Mastercard beats earnings estimates in Q1 2023

Meanwhile, Q1 adjusted earnings of $2.80 per share beat the Zacks Consensus Estimate by 3.3% while inching up 1% YoY. The leading technology company in the global payments industry also enjoyed improved cross-border travel, an expanding payment network and value-added services and solutions, which bolstered its quarterly results.

The report also shows that Mastercard's gross dollar volume (GDV), representing the aggregated dollar amount of purchases made and cash disbursements obtained from MasterCard-branded cards, amounted to $2.1 billion in Q1, up 15% YoY on a local-currency basis, which came in higher than Zacks Consensus Estimate of $2.04 billion.

Cross-border volumes soared a whopping 35% YoY on a local-currency basis, while switched transactions, which indicate the number of times a company's products are used to facilitate transactions, rose 12% YoY to 32,464 million.

Value-added services and solutions net revenues of $2.1 billion also grew 19% YoY, which encompassed a 1% contribution from buyouts, with the remaining growth attributed to enhanced cyber and intelligence solutions and solid demand for fraud solutions. Furthermore, payment network rebates and incentives rose 25% YoY during the quarter.

Despite these successes, the company's operating expenses of $2.6 billion increased 18% YoY due to an elevated higher general and administrative expense level.

Mastercard also reported cash and cash equivalents of $6.6 billion in the first quarter, down 6.3% from the 2022-end level. The figure stands way higher than the current portion of long-term debt ($276 million).

For Q2, Mastercard anticipates net revenues to register the high-end of low-double-digit growth on a YoY basis while operating expenses are estimated to witness mid-single-digit growth. Meanwhile, management continues to expect net revenue growth in the low-teens range in 2023 from the 2022 figure, while operating expenses are presently forecasted to record high single-digit growth YoY.

Source: Yahoo Finance