Mastercard Q4 Earnings Beat Estimates on GDV & Transactions Growth

Core Insights - Mastercard reported fourth-quarter 2024 adjusted earnings of $3.82 per share, exceeding the Zacks Consensus Estimate by 3.8%, with a year-over-year improvement of 20% [1] - Net revenues increased by 14% year over year to $7.5 billion, surpassing the consensus mark by 1.4% [1][2] Financial Performance - For the full year 2024, net revenues reached $28.2 billion, up from $25.1 billion in 2023, beating the Zacks Consensus Estimate of $28.06 billion [3] - Adjusted EPS for 2024 was $14.60, a 19% increase year over year, also exceeding the consensus mark of $14.47 [3] - Adjusted operating margin improved by 40 basis points year over year to 58.4% [3] Operational Metrics - Gross dollar volume increased by 12% on a local-currency basis to $2.6 trillion, aligning with the Zacks Consensus [4] - Cross-border volumes rose by 20% on a local currency basis, while switched transactions improved by 11% year over year to 42.2 billion, surpassing the consensus by 0.6% [5] - Net revenues from value-added services and solutions reached $3.1 billion, a 16% year-over-year increase, driven by higher demand for consumer acquisition and engagement [6] Expense and Income Analysis - Adjusted operating expenses rose by 14% year over year to $3.3 billion, primarily due to increased general and administrative costs [7] - Adjusted operating income grew by 15% year over year to $4.22 billion, exceeding the estimate of $4.14 billion [7] - Adjusted operating margin improved by 10 basis points year over year to 56.3% [7] Financial Position - As of December 31, 2024, Mastercard had cash and cash equivalents of $8.44 billion, down from $8.59 billion at the end of 2023, significantly higher than short-term debt of $750 million [8] - Total assets increased to $48.08 billion from $42.45 billion at the end of 2023, while long-term debt rose to $17.48 billion from $14.34 billion [8] - Total equity decreased to $6.52 billion from $6.98 billion at the end of 2023 [9] - Cash flows from operations for 2024 were $14.8 billion, up from $12 billion in the prior year [9] Capital Deployment - In Q4 2024, Mastercard repurchased 6.5 million shares for $3.4 billion and an additional 1.2 million shares for $644 million through January 27, 2025, leaving a buyback capacity of $14.5 billion [10] - Dividends paid in the quarter amounted to $606 million [10] Future Guidance - Management projects low-double-digit growth in net revenues for Q1 2025 and low-teens growth in adjusted operating expenses [11] - For the full year 2025, adjusted net revenues are expected to grow at a low-double-digit rate compared to 2024, with adjusted operating expenses anticipated to increase at a low-teens rate [12]