MasterCard Inc.

10/31/2024 | Press release | Distributed by Public on 10/31/2024 06:05

Mastercard Incorporated Reports Third Quarter 2024 Financial Results Form 8 K

Mastercard Incorporated Reports Third Quarter 2024 Financial Results

•Third quarter net income of $3.3 billion, and diluted earnings per share (EPS) of $3.53
•Third quarter adjusted net income of $3.6 billion, and adjusted diluted EPS of $3.89
•Third quarter net revenue of $7.4 billion, an increase of 13%, or 14% on a currency-neutral basis
•Third quarter gross dollar volume up 10% and purchase volume up 11%, on a local currency basis
Purchase, NY - October 31, 2024 - Mastercard Incorporated (NYSE: MA) today announced financial results for the third quarter 2024.

"Our strong performance this quarter, with net revenue growth of 13%, or 14% on a currency-neutral basis, highlights how we are delivering across all aspects of our business. 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 Michael Miebach, Mastercard CEO. "We continue to invest in our suite of differentiated services to grow our addressable market, protect the ecosystem and add value in every transaction. This includes the planned acquisitions of Recorded Future and Minna Technologies, which are expected to add leading AI-powered threat intelligence and subscription management capabilities to meet the needs of our customers."

Quarterly Results
Third Quarter Operating Results Increase / (Decrease)
$ in billions, except per share data
Q3 2024 Q3 2023 Reported GAAP Currency-neutral
Net revenue $7.4 $6.5 13% 14%
Operating expenses $3.4 $2.7 25% 25%
Operating income $4.0 $3.8 4% 5%
Operating margin 54.3% 58.8% (4.5) ppt (4.2) ppt
Effective income tax rate 15.6% 15.0% 0.6 ppt 0.8 ppt
Net income $3.3 $3.2 2% 3%
Diluted EPS $3.53 $3.39 4% 5%
Key Third Quarter Non-GAAP Results 1
Increase / (Decrease)
$ in billions, except per share data
Q3 2024 Q3 2023 As adjusted Currency-neutral
Net revenue $7.4 $6.5 13% 14%
Adjusted operating expenses $3.0 $2.7 12% 12%
Adjusted operating margin 59.3% 58.8% 0.5 ppt 0.7 ppt
Adjusted effective income tax rate 16.3% 15.0% 1.4 ppt 1.5 ppt
Adjusted net income $3.6 $3.2 12% 13%
Adjusted diluted EPS $3.89 $3.39 15% 16%
1 The Key Third Quarter Non-GAAP Results exclude the impact of gains and losses on the Company's equity investments, special items as described on page 11 ("Third Quarter Special Items") and/or the translational and transactional impact of currency and the related impact of the Company's foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses). See page 11 for the Company's non-GAAP adjustments and the reconciliation to GAAP reported amounts.


