Photo: Drew Gurian / Mastercard / CC BY-SA 4.0 (cropped/resized)
Mastercard reported a 14% increase in third-quarter revenue Thursday as payment volumes, cross-border activity and demand for its services grew.
The payments company said net revenue reached $9.8 billion, up from $8.6 billion a year earlier. Net income rose 18% to $4.6 billion, while diluted earnings per share increased 22% to $5.28 from $4.34.
Adjusted diluted earnings per share, a non-GAAP measure, rose 21% to $5.31 from $4.38. Adjusted net income was $4.7 billion, up 17%.
Cross-border volume rises 11%
Gross dollar volume increased 7% to $3 trillion on a local-currency basis, while purchase volume rose 9%. Cross-border volume increased 11%, and switched transactions grew 9%.
Payment-network net revenue rose 11%. Mastercard cited growth in payment activity and pricing, partly offset by customer rebates and incentives. Those rebates and incentives increased 18%, reflecting business growth and new and renewed deals.
Value-added services and solutions revenue grew 19%. The company attributed the increase to demand across several services, growth in its underlying business and pricing.
Revenue growth was 14% both as reported and on a currency-neutral basis. The payment-network and services growth rates were also the same on those two measures.
Expenses rise, tax rate falls
Operating expenses increased 11% to $3.9 billion, primarily because of higher general and administrative expenses. Operating income rose 16% to $5.9 billion, and operating margin was 59.8%, compared with 58.8% a year earlier.
The effective income tax rate fell to 19.4% from 21.5%. Mastercard said higher net discrete tax benefits and other tax effects helped lower both its reported and adjusted tax rates.
At the end of September, Mastercard’s customers had issued 3.8 billion Mastercard- and Maestro-branded cards. The company said its earnings conference call would begin at 9 a.m. Eastern on Thursday.
JBizNews Desk | Purchase, New York
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