Mastercard Q3 earnings beat amid healthy consumer spending

Mastercard (NYSE:MA) Q3 earnings came in stronger-than-expected on Thursday as gross dollar volume increased on the strength of resilient consumer spending.

Q3 adjusted EPS of $3.89, beating the average analyst estimate of $3.75, increased from $3.59 in Q2 and $3.39 in last year’s Q3.

Q3 revenue of $7.37B, topping the $7.27B consensus, rose from $6.96B in the previous quarter and $6.53B a year ago.

“These results reflect healthy consumer spending and ongoing solid demand for our value-added services and solutions, where net revenue increased 18%, or 19% on a currency-neutral basis,” said CEO Michael Miebach.

Mastercard (NYSE:MA) stock increased 1.4% in premarket trading.

Q3 gross dollar volume of $2.50T, vs. the Visible Alpha consensus of $2.49T, climbed from $2.49T in Q2 and $2.30T in Q3 2023,

Payment network net revenue rose 10% Y/Y, or 11% on a currency-neutral basis. Payment network rebates and incentives provided to customers rose 17%. Value-added services and solutions net revenue climbed 18%, or 19% on a currency-neutral basis.

Cross-border volume growth of 10% Y/Y, local currency basis, compared with a 17% pace in the previous quarter.

Switched transactions rose 11% Y/Y vs. an 11% pace in Q2.

Q3 adjusted operating expenses of $3.0B increased from $2.8B in the prior quarter and $2.7B a year ago.

Q3 adjusted operating margin narrowed to 59.3% from 59.4% in Q2 and increased from 58.8% in last year’s Q3.

Looking past Q3, for Oct. 1-28, switched volumes increased/decreased 12% Y/Y, vs. 9% in September. Switched transactions grew 11%, vs. 10% in September. Cross-border volume rose 18% Y/Y, vs. 16% in September.

Conference call at 9:00 AM ET.

Earlier, Mastercard (NYSE:MA) non-GAAP EPS of $