Mastercard Incorporated
MA · NYSE
Next quarter
Expected to report Jan 28, 2027 — estimated from last year’s reporting date.
Consensus is $5.12 EPS for Dec 2026 across 13 estimates, ranging $4.98 to $5.27.
MA Sep 2026
- 3.31%
- $5.14
- $5.31
- —
- $9.81B
Reported results
- $9.81B
- $5.86B
- 59.77%
- $4.63B
- $5.28
Highlights
- Earnings: Adjusted diluted EPS was $5.31, 17 cents above the $5.14 consensus, a 3.3% beat; GAAP diluted EPS was $5.28, up 22% year over year.
- Revenue: Net revenue rose 14% to $9.81 billion, both as reported and currency-neutral, from $8.60 billion a year earlier and $9.28 billion in Q2.
- Margins: Operating income increased 16% to $5.86 billion; GAAP operating margin expanded 0.9 percentage point to 59.8%, while adjusted margin reached 60.5%, up 0.7 point.
- Payment network: Revenue increased 11% to $5.75 billion, supported by 7% local-currency gross dollar volume growth to $3.0 trillion, 9% purchase volume growth, and 9% more switched transactions.
- Services: Value-added services and solutions revenue grew 19% to $4.06 billion, outpacing payment network growth on demand across several services and pricing.
- BVNK acquisition: Mastercard acquired stablecoin infrastructure provider BVNK on August 3 for $1.4 billion in cash, with up to $300 million in contingent consideration.
- Capital returns: Mastercard repurchased 5.3 million shares for $3.0 billion and paid $763 million in dividends during Q3; $4.9 billion remained authorized for buybacks as of October 26.
- Litigation: Q3 included $74 million of litigation charges, primarily merchant opt-out settlements; Block and Intuit continue to seek aggregate single damages exceeding $5 billion.
Analysis
Mastercard delivered a strong Q3 FY2026, with $9.81 billion of revenue, up 14% year over year and 5.7% from Q2’s $9.28 billion. Adjusted diluted EPS of $5.31 beat the $5.14 consensus by 3.3%; GAAP diluted EPS was $5.28, up from $4.34 a year ago and $4.97 in Q2. Operating income grew 16% to $5.86 billion, faster than revenue, and GAAP operating margin widened to 59.8% from 58.8% a year ago. Lower tax rates also supported earnings growth: the effective rate declined to 19.4% from 21.5%, reflecting higher discrete tax benefits and other tax impacts.
The print was defined by continued payment-network activity and faster-growing services. Gross dollar volume rose 7% on a local-currency basis to $3.0 trillion, while value-added services and solutions revenue climbed 19% to $4.06 billion, versus 11% growth in payment-network revenue. Expenses grew 11% as reported, below revenue growth, although adjusted expenses were up 12%. Mastercard also completed its $1.4 billion BVNK acquisition, extending its digital-asset infrastructure capabilities. Q3 capital returns totaled $3.8 billion through buybacks and dividends; litigation remains a material overhang, including claims from Block and Intuit exceeding $5 billion in aggregate single damages.
Revenue and margins
Revenue reached $9.807 billion, a 14% increase both as reported and currency-neutral. Operating expenses rose 11% as reported to $3.945 billion, while adjusted expenses increased 12% to $3.872 billion; higher general and administrative costs were the primary driver. Operating income grew 16% to $5.862 billion, lifting GAAP operating margin by 0.9 percentage point to 59.8%. Adjusted operating margin increased 0.7 point to 60.5%. Net income was $4.628 billion, up 18% year over year. The effective tax rate fell to 19.4% from 21.5%, which Mastercard attributed to higher net discrete tax benefits and other tax impacts.
Payment network activity
- Network revenue: Payment network net revenue increased 11% to $5.749 billion, including growth in customer rebates and incentives, which rose 18% as reported.
- Transaction base: Gross dollar volume was $2.952 trillion, up 7% on a local-currency basis; purchase volume grew 9% and switched transactions increased 9%.
- Cross-border: Mastercard’s headline key-driver disclosure reported cross-border volume growth of 9% on a local-currency basis.
- Regional contrast: Local-currency gross dollar volume grew 5.9% in the United States and 7.7% worldwide outside the United States; Latin America grew 21.6%.
Value-added services
Value-added services and solutions revenue increased 19% to $4.058 billion, materially faster than the payment network’s 11% growth. Mastercard cited its underlying business drivers, strong demand across several services, and pricing; acquisitions and dispositions had a minimal negative impact. The category now represents about 41% of quarterly revenue, up from about 40% a year earlier, based on reported category revenue.
BVNK acquisition
Mastercard acquired all of BVNK Holdings, a stablecoin infrastructure provider, on August 3 for $1.4 billion in cash, with potential contingent consideration of up to $300 million tied to performance targets. The preliminary purchase allocation included $363 million of identifiable intangible assets and $1.3 billion of goodwill. Mastercard said the acquisition is intended to expand its capabilities in the digital-assets ecosystem; its contribution to the quarter was not material.
Litigation exposure
The quarter included $74 million of pre-tax litigation charges, primarily settlements with merchants that opted out of the U.S. merchant class litigation. Mastercard’s accrued liability for the U.S. MDL cases was $156 million at September 30, down from $637 million at year-end, primarily because of payments during 2026. The company continues to litigate with Block and Intuit, which seek aggregate single damages exceeding $5 billion; Mastercard says it cannot estimate the potential liability if the matters proceed to a final outcome. In the U.K. and Pan-European merchant matters, unresolved damages claims exceeded £0.5 billion as of September 30.
Capital returns and funding
- Q3 distributions: Mastercard repurchased 5.3 million shares for $3.0 billion and paid $763 million in dividends.
- Year-to-date returns: Through September, it repurchased 22.9 million shares for $11.9 billion and paid $2.3 billion in dividends.
- Authorization: $4.9 billion remained under approved repurchase programs as of October 26, after a further $0.6 billion of buybacks since quarter-end.
- Funding and cash flow: The company issued $5.0 billion of notes in June. Nine-month operating cash flow was $11.9 billion, versus $12.6 billion in the prior-year period.
