$MA earnings report

Mastercard reported a strong third quarter, with GAAP net revenue of $9.8 billion, up 14% from $8.6 billion. GAAP operating income increased 16% to $5.9 billion, net income increased 18% to $4.6 billion, and diluted EPS increased 22% to $5.28. Adjusted diluted EPS increased 21% to $5.31. The nine-month trend was also robust: net revenue increased 15% to $27.5 billion, GAAP operating income increased 17% to $16.4 billion, and diluted EPS increased 22% to $14.59.

Underlying payment activity supported the revenue result. Third-quarter gross dollar volume increased 7% on a local currency basis to $3.0 trillion, purchase volume increased 9% on a local currency basis, cross-border volume increased 11% on a local currency basis, and switched transactions increased 9%. Payment network net revenue increased 11%, supported by volume growth and pricing. Value-added services and solutions net revenue increased 19%, driven by underlying key drivers, strong demand across several services and pricing.

Profitability expanded despite higher costs. The GAAP operating margin rose to 59.8% from 58.8%, while the adjusted operating margin rose to 60.5% from 59.8%. Total operating expenses increased 11%, primarily due to higher general and administrative expenses. Third-quarter GAAP expenses included $74 million of pre-tax charges primarily related to settlements with merchants who opted out of the U.S. merchant class litigation. The effective tax rate declined to 19.4% from 21.5%, and the adjusted effective tax rate declined to 20.1% from 21.4%, due to higher net discrete tax benefits and other tax impacts in 2026.

Capital deployment remained substantial. Mastercard repurchased 5.3 million shares for $3.0 billion and paid $763 million in dividends during the quarter. Through October 26, it repurchased another 1.1 million shares for $0.6 billion, leaving $4.9 billion under approved repurchase programs. Nine-month operating cash flow was $11,859 million, below $12,646 million in the prior-year period, while purchases of treasury stock totaled $(11,893) million and dividends paid totaled $(2,311) million. Cash and cash equivalents were $10,147 million at September 30, 2026, against $1,749 million of short-term debt and $22,189 million of long-term debt.

The filing provided no forward financial guidance. Key operating items to monitor are cross-border volume, value-added services and solutions growth, the growth rate of rebates and incentives, expense growth, and the effect of interest expense and equity-investment gains or losses on other income (expense).

Mastercard reported a strong second quarter, with GAAP net revenue of $9.3 billion, up 14%, and currency-neutral growth of 12%. GAAP operating income increased 17% to $5.6 billion, net income increased 19% to $4.4 billion, and diluted EPS increased 22% to $4.97. Adjusted net income was $4.5 billion and adjusted diluted EPS was $5.04.

Underlying payment activity remained broad-based. Gross dollar volume grew 8% on a local currency basis to $2.9 trillion, cross-border volume grew 12% on a local currency basis, and switched transactions grew 9%. Payment network net revenue increased 10%, or 8% on a currency-neutral basis. Value-added services and solutions net revenue increased 20%, or 18% on a currency-neutral basis, supported by security solutions, consumer acquisition and engagement services, digital and authentication solutions, and business and market insights and pricing.

Margins expanded despite higher spending. GAAP operating expenses increased 10% to $3.7 billion, primarily due to higher general and administrative expenses, while GAAP operating margin increased 1.5 percentage points to 60.2%. Adjusted operating expenses increased 11% to $3.6 billion and adjusted operating margin increased 1.2 percentage points to 61.1%. Payment network rebates and incentives increased 22%, or 20% on a currency-neutral basis, reflecting key-driver growth and new and renewed deals.

Year-to-date results showed similar momentum. Net revenue was $17.7 billion, up 15%, while operating income increased 18% to $10.5 billion and diluted EPS increased 22% to $9.32. Year-to-date gross dollar volume grew 8% on a local currency basis to $5.6 trillion, while cross-border volume increased 12% and switched transactions increased 9%. Year-to-date operating expenses included a restructuring charge in the first quarter of 2026, partially offset by lower litigation provisions.

Capital allocation remained substantial. Mastercard repurchased 9.8 million shares for $4.9 billion and paid $771 million in dividends during the quarter. Through July 27, it repurchased another 1.3 million shares for $0.7 billion, leaving $7.8 billion under approved repurchase programs. The release did not provide forward financial guidance, so the next areas of focus are payment-volume trends, value-added services growth, rebates and incentives, and expense growth.