Q3 2024 Key Business Drivers
(YoY growth)
Gross dollar volume Cross-border volume Switched transactions
(local currency basis) (local currency basis)
up 10% up 17% up 11%
The following information is provided to aid in understanding Mastercard's third quarter 2024 results, versus the year ago period.
•Net revenue increased 13%, or 14% on a currency-neutral basis. The increase was attributable to growth in our payment network and our value-added services and solutions.
▪Payment network net revenue increased 10%, or 11% on a currency-neutral basis. Primary drivers of the increase were as follows:
•Gross dollar volume growth of 10%, on a local currency basis, to $2.5 trillion.
•Cross-border volume growth of 17% on a local currency basis.
•Switched transactions growth of 11%.
This increase in payment network net revenue includes growth in payment network rebates and incentives provided to customers. Payment network rebates and incentives increased 17%, or 19% on a currency-neutral basis, primarily due to an increase in our key drivers as well as new and renewed deals.
▪Value-added services and solutions net revenue increased 18%, or 19% on a currency-neutral basis. The increase was driven primarily by growth in our underlying key drivers, strong demand for our consulting and marketing services, the scaling of our fraud and security and our identity and authentication solutions, and pricing.
•Total operating expenses increased 25%, or 12% excluding the impact of Third Quarter Special Items. The increase in as-reported operating expenses was primarily due to higher general and administrative expenses (including a restructuring charge in the third quarter of 2024) and litigation provisions. The increase in adjusted operating expenses was primarily due to higher general and administrative expenses.
•Other income (expense) was unfavorable $55 million versus the year ago period, primarily due to unrealized fair market value adjustments on marketable equity securities. Adjusted other income (expense) was favorable $3 million versus the prior year.
•The effective tax rate for the third quarter of 2024 was 15.6%, versus 15.0% for the comparable period in 2023. The adjusted effective tax rate for the third quarter of 2024 was 16.3%, versus 15.0% for the comparable period in 2023. Both the as-reported and as-adjusted effective tax rates were higher than the prior year rates primarily due to our ability in 2023 to claim more U.S. foreign tax credits generated in 2022 and 2023, partially offset by the establishment of a valuation allowance in 2023 as well as a change in our geographic mix of earnings in the current period.
•As of September 30, 2024, the Company's customers had issued 3.4 billion Mastercard and Maestro-branded cards.
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Year-to-date Results
Year-to-date Operating Results Increase / (Decrease)
$ in billions, except per share data
2024 2023 Reported GAAP Currency-neutral
Net revenue $20.7 $18.6 11% 12%
Operating expenses $9.0 $7.9 14% 14%
Operating income $11.6 $10.6 9% 11%
Operating margin 56.3% 57.3% (1.0) ppt (0.8) ppt
Effective income tax rate 16.1% 18.6% (2.4) ppt (2.4) ppt
Net income $9.5 $8.4 13% 15%
Diluted EPS $10.25 $8.85 16% 17%
Key Year-to-date Non-GAAP Results 1
Increase / (Decrease)
$ in billions, except per share data 2024 2023 As adjusted Currency-neutral
Net revenue
$20.7 $18.6 11% 12%
Adjusted operating expenses $8.4 $7.7 10% 10%
Adjusted operating margin 59.2% 58.6% 0.6 ppt 0.8 ppt
Adjusted effective income tax rate 16.6% 19.0% (2.4) ppt (2.4) ppt
Adjusted net income $10.0 $8.6 16% 18%
Adjusted diluted EPS $10.78 $9.08 19% 20%
1 The Key Year-to-date Non-GAAP Results exclude the impact of gains and losses on the Company's equity investments, special items as described on page 12 ("Year-to-date Special Items") and/or the translational and transactional impact of currency and the related impact of the Company's foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses). See page 12 for the Company's non-GAAP adjustments and the reconciliation to GAAP reported amounts.
Year-to-date 2024 Key Business Drivers
(YoY growth)
Gross dollar volume Cross-border volume Switched transactions
(local currency basis) (local currency basis)
up 10% up 17% up 11%
The following information is provided to aid in understanding Mastercard's year-to-date 2024 results, versus the year ago period.
•Net revenue increased 11%, or 12% on a currency-neutral basis. The increase was attributable to growth in our payment network and our value-added services and solutions.
▪Payment network net revenue increased 8%, or 9% on a currency-neutral basis. Primary drivers of the increase were as follows:
•Gross dollar volume growth of 10%, on a local currency basis, to $7.2 trillion.
•Cross-border volume growth of 17% on a local currency basis.
•Switched transactions growth of 11%.
This increase in payment network net revenue includes growth in payment network rebates and incentives provided to customers. Payment network rebates and incentives increased 17%, or 18% on a currency-neutral basis, primarily due to an increase in our key drivers as well as new and renewed deals.
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▪Value-added services and solutions net revenue increased 17%, as reported and on a currency-neutral basis. The increase was driven primarily by growth in our underlying key drivers, strong demand for our consulting and marketing services, and the scaling of our fraud and security and our identity and authentication solutions.
•Total operating expenses increased 14%, primarily due to higher general and administrative expenses (including a restructuring charge in the third quarter of 2024) and litigation provisions. Excluding the impact of Year-to-date Special Items, adjusted operating expenses increased 10%, both as adjusted and on a currency-neutral basis, primarily due to higher general and administrative expenses.
