Mastercard Incorporated (MA) Bundle
A Brief History of Mastercard
Mastercard Incorporated, a leading global payments technology company, has seen significant growth and transformation since its inception. As of 2024, Mastercard continues to be a major player in the financial services industry, providing payment processing solutions across the globe.
Financial Performance
For the third quarter of 2024, Mastercard reported net revenues of $7.369 billion, representing a 13% increase from $6.533 billion in the same quarter of 2023. For the nine months ended September 30, 2024, net revenues totaled $20.678 billion, up 11% from $18.550 billion in 2023.
| Metric | 2024 Q3 | 2023 Q3 | Change | 2024 YTD | 2023 YTD | Change |
|---|---|---|---|---|---|---|
| Net Revenue | $7.369 billion | $6.533 billion | +13% | $20.678 billion | $18.550 billion | +11% |
| Adjusted Operating Expenses | $2.999 billion | $2.689 billion | +12% | $8.444 billion | $7.683 billion | +10% |
| Adjusted Net Income | $3.593 billion | $3.202 billion | +12% | $10.027 billion | $8.622 billion | +16% |
| Adjusted Diluted Earnings per Share | $3.89 | $3.39 | +15% | $10.78 | $9.08 | +19% |
Stock Performance and Shareholder Returns
Mastercard has also been active in returning value to its shareholders. For the nine months ended September 30, 2024, total dividends declared amounted to $1.833 billion, compared to $1.615 billion in the same period of 2023. The average dividend per share was $0.66 for the third quarter of 2024.
Additionally, the company repurchased shares worth $7.565 billion during the nine months ended September 30, 2024, at an average price of $458.36 per share.
| Share Repurchase Summary | 2024 YTD | 2023 YTD |
|---|---|---|
| Dollar-value of shares repurchased | $7.565 billion | $7.200 billion |
| Shares repurchased | 16.5 million | 19.2 million |
| Average price paid per share | $458.36 | $375.34 |
Debt and Liquidity Position
As of September 30, 2024, Mastercard's total debt outstanding was $18.4 billion, an increase from $15.7 billion at the end of 2023. The company's liquidity remained robust with cash and cash equivalents amounting to $11.063 billion.
Mastercard has a committed unsecured revolving credit facility of $8 billion, maturing in November 2028, which underscores its strong liquidity position.
| Debt Summary | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt Outstanding | $18.4 billion | $15.7 billion |
| Cash and Cash Equivalents | $11.063 billion | $8.588 billion |
| Revolving Credit Facility | $8 billion | $8 billion |
Recent Developments
In April 2024, Mastercard matured and paid $1 billion of principal related to the 2014 USD Notes. Moreover, during the nine months ended September 30, 2024, the company issued $4 billion of debt across multiple notes, which included $750 million due in January 2028 and $1.150 billion due in January 2032.
The company continues to adapt to changing market conditions and regulatory environments, maintaining its position as a leader in the global payments landscape.
A Who Owns Mastercard Incorporated (MA)
Major Shareholders
As of 2024, the ownership structure of Mastercard Incorporated is characterized by a mix of institutional and individual investors. The following table outlines the top shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type |
|---|---|---|
| Vanguard Group, Inc. | 8.1% | Institutional |
| BlackRock, Inc. | 7.7% | Institutional |
| State Street Corporation | 4.8% | Institutional |
| FMR LLC (Fidelity) | 4.2% | Institutional |
| Capital Research Global Investors | 3.9% | Institutional |
| Mastercard Inc. Employees' Stock Ownership Plan | 1.5% | Employee Ownership |
| Other Individual Investors | 69.8% | Individual |
Class A and Class B Common Stock
Mastercard has two classes of common stock: Class A and Class B. The Class A shares are publicly traded, while Class B shares are primarily held by the company’s founders and executives, granting them significant voting power. As of September 30, 2024, the total outstanding shares are:
| Class | Outstanding Shares (in millions) | Percentage of Total Shares |
|---|---|---|
| Class A | 912.6 | 99.2% |
| Class B | 7.1 | 0.8% |
Institutional Ownership
Institutional investors hold a significant portion of Mastercard’s shares, indicating strong confidence in the company’s financial health and growth potential. The following table provides a breakdown of institutional ownership:
| Institution | Shares Held (in millions) | Ownership Percentage |
|---|---|---|
| Vanguard Group, Inc. | 62.5 | 8.1% |
| BlackRock, Inc. | 58.9 | 7.7% |
| State Street Corporation | 30.0 | 4.8% |
| FMR LLC (Fidelity) | 29.3 | 4.2% |
| Capital Research Global Investors | 25.4 | 3.9% |
Recent Shareholder Changes
In recent quarters, Mastercard has engaged in share repurchase programs, enhancing shareholder value. For the nine months ended September 30, 2024, the company repurchased:
| Activity | Value (in millions) | Shares Repurchased (in millions) |
|---|---|---|
| Share Repurchases | $7,565 | 16.5 |
These repurchases are part of an ongoing strategy to return capital to shareholders while maintaining a robust balance sheet.
