Mastercard outlines tightened 2025 revenue outlook to low teens amid strong Q2 performance and expanded partnerships

Earnings Call Insights: Mastercard Incorporated (MA) Q2 2025

Management View

CEO Michael Miebach reported that “we delivered another strong quarter with our financial results exceeding our expectations. Second quarter net revenues were up 16% and adjusted net income up 12% versus a year ago on a non-GAAP currency-neutral basis.” Miebach emphasized the extension of the exclusive partnership with American Airlines and new collaborations with OnePay, Synchrony, Walmart, and Uber, as well as expanded agreements with PayPal and Afterpay. He highlighted continued momentum in the transit segment, noting over 60 new public transport operators onboarded in Q2 and the launch of Tap to Pay in the Shanghai Metro.
Miebach described Mastercard’s strategy to drive growth by “expanding acceptance, transforming the checkout experience, opening new verticals, leveraging alternative distribution channels and launching innovative new capabilities.” He cited the deployment of new offerings for affluent cardholders, the Mastercard Collection, and the launch of the world Legend Mastercard. The rollout of Mastercard One credential and the scale-up of Agentic Commerce and stablecoin solutions were also spotlighted as growth drivers.
CFO Sachin Mehra stated, “Net revenue was up 16%, reflecting continued growth in our payment network and value-added services and solutions. Acquisitions contributed 1 ppt to this growth. This growth was ahead of expectations, primarily driven by higher-than-expected revenue from FX volatility.” Mehra added, “Operating expenses increased 14%, including a full ppt increase from acquisitions. And operating income was up 17%. Net income and EPS increased 12% and 14%, respectively.” He confirmed that EPS was $4.15, which includes a $0.09 contribution from share repurchases.

Outlook

Management reported tightening the full year net revenue outlook range to the high end of the range shared at Q1, now expecting 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 tailwind of 1 to 2 ppt from foreign exchange is anticipated for the year.
For Q3, year-over-year net revenue growth is expected to be at the high end of a low double-digit range, with acquisitions adding 1 to 1.5 ppt and a tailwind of 1 to 2 ppt from foreign exchange. Operating expense growth for Q3 is projected at the low end of a low double digits range, with acquisitions forecasted to add approximately 5 ppt.
Mehra reiterated that “our non-GAAP tax rate [is expected] to be in the 20% to 21% range for both Q3 and the full year based on the current geographic mix of our business.”

Financial Results

Net revenue increased 16% and operating expenses grew 14% year-over-year on a currency-neutral basis. Operating income rose 17%, and net income and EPS increased 12% and 14%, respectively. EPS was $4.15. Mastercard repurchased $2.3 billion of stock during the quarter, with an additional $1 billion repurchased through July 28, 2025.
Worldwide gross dollar volume (GDV) increased by 9% year-over-year, with U.S. GDV up 6% and non-U.S. volume up 10%. Cross-border volume grew 15% globally. Switch transactions increased 10% year-over-year, while card growth was 6% and contactless accounted for 75% of in-person switched purchase transactions.
Payment Network net revenue grew 13%, and Value Added Services & Solutions net revenue grew 22%, with acquisitions contributing approximately 4 ppt.

