Mastercard (MA) Reports 49% Profit Jump Due To Travel Spending

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Ollie Martin
Updated: 29 Apr 2022

Key points:

  • Mastercard relishes consumer travel spending bounce
  • Revenue rose to $5.2B from $4.2B
  • Cross-border spending grew 53% year over year

Shares of payment provider Mastercard (NYSE: MA) were up around 3% in premarket trading today, before reversing to a loss of 3% with the opening bell. The payment giant easily and unsurprisingly topped expectations for the first quarter, relishing the strong bounce in travel spending after two years of pent-up consumer demand. Cross-border travel spending has surpassed 2019 levels for the first time since the beginning of the pandemic.

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Mastercard reported net income of  $2.6B, or EPS of $2.68 per share; up from $1.8B or $1.83 per share in Q121. Revenue rose to $5.2B from $4.2B, edging past the analyst expectation of $4.9B. The company also pointed to a 17% increase in gross dollar volume and a 21% increase in purchase volume, gross volume is the metric used representing the total dollar value of all transactions processed by Mastercard. 

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The company noted that despite the problematic economic climate, the company is off to a powerful start thanks to the strong rebound in cross-border spending; growing 53% year over year. The story was much the same in Visa’s quarterly report earlier in the week, and American Express last week. 

The company finished Q1 on an upbeat note, with spending momentum gaining despite various headwinds from inflation and looming fears of growing Covid variants. It will be interesting to see how the following quarters shape up for payment providers, given that inflation will continue to weigh on consumer spending; and will probably overshadow the brief travel boom. MA stock currently trades at a loss of 3.4%, down just 1% YTD.

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