Mastercard stock rises after Q2 results beat estimates, lifts revenue outlook

Mastercard stock MA gained after reporting stronger-than-expected second-quarter results on Thursday, with higher revenue, earnings and payment volumes driven by continued strength in its payment network and value-added services business.

The payments giant posted adjusted earnings of $5.04 per share, beating analysts' consensus estimate of $4.77. Revenue increased 14% year over year to $9.28 billion, ahead of Wall Street expectations of $9.08 billion.

On a GAAP basis, net income rose 19% to $4.39 billion, while diluted earnings per share increased 22% to $4.97. Operating income climbed 17% to $5.59 billion, with operating margin expanding to 60.2% from 58.7% a year earlier.

Following the results, Mastercard slightly raised its full-year revenue outlook. 

The company now expects revenue growth in the "low teens," compared with its previous forecast of low-double-digit to low-teen growth.

Investors welcomed the results, sending Mastercard shares more than 2.2% higher in Thursday trading.

Payment volumes and value-added services drive growth

Mastercard's operational metrics pointed to continued resilience in consumer spending and digital payments.

Switched transactions, which measure the number of authorizations and clearings processed across Mastercard's network, increased 9% year over year to 47.4 billion.

Gross dollar volume rose 8% on a local-currency basis to $2.88 trillion, exceeding analyst expectations. 

Purchase volume increased 10%, while cross-border volume grew 12% on a constant-currency basis, ahead of estimates despite slowing from the prior year's 15% growth.

Payment network revenue rose 10% during the quarter, while value-added services and solutions revenue climbed 20%, reflecting demand for security, digital authentication, consumer engagement and business insights offerings.

Chief Executive Officer Michael Miebach said, "We delivered above expectations with net revenue growth at 14% year-over-year, or 12% on a currency-neutral basis in the second quarter."

He added that new partnerships and the company's Agentic Payment capability are helping shape the future of commerce.

Chief Financial Officer Sachin Mehra also highlighted the company's performance, saying, "These results, despite an uncertain geopolitical and economic backdrop, are evidence of the resilience of our diversified business model and our continued focus on execution across both payment network and value added services and solutions."

Outlook improves as Mastercard expands beyond payments

Mastercard said geopolitical disruptions in the Middle East were less severe than initially expected during the quarter.

Mehra told analysts, "As we look to the rest of the year, we estimate impacts from the Middle East conflict will remain at similar levels to what we saw towards the end of Q2."

The company also continues to expand its business beyond traditional card payments. 

During the earnings call, Miebach highlighted new partnerships, including an exclusive agreement with Saudi Arabia's Riyadh Air.

Like other payment companies, Mastercard is also investing in stablecoin infrastructure. 

Alongside Visa and Stripe, the company is supporting a new US dollar-backed stablecoin known as Open USD.

Mastercard continued returning capital to shareholders during the quarter, repurchasing 9.8 million shares for $4.9 billion and paying $771 million in dividends. 

Through July 27, it bought back another 1.3 million shares for approximately $700 million, leaving $7.8 billion available under its existing repurchase authorization.

The company ended the quarter with $11.29 billion in cash and cash equivalents, up from $10.57 billion at the end of 2025.

It maintained its expectation for low double-digit, currency-neutral revenue growth and operating expense growth in the low double digits on a non-GAAP basis.