Ownership Trends
The trend in ownership indicates a strong institutional presence, with Vanguard and BlackRock leading the pack. As of September 30, 2024, total institutional ownership stands at approximately 30.7%, reflecting a stable investment community backing Mastercard’s long-term growth strategy.
| Ownership Type | Percentage of Total Shares |
|---|---|
| Institutional Investors | 30.7% |
| Individual Investors | 69.3% |
Mastercard Incorporated (MA) Mission Statement
Mission Statement Overview
The mission of Mastercard Incorporated is to connect and power an inclusive digital economy that benefits everyone, everywhere by making transactions safe, simple, smart, and accessible. The company aims to provide innovative solutions that enhance the customer experience and promote financial inclusion globally.
Key Financial Metrics
As of September 30, 2024, Mastercard's financial performance reflects its commitment to growth and innovation in the digital payment landscape. Below is a summary of key financial metrics:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Revenue ($ in millions) | 7,369 | 6,533 | 20,678 | 18,550 |
| Operating Expenses ($ in millions) | 3,365 | 2,689 | 9,034 | 7,914 |
| Operating Income ($ in millions) | 4,004 | 3,844 | 11,644 | 10,636 |
| Net Income ($ in millions) | 3,263 | 3,198 | 9,532 | 8,404 |
| Diluted Earnings Per Share ($) | 3.53 | 3.39 | 10.25 | 8.85 |
Growth Drivers
The growth in Mastercard's net revenue for Q3 2024 reflects a 13% increase year-over-year, driven by strong performance in both its payment network and value-added services and solutions. The following table outlines the growth drivers:
| Growth Driver | Q3 2024 Growth (%) | Q3 2023 Growth (%) |
|---|---|---|
| Payment Network Revenue | 10% | 8% |
| Value-Added Services Revenue | 18% | 17% |
| Cross-Border Volume Growth | 17% | 26% |
Shareholder Returns
Mastercard has consistently returned value to its shareholders through dividends and share repurchases. Below are the details regarding shareholder returns for the nine months ended September 30, 2024:
| Type | Amount ($ in millions) |
|---|---|
| Total Dividends Paid | 1,842 |
| Total Shares Repurchased | 7,565 |
Future Outlook
Mastercard's mission to enhance digital payment solutions is further supported by its strong financial performance and market position. The company continues to focus on expanding its global footprint and integrating innovative technologies to meet consumer demands.
Conclusion
Mastercard's commitment to creating a more inclusive digital economy is evident in its strategic initiatives and financial results. The company is well-positioned to leverage its strengths in the evolving payment landscape.
How Mastercard Incorporated (MA) Works
Business Model
Mastercard operates as a global payments technology company, facilitating electronic payments between consumers, merchants, financial institutions, businesses, and government entities. The company generates revenue primarily through its payment network and value-added services.
Financial Performance
As of September 30, 2024, Mastercard reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $7,369 million | $6,533 million | 13% |
| Operating Expenses | $3,365 million | $2,689 million | 25% |
| Operating Income | $4,004 million | $3,844 million | 4% |
| Net Income | $3,263 million | $3,198 million | 2% |
| Diluted EPS | $3.53 | $3.39 | 4% |
Key Revenue Drivers
The increase in net revenue was attributed to growth in both the payment network and value-added services. Key revenue components for Q3 2024 included:
| Revenue Source | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Payment Network Revenue | $4,629 million | $4,210 million | 10% |
| Value-Added Services | $2,740 million | $2,323 million | 18% |
Operational Metrics
Mastercard’s operational metrics for Q3 2024 included:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Gross Dollar Volume (GDV) | 9% growth | 10% growth | - |
| Cross-Border Volume Growth | 17% | 21% | - |
| Switched Transactions | 11% growth | 15% growth | - |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Mastercard reported:
| Cash Flow Type | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $9,946 |
| Net Cash Used in Investing Activities | $(724) |
| Net Cash Used in Financing Activities | $(6,795) |
Debt Structure
As of September 30, 2024, Mastercard's total debt outstanding was $18.4 billion, with the following notable issuances:
| Debt Issuance | Principal Amount (in millions) | Maturity Date | Effective Interest Rate (%) |
|---|---|---|---|
| 2024 USD Notes | $750 | January 2028 | 4.100 |
| 2024 USD Notes | $1,150 | January 2032 | 4.350 |
| 2024 USD Notes | $1,100 | January 2035 | 4.550 |
| 2024 USD Notes | $1,000 | May 2034 | 4.875 |
Shareholder Returns
For the nine months ended September 30, 2024, Mastercard repurchased 16.5 million shares for $7.6 billion and paid dividends totaling $1.8 billion. The average price paid per share during this period was $458.36.
