Earnings Call Insights: Mastercard Incorporated (MA) Q3 2025
Management View
- CEO Michael Miebach reported “We delivered strong results in the third quarter. Net revenues were up 15% overall, and value-added services and solutions net revenue was up 22% versus a year ago on a non-GAAP currency-neutral basis.” He highlighted healthy consumer and business spending, a supportive macroeconomic environment, and record financial markets as tailwinds.
- Miebach described ongoing momentum in partnerships, citing “multiple co-brand wins with large airlines and retailers, including Japan Airlines, the Comair in Mexico and Uni-President Group in Taiwan,” and renewed global bank collaborations such as with Nordea. He announced Mastercard as “neobank’s exclusive network partner in the U.S. as that card program launches.”
- Strategic product launches included the Mastercard World Legend card and Mastercard Collection for affluent customers, along with wins of several key affluent portfolios globally, and partnerships with major banks in Brazil on new portfolios.
- Miebach emphasized expansion in acceptance, especially in underpenetrated sectors like rent and transit, noting “Mastercard GDV on open-loop transit systems increased 25% year-over-year on a local currency basis.”
- On innovation, he said “Agentic Commerce is here, and we’re at the center of it,” referencing partnerships with OpenAI, Google, and Cloudflare, and introducing Mastercard Agent Pay with initial U.S. Bank and Citibank cardholder rollouts and a global expansion planned for next year.
- The company is expanding in stablecoin and crypto, with “approximately 130 crypto co-brand card programs in market” and new partnerships with MetaMask and Binance.
- Miebach cited “over 35% transaction growth” in Mastercard Move disbursement and remittance capabilities, and continued scaling of B2B and T&E virtual card partnerships.
- The services segment saw new offerings including “on-demand decisioning” for issuers, a “merchant cloud offering,” and the launch of “Mastercard Threat Intelligence.” He also highlighted the introduction of “Mastercard Commerce Media, a new digital media network that makes advertising more personalized, relevant and effective.”
- CFO Sachin Mehra stated “Net revenue was up 15%, reflecting continued growth in our payment network and our value-added services and solutions. Acquisitions contributed 1 ppt to this growth. Operating expenses increased 14%, including a 4 ppt increase from acquisitions. And operating income was up 15%. Net income and EPS increased 8% and 11%, respectively.” He reported EPS of $4.38 and $3.3 billion in share repurchases during the quarter.
Outlook
- The company expects “year-over-year net revenue growth to be at the high end of a low double-digits range on a currency-neutral basis, excluding acquisitions” for Q4, with acquisitions forecasted to add 1 to 1.5 ppt and a tailwind of 4 to 4.5 ppt from foreign exchange. Operating expense growth for Q4 is expected “at the low double digits range versus a year ago.”
- For full year 2025, “net revenues to grow at the low teens range on a currency-neutral basis, excluding acquisitions.” Acquisitions are expected to add 1 to 1.5 ppt and a 1 to 2 ppt FX tailwind. Operating expense growth for the year is projected at “the low end of a low double-digits range,” with acquisitions adding 4 to 5 ppt.
- Management highlighted ongoing geopolitical and economic uncertainty as a potential risk but reiterated a positive outlook supported by a diversified business model.
Financial Results
- Net revenue was up 15% in Q3. Value-added services and solutions net revenue increased 22%, with acquisitions contributing 3 ppt. Operating income rose 15% and net income increased 8%. EPS was $4.38 for the quarter, including a $0.10 contribution from share repurchases.
- Worldwide gross dollar volume (GDV) increased by 9%. U.S. GDV rose by 7%, while volumes outside the U.S. increased 10%. Cross-border volume increased 15% globally.
- Switched transactions grew 10% year-over-year; contactless penetration reached 77% of all in-person switched purchase transactions, up 6 ppt year-over-year.
- Payment Network net revenue increased 10%. Value-added services and solutions net revenue increased 22%, with underlying organic growth of 19%.
- Total adjusted operating expenses rose 14%. Operating expenses were “lower than expected this quarter, primarily due to the timing of expenses between the third and fourth quarter.”
Q&A
- Bryan Bergin, TD Cowen, asked about U.S. payment volume growth and consumer behavior. CFO Mehra responded, “drivers continue to hold up really well… continued steady growth, both across affluent and mass market, true in the U.S., true across the globe.”
- Darrin Peller, Wolfe Research, inquired about value-added services (VASS) growth and Capital One migration impacts. CEO Miebach described demand for cybersecurity and data-driven services, while Mehra specified “VASS this quarter of 22%, 3 points of that was driven by the acquisitions in Recorded Future and Minna… underlying organic growth of approximately 19%.” On Capital One, Mehra stated “the debit migration is underway… in 2025, we did not expect the net revenue impact from this Capital One debit migration to be material.”
