Mastercard Q1 Earnings Beat Estimates on Cross-Border Transactions

Core Viewpoint - Mastercard reported strong first-quarter 2025 results, with adjusted earnings per share of $3.73, exceeding estimates by 4.5% and showing a 13% year-over-year improvement [1][2]. Financial Performance - Net revenues increased by 14% year over year to $7.3 billion, surpassing the consensus estimate by 1.8% [1][2]. - Adjusted operating income grew 15% year over year to $4.3 billion, beating estimates of $4.1 billion, with an adjusted operating margin improvement of 50 basis points to 59.3% [7]. Operational Metrics - Gross dollar volume rose 9% on a local-currency basis to $2.4 trillion, although it missed the consensus estimate by 2.6% [3]. - Cross-border volumes increased by 15% on a local currency basis, while switched transactions improved 9% year over year to 40.1 billion, missing the consensus mark of 40.3 billion [4]. Value-Added Services - Net revenues from value-added services and solutions reached $2.8 billion, a 16% year-over-year increase, but fell short of estimates by 1.4% [5]. Expenses and Incentives - Adjusted operating expenses rose 13% year over year to $3 billion, driven by higher general, administrative, and marketing costs [6]. - Payment network rebates and incentives increased by 12% year over year due to new and renewed deals [6]. Cash Flow and Capital Deployment - Cash flows from operations were $2.4 billion in Q1 2025, up from $1.7 billion in the prior year [9]. - The company repurchased 4.7 million shares for $2.5 billion in the first quarter and paid out $694 million in dividends [10]. Financial Position - As of March 31, 2025, cash and cash equivalents were $7.6 billion, down from $8.4 billion at the end of 2024, while total assets increased to $48.5 billion [8]. Future Guidance - Management projects mid-teens growth in adjusted net revenues for Q2 2025 and low-teens growth for the full year [11][12].