Mastercard reported a substantial increase in its Q2 earnings, exceeding expectations, as customers resumed spending on travel and entertainment despite fears of a recession and rising interest rates. The New York-based company made a profit of $2.7 billion in the three months up to June 30, reflecting a 10% increase from last year.
Earnings Beat Estimates
According to a Reuters report, the company’s profit of $2.89 per share surpassed the predicted $2.82 per share, according to data from Refinitiv IBES. Darrin Peller, an analyst from Wolfe Research, commented on the positive results, stating that Mastercard could compound well throughout 2023.
Mastercard Outperforms Visa and American Express
The report noted that Mastercard shares have risen nearly 16% this year, surpassing competitors Visa and American Express. This comes as part of a lukewarm earnings season for card issuers, who have felt the pressure after being relatively stable compared to other industries in the previous year.
Increase in Gross Dollar Volumes and Cross-Border Volume
The report noted that the gross dollar volumes, representing the total value of all processed transactions, increased by 12% to $2.3 trillion compared to a year ago.
Cross-border volume, indicative of travel demand as it tracks spending on cards outside the country of issue, saw a significant 24% increase. Mastercard CEO Michael Miebach highlighted this increase, noting that cross-border travel volume had reached 154% of pre-pandemic levels.
Net Revenue Growth
Mastercard’s net revenue increased by 14% to $6.3 billion, indicating strong growth in the quarter.
Learn more in the entire Reuters report.