Effective Tax Rate
Mastercard's effective income tax rates were:
| Period | Effective Tax Rate (%) |
|---|---|
| Q3 2024 | 15.6 |
| Q3 2023 | 15.0 |
Conclusion
The financial and operational performance of Mastercard, as of 2024, demonstrates robust growth across its payment network and value-added services. The company maintains a strong cash flow position and effective management of its debt and shareholder returns.
How Mastercard Incorporated (MA) Makes Money
Revenue Streams
Mastercard generates revenue primarily through two main segments: its payment network and value-added services and solutions.
| Revenue Segment | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Increase/Decrease (%) |
|---|---|---|---|
| Payment Network | 4,629 | 4,210 | 10% |
| Value-Added Services and Solutions | 2,740 | 2,323 | 18% |
| Total Net Revenue | 7,369 | 6,533 | 13% |
Payment Network Revenue
The payment network revenue consists of transaction processing fees, cross-border transaction fees, and other assessments. In Q3 2024, Mastercard reported:
- Transaction processing assessments of $3,587 million, up 13% from Q3 2023.
- Domestic assessments of $2,641 million, an increase of 7% year-over-year.
- Cross-border assessments of $2,804 million, which rose 21% compared to the prior year.
Value-Added Services and Solutions
This segment includes consulting, marketing services, fraud prevention, and security services. The revenue from value-added services and solutions increased by 18% year-over-year, driven by:
- Growth in consulting and marketing services.
- Enhanced fraud and security solutions.
- Increased pricing for services offered.
Key Financial Metrics
Mastercard's financial performance highlights for Q3 2024 include:
| Metric | Q3 2024 | Q3 2023 | Increase/Decrease (%) |
|---|---|---|---|
| Operating Income | 4,004 | 3,844 | 4% |
| Net Income | 3,263 | 3,198 | 2% |
| Diluted Earnings Per Share | 3.53 | 3.39 | 4% |
Operational Performance
Mastercard's operational metrics for Q3 2024 show growth in key areas:
- Switched transactions increased by 11% year-over-year.
- Gross Dollar Volume (GDV) growth was 9% in USD terms, while local currency growth was 10%.
- Cross-border volume growth reached 17% in USD terms.
Cost Structure
The total operating expenses for Q3 2024 were reported at $3,365 million, reflecting a 25% increase from Q3 2023. Key components include:
- General and administrative expenses at $2,744 million, up 20% year-over-year.
- Advertising and marketing expenses increased to $220 million, a 14% rise.
- Provision for litigation amounting to $176 million.
Cash Flow Highlights
For the nine months ended September 30, 2024, Mastercard reported:
- Net cash provided by operating activities of $9,946 million.
- Cash used in investing activities of $724 million.
- Cash used in financing activities of $6,795 million.
Debt and Equity Management
As of September 30, 2024, Mastercard's total debt stood at $18.4 billion, marking an increase from $15.7 billion at the end of 2023. Key debt issuances during 2024 include:
- $4 billion in total debt issued, with $1 billion due in 2034 and $750 million due in 2028.
| Debt Issuance | Principal Amount ($ millions) | Due Date |
|---|---|---|
| 2024 USD Notes | 1,000 | May 2034 |
| 2024 USD Notes | 750 | January 2028 |
| 2024 USD Notes | 1,150 | January 2032 |
| 2024 USD Notes | 1,100 | January 2035 |
Dividends and Share Repurchases
Mastercard declared total dividends of $1,833 million for the nine months ended September 30, 2024, with quarterly dividends at $0.66 per share. Additionally, the company repurchased 16.5 million shares for $7.6 billion during the same period.
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Article updated on 8 Nov 2024
Resources:
- Mastercard Incorporated (MA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Mastercard Incorporated (MA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Mastercard Incorporated (MA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.