Mastercard(US:MA)2025-10-30 14:14Financial Performance - Net revenue for Q3 2025 reached $8,602 million, a 17% increase from $7,369 million in Q3 2024[112] - Operating income for Q3 2025 was $5,061 million, reflecting a 26% increase compared to $4,004 million in Q3 2024[112] - Net income for the nine months ended September 30, 2025, was $10,908 million, up 14% from $9,532 million in the same period of 2024[112] - Adjusted net income for Q3 2025 was $3,961 million, a 10% increase from $3,593 million in Q3 2024[113] - Reported GAAP net income for the three months ended September 30, 2025, was $3,927 million, with diluted earnings per share of $4.34[122] - For the nine months ended September 30, 2025, reported GAAP net income was $10,908 million, with diluted earnings per share of $12.00[122] - Adjusted diluted earnings per share for Q3 2025 were $4.38, a 13% increase from $3.89 in Q3 2024[113] Tax and Income - The effective income tax rate for Q3 2025 was 21.5%, up 5.9 percentage points from 15.6% in Q3 2024, primarily due to the 15% global minimum tax[115] - The effective income tax rate for the three months ended September 30, 2025, was 21.5% under GAAP and 21.4% under non-GAAP adjustments[122] - The effective income tax rate for the nine months ended September 30, 2025, was 20.4%, compared to 16.1% for the same period in 2024[163] Cash Flow and Shareholder Returns - The company generated net cash flows from operations of $12.6 billion for the nine months ended September 30, 2025[115] - The company repurchased 14.7 million shares for $8.2 billion and paid dividends of $2.1 billion during the nine months ended September 30, 2025[115] - Aggregate payments for quarterly dividends for the nine months ended September 30, 2025, totaled $2,072 million[177] - The company repurchased shares of its common stock totaling $8,169 million for the nine months ended September 30, 2025[181] - Net cash provided by operating activities increased by $2,700 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to higher net income[168] Revenue Breakdown - For the three months ended September 30, 2025, net revenue increased 17% to $8,602 million, with a 15% increase on a currency-neutral basis[140] - Net revenue from the payment network rose 12% to $5,179 million, driven by growth in domestic and cross-border dollar volumes[142] - Net revenue from value-added services and solutions increased 25% to $3,423 million, primarily due to growth in key drivers and pricing[143] - For the nine months ended September 30, 2025, net revenue increased 16% to $23,985 million, with organic growth in both payment network and value-added services[144] Expenses - Operating expenses for Q3 2025 were $3,541 million, a 5% increase from $3,365 million in Q3 2024[112] - Adjusted non-GAAP operating expenses for the same period were $3,459 million, resulting in an operating margin of 59.8%[122] - General and administrative expenses increased 7% to $2,923 million, influenced by higher personnel costs and marketing service fulfillment[154] - Advertising and marketing expenses rose 11% to $245 million, primarily due to increased spending on sponsorships[157] - Operating expenses for the three months ended September 30, 2025, increased 5% to $3,541 million, with adjusted operating expenses rising 15%[150] - For the nine months ended September 30, 2025, advertising and marketing expenses increased by 17%, or 16% on a currency-neutral basis, compared to the same period in 2024[158] - For the three months ended September 30, 2025, depreciation and amortization expenses rose by 29%, or 27% on a currency-neutral basis, versus the comparable period in 2024[159] Debt and Financial Position - The company completed a debt offering in February 2025 for an aggregate principal amount of $1.25 billion[115] - Total debt outstanding as of September 30, 2025, was $19.0 billion, up from $18.2 billion at the end of 2024[172] - Cash, cash equivalents, and investments increased to $10.6 billion as of September 30, 2025, from $8.8 billion at the end of 2024[165] - The company has a commercial paper program authorized for up to $8 billion, with no borrowings outstanding as of September 30, 2025[173] Foreign Exchange and Interest Rate Risk - The company may enter into foreign exchange derivative contracts to manage foreign currency variability on anticipated revenues and expenses[137] - The company is subject to foreign exchange risk from daily settlement activities, with a hypothetical 10% adverse change in functional currencies not materially impacting the fair value of short duration foreign exchange derivative contracts as of September 30, 2025, and December 31, 2024[186] - As of September 30, 2025, the company did not have any foreign exchange derivative contracts designated as a net investment hedge, but a hypothetical 10% adverse change in the U.S. dollar could result in a fair value loss of approximately $279 million on such contracts at December 31, 2024[188] - The company’s available-for-sale debt investments include fixed and variable rate securities sensitive to interest rate fluctuations, with a hypothetical 100 basis point adverse change in interest rates not materially impacting the fair value of these investments at September 30, 2025, and December 31, 2024[189] - The company may enter into interest rate derivative contracts to hedge a portion of its fixed-rate debt, with a hypothetical 100 basis point adverse change in interest rates potentially resulting in a fair value loss of approximately $14 million and $20 million on these contracts at September 30, 2025, and December 31, 2024, respectively[190]