Q&A

Sanjay Sakhrani, KBW: Asked about the impact of lapping portfolio wins and the Capital One and Discover debit portfolio migration. Mehra explained that lapping will remain a headwind through the rest of the year, and the impact from the Capital One debit portfolio migration is expected to be minimal for 2025, with most of the impact in 2026.
Darrin Peller, Wolfe Research: Inquired about differentiation of value-added services and pricing power. Miebach responded that Mastercard’s “carefully curated portfolio” and focus on cybersecurity and personalization drive value, allowing pricing for outcomes clients see in their P&L.
Harshita Rawat, Bernstein: Asked about international expansion in commercial POS. Miebach indicated strong short- to medium-term opportunity, emphasizing issuer partnerships and specialized SME teams.
Tien-Tsin Huang, JPMorgan: Queried revenue upside sources and performance of Recorded Future. Mehra confirmed FX volatility as the primary upside driver, with strong performance across business lines. Miebach said Recorded Future integration is progressing well, with new products in market.
Trevor Williams, Jefferies: Sought views on cross-border volume growth floors. Mehra highlighted portfolio diversification and consistent growth, noting cross-border card-not-present ex-travel is growing at about 20%.
David Koning, Baird: Asked about client incentives trends. Mehra noted incentives as a percentage of payment network assessments will rise sequentially in Q3, with competitive market dynamics ongoing.
William Nance, Goldman Sachs: Questioned the impact of consumer data fees on Finicity. Miebach said the company supports consumer-consented data sharing and is monitoring developments.
Rayna Kumar, Oppenheimer: Asked about Mastercard’s strategies in markets with strong domestic players like Pix and UPI. Miebach referenced competitive solutions and partnerships, especially in Brazil.
Craig Maurer, FT Partners: Inquired about Pillar 2 tax developments and digital identity growth. Mehra discussed the complexity of tax changes, while Miebach outlined identity as a core enabler in digital commerce.
Christopher Svensson, Deutsche Bank: Asked about U.S. consumer volume trends. Mehra attributed June-July shifts to calendar effects and social security timing, noting underlying consumer strength.
Fahed Kunwar, Redburn Atlantic: Sought clarification on pricing dynamics. Mehra said pricing follows value delivery, with potential continuing as long as value is provided.
Ken Suchoski, Autonomous Research: Queried lapping effects of pricing initiatives. Mehra confirmed lapping in the second half but stressed ongoing value creation as the basis for pricing.

Sentiment Analysis

Analyst sentiment was generally neutral to slightly positive, with inquiries focused on growth sustainability, competitive positioning, and pricing power. Questions were mostly constructive and sought clarification on ongoing trends rather than expressing skepticism.
Management maintained a confident and assertive tone in both prepared remarks and Q&A, frequently emphasizing strategy execution and differentiation. Miebach stated, “Our proven growth algorithm and differentiated solutions position us to deliver and win as we have demonstrated time and time again.”
Relative to the previous quarter, management’s tone remained confident, reinforced by outperformance and tightened guidance. Analyst tone was similarly stable, with no marked increase in skepticism.

Quarter-over-Quarter Comparison

Revenue growth slightly moderated from 17% in Q1 to 16% in Q2, while operating expense growth held steady at 14% across both quarters. GDV growth in the U.S. decelerated from 7% to 6%. Cross-border volume growth remained robust at 15% for both quarters.
Guidance language shifted from a broader range in Q1 to a tightened, high-end focus for the full year in Q2. FX volatility was a more prominent upside in Q2, whereas Q1 results cited lower rebates and incentives as a driver.
Analysts’ focus on lapping portfolio wins, pricing, and cross-border diversification remained consistent. Management’s confidence and strategic narrative around value-added services, new partnerships, and innovation showed continuity, with additional emphasis on commercial payments and digital identity in Q2.

Risks and Concerns

Management highlighted macroeconomic and geopolitical uncertainty, with Mehra noting, “ongoing geopolitical and economic uncertainty remains. With global policy shifts ongoing, we remain agile, monitoring developments and we stand ready to adjust as needed.”
Lapping of major portfolio wins and pricing initiatives are expected to weigh on growth rates through the remainder of 2025. The migration of Capital One’s debit portfolio to Discover is projected to have a minimal revenue impact this year, but will be more significant in 2026.
Client incentives as a percentage of payment network assessments are expected to increase, and management continues to monitor competitive market dynamics.

Final Takeaway

Mastercard’s second quarter showcased strong financial results, expansion of major partnerships, and continued momentum in both consumer and commercial payments. The company tightened its full-year revenue outlook to the high end of the previously shared range, reflecting confidence in sustained growth despite ongoing macro uncertainty and headwinds from portfolio lapping and pricing initiatives. Management remains focused on delivering differentiated value through innovative services, expanding global acceptance, and maintaining agility in response to changing market conditions.

Read the full Earnings Call Transcript