•Other income (expense) was favorable $37 million versus the year ago period, primarily due to an increase in investment income and lower net losses related to unrealized fair market value adjustments on marketable and nonmarketable equity securities, partially offset by increased interest expense related to our debt portfolio. Adjusted other income (expense) was favorable $12 million versus the prior year, primarily due to an increase in investment income, partially offset by increased interest expense related to our debt portfolio.
•The effective tax rate for year-to-date 2024 was 16.1%, versus 18.6% for the comparable period in 2023. The adjusted effective tax rate for year-to-date 2024 was 16.6%, versus 19.0% for the comparable period in 2023. Both the as-reported and as-adjusted effective tax rates were lower than the prior year rates primarily due to the establishment of a valuation allowance in 2023, partially offset by our ability in 2023 to claim more U.S. foreign tax credits generated in 2022 and 2023. Additionally, a change in our geographic mix of earnings in 2024 contributed to the lower effective income tax rate compared to the prior year.
Return of Capital to Shareholders
During the third quarter of 2024, Mastercard repurchased 6.3 million shares at a cost of $2.9 billion and paid $611 million in dividends.
Through September 30, 2024, Mastercard repurchased 16.5 million shares at a cost of $7.6 billion and paid $1.8 billion in dividends.
Quarter-to-date through October 28, the Company repurchased 2.0 million shares at a cost of $983 million, which leaves $5.6 billion remaining under the approved share repurchase programs.
Third Quarter 2024 Financial Results Conference Call Details
At 9:00 a.m. ET today, the Company will host a conference call to discuss its third quarter 2024 results. The dial-in information for this call is 1-888-330-2508 (Toll-free) and 1-240-789-2735 (Toll dial-in), using passcode 6451878. A replay of the call will be available for 30 days and can be accessed by dialing 1-800-770-2030 (Toll-free) and 1-647-362-9199 (Toll dial-in), using passcode 6451878.
A live audio webcast of this call, along with presentation slides, can also be accessed through the Investor Relations section of the Company's website at investor.mastercard.com.
Forward-Looking Statements
This press release contains forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements. When used in this press release, the words "believe", "expect", "could", "may", "would", "will", "trend" and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements that relate to the Company's future prospects, developments and business strategies. We caution you to not place undue reliance on these forward-looking statements, as they speak only as of the date they are made. Except for
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the Company's ongoing obligations under the U.S. federal securities laws, the Company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events.
Many factors and uncertainties relating to our operations and business environment, all of which are difficult to predict and many of which are outside of our control, influence whether any forward-looking statements can or will be achieved. Any one of those factors could cause our actual results to differ materially from those expressed or implied in writing in any forward-looking statements made by Mastercard or on its behalf, including, but not limited to, the following factors:
•regulation related to the payments industry (including regulatory, legislative and litigation activity with respect to interchange rates and surcharging)
•the impact of preferential or protective government actions
•regulation of privacy, data, AI, information security and the digital economy
•regulation that directly or indirectly applies to us based on our participation in the global payments industry (including anti-money laundering, countering the financing of terrorism, economic sanctions and anti-corruption, account-based payments systems, and issuer and acquirer practices regulation)
•the impact of changes in tax laws, as well as regulations and interpretations of such laws or challenges to our tax positions
•potential or incurred liability and limitations on business related to any litigation or litigation settlements
•the impact of competition in the global payments industry (including disintermediation and pricing pressure)
•the challenges relating to rapid technological developments and changes
•the challenges relating to operating a real-time account-based payments system and to working with new customers and end users
•the impact of information security incidents, account data breaches or service disruptions
•issues related to our relationships with our stakeholders (including loss of substantial business from significant customers, competitor relationships with our customers, consolidation amongst our customers, merchants' continued focus on acceptance costs and unique risks from our work with governments)
•the impact of global economic, political, financial and societal events and conditions, including adverse currency fluctuations and foreign exchange controls
•reputational impact, including impact related to brand perception and lack of visibility of our brands in products and services
•the impact of environmental, social and governance matters and related stakeholders reaction
•the inability to attract and retain a highly qualified and diverse workforce, or maintain our corporate culture
•issues related to acquisition integration, strategic investments and entry into new businesses
•exposure to loss or illiquidity due to our role as guarantor as well as other contractual obligations and discretionary actions we may take
•issues related to our Class A common stock and corporate governance structure
For additional information on these and other factors that could cause the Company's actual results to differ materially from expected results, please see the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and any subsequent reports on Forms 10-Q and 8-K.
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About Mastercard (NYSE: MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
www.mastercard.com

