q3 2024 is underscored by data from InvestingPro. With a market capitalization of $461.26 billion, the company shows a consistent revenue growth of 11.87% over the last twelve months and a gross profit margin of 100%. Investors should note MasterCard's high P/E ratio of 38.24 and a consistent 13-year dividend growth.

Full transcript – Mastercard Inc (MA) Q3 2024:

Operator: Good morning. My name is [Brianna] (ph), and I will be your conference operator today…