- James Faucette, Morgan Stanley, questioned risks in agentic commerce. CEO Miebach discussed “behavioral change, driven and powered by generative AI and bots,” and outlined certification and security standards for bots, emphasizing “the complexities that we’re pretty good at solving in today’s world.”
- Jason Kupferberg, Wells Fargo, asked about opening new acceptance channels and the M&A pipeline. CEO Miebach noted “progress” in rent verticals and a focus on healthcare and tourism, while Mehra described the M&A pipeline as “robust” and “primarily focused on services.”
- Bryan Keane, Citi, sought clarity on agentic commerce differentiation and Capital One migration timing. CEO Miebach said, “this is going to be very hard to do for local payment networks,” and Mehra provided, “the conversion is underway. We expect the conversion to complete in 2026.”
- Harshita Rawat, Bernstein, asked about Mastercard Commerce Media. CEO Miebach described “initial reception is interested” and unique data-driven positioning, but stated it was still “early days.”
- Tien-tsin Huang, JPMorgan, probed on recent build projects in VASS and crypto infrastructure interest. CEO Miebach highlighted Commerce Media as “a pretty big bet for us” and declined to comment on market rumors.
- Andrew Schmidt, KeyBanc, asked about cross-border volume sustainability. CFO Mehra cited “winning the right portfolios” and “strong growth in card-not-present ex-travel for cross-border.”
- Tim Chiodo, UBS, discussed cross-border acceptance and network moats. CEO Miebach explained “it’s hard to do and it took a long time to build it,” emphasizing global partnerships and domestic licenses.
- Sanjay Sakhrani, KBW, inquired about pricing trends and Capital One volumes. Mehra confirmed pricing as a tailwind and described U.S. volume impacts from Capital One migration and weather, stating “the cards are migrating over, and they will continue to through the course of the fourth quarter and going into the early part of next year.”
Sentiment Analysis
- Analysts focused on sustainability of growth in value-added services, agentic commerce, pricing, Capital One migration, and new product launches, with a tone ranging from neutral to slightly positive. Questions probed for clarity on risk and long-term sustainability rather than expressing skepticism or strong concern.
- Management maintained a confident tone in prepared remarks and Q&A, emphasizing innovation, strategic wins, and strong fundamentals. CEO Miebach repeatedly referred to “opportunity” and described the company as “positioned well” for ongoing growth. CFO Mehra provided detailed clarifications without visible defensiveness.
- Compared to the previous quarter, analyst and management sentiment remained stable, with consistent confidence and focus on execution amid some ongoing uncertainty.
Quarter-over-Quarter Comparison
- Q3 guidance language remained consistent with Q2, projecting “year-over-year net revenue growth to be at the high end of a low double-digits range.” Operating expense forecasts were similar in structure but updated for current quarter currency and acquisition effects.
- Strategic focus shifted toward agentic commerce, expansion of Mastercard Agent Pay, and the launch of Mastercard Commerce Media, compared to Q2’s emphasis on contactless, tokenization, and digital wallets.
- Analysts in both quarters focused on growth drivers, pricing power, and partnership wins, with more attention in Q3 to agentic commerce and Capital One migration impacts.
- Key metrics such as net revenue growth, GDV, and cross-border volume growth remained strong and stable quarter-over-quarter, with consistent commentary on healthy consumer and business spending.
- Management’s confidence in long-term growth drivers and innovation was reiterated, with added detail on new service offerings and market penetration strategies this quarter.
Risks and Concerns
- Management acknowledged “ongoing geopolitical and economic uncertainty” and “some ongoing geopolitical and economic uncertainty” as potential risks to the outlook.
- The Capital One debit migration was discussed as an adverse impact to net revenue in 2026 and 2027, with mitigation from contractual obligations but not a full offset.
- CEO Miebach highlighted the complexity and emerging legal/regulatory frameworks as risks in agentic commerce, stating “there’s legal questions, there’s a security question… that will evolve over time.”
- Analyst concerns focused on the sustainability of value-added services growth, competitive differentiation in agentic commerce, and the potential for volatility in U.S. volumes from Capital One migration and external factors like weather.
Final Takeaway
Mastercard’s third quarter showcased strong revenue and earnings growth, propelled by continued expansion in value-added services, international partnerships, and innovative launches in agentic commerce and digital media. Management emphasized confidence in the company’s diversified business model and execution capabilities, while addressing headwinds from partner migrations and macro uncertainty. The forward outlook points to sustained double-digit revenue growth and ongoing investment in strategic priorities, positioning Mastercard for continued leadership in the evolving payments landscape.