Contacts:
Investor Relations: Media Relations:
Devin Corr or Jud Staniar Seth Eisen
[email protected] [email protected]
914-249-4565 914-249-3153
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Consolidated Statement of Operations (Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
(in millions, except per share data) (in millions, except per share data)
Net Revenue $ 7,369 $ 6,533 $ 20,678 $ 18,550
Operating Expenses:
General and administrative 2,744 2,285 7,448 6,528
Advertising and marketing 220 193 520 561
Depreciation and amortization 225 211 666 594
Provision for litigation 176 - 400 231
Total operating expenses 3,365 2,689 9,034 7,914
Operating income 4,004 3,844 11,644 10,636
Other Income (Expense):
Investment income 76 71 231 185
Gains (losses) on equity investments, net (62) (6) (69) (95)
Interest expense (159) (151) (462) (427)
Other income (expense), net 7 3 19 19
Total other income (expense) (138) (83) (281) (318)
Income before income taxes 3,866 3,761 11,363 10,318
Income tax expense 603 563 1,831 1,914
Net Income $ 3,263 $ 3,198 $ 9,532 $ 8,404
Basic Earnings per Share $ 3.54 $ 3.40 $ 10.27 $ 8.88
Basic weighted-average shares outstanding 923 941 928 947
Diluted Earnings per Share $ 3.53 $ 3.39 $ 10.25 $ 8.85
Diluted weighted-average shares outstanding 925 943 930 949
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Consolidated Balance Sheet (Unaudited)
September 30, 2024 December 31, 2023
(in millions, except per share data)
Assets
Current assets:
Cash and cash equivalents $ 11,063 $ 8,588
Restricted security deposits held for customers 1,868 1,845
Investments 338 592
Accounts receivable 4,014 4,060
Settlement assets 1,978 1,233
Prepaid expenses and other current assets 3,039 2,643
Total current assets 22,300 18,961
Property, equipment and right-of-use assets, net of accumulated depreciation and
amortization of $2,435 and $2,237, respectively
2,176 2,061
Deferred income taxes 1,612 1,355
Goodwill 7,721 7,660
Other intangible assets, net of accumulated amortization of $2,453 and $2,209,
respectively
4,235 4,086
Other assets 9,193 8,325
Total Assets $ 47,237 $ 42,448
Liabilities, Redeemable Non-controlling Interests and Equity
Current liabilities:
Accounts payable $ 911 $ 834
Settlement obligations 2,129 1,399
Restricted security deposits held for customers 1,868 1,845
Accrued litigation 665 723
Accrued expenses 9,105 8,517
Short-term debt 750 1,337
Other current liabilities 1,866 1,609
Total current liabilities 17,294 16,264
Long-term debt 17,608 14,344
Deferred income taxes 349 369
Other liabilities 4,488 4,474
Total Liabilities 39,739 35,451
Commitments and Contingencies
Redeemable Non-controlling Interests 23 22
Stockholders' Equity
Class A common stock, $0.0001 par value; authorized 3,000 shares, 1,404 and 1,402 shares issued and 913 and 927 shares outstanding, respectively
- -
Class B common stock, $0.0001 par value; authorized 1,200 shares, 7 shares issued and outstanding
- -
Additional paid-in-capital 6,290 5,893
Class A treasury stock, at cost, 491 and 475 shares, respectively
(68,035) (60,429)
Retained earnings 70,258 62,564
Accumulated other comprehensive income (loss) (1,073) (1,099)
Mastercard Incorporated Stockholders' Equity 7,440 6,929
Non-controlling interests 35 46
Total Equity 7,475 6,975
Total Liabilities, Redeemable Non-controlling Interests and Equity $ 47,237 $ 42,448
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Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended September 30,
2024 2023
(in millions)
Operating Activities
Net income $ 9,532 $ 8,404
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of customer incentives 1,328 1,196
Depreciation and amortization 666 594
(Gains) losses on equity investments, net 69 95
Share-based compensation 418 374
Deferred income taxes (261) (239)
Other 117 88
Changes in operating assets and liabilities:
Accounts receivable 99 (484)
Settlement assets (743) 151
Prepaid expenses (2,776) (1,837)
Accrued litigation and legal settlements (59) (621)
Restricted security deposits held for customers 23 240
Accounts payable 59 (319)
Settlement obligations 731 (119)
Accrued expenses 671 43
Net change in other assets and liabilities 72 284
Net cash provided by operating activities 9,946 7,850
Investing Activities
Purchases of investment securities available-for-sale (414) (244)
Purchases of investments held-to-maturity (98) (327)
Proceeds from sales of investment securities available-for-sale 171 72
Proceeds from maturities of investment securities available-for-sale 204 155
Proceeds from maturities of investments held-to-maturity 363 116
Purchases of property and equipment (379) (294)
Capitalized software (565) (525)
Purchases of equity investments (28) (61)
Proceeds from sales of equity investments 23 44
Other investing activities (1) (73)
Net cash used in investing activities (724) (1,137)
Financing Activities
Purchases of treasury stock (7,565) (7,200)
Dividends paid (1,842) (1,624)
Proceeds from debt, net 3,960 1,554
Payment of debt (1,336) -
Tax withholdings related to share-based payments (175) (81)
Cash proceeds from exercise of stock options 163 213
Net cash used in financing activities (6,795) (7,138)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents 75 (29)
Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents 2,502 (454)
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period 10,465 9,196
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period $ 12,967 $ 8,742
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Non-GAAP Financial Information
Mastercard discloses the following non-GAAP financial measures: adjusted operating expenses, adjusted operating margin, adjusted other income (expense), adjusted effective income tax rate, adjusted net income and adjusted diluted earnings per share (as well as related applicable growth rates versus the comparable period in the prior year). As described more fully below, these non-GAAP financial measures exclude the impact of gains and losses on the Company's equity investments which includes mark-to-market fair value adjustments, impairments and gains and losses upon disposition, as well as the related tax impacts. These non-GAAP financial measures also exclude the impact of special items, where applicable, which represent litigation judgments and settlements and certain one-time items, as well as the related tax impacts. The Company excludes these special items because management evaluates the underlying operations and performance of the Company separately from these recurring and nonrecurring items.
In addition, the Company presents growth rates adjusted for the impact of currency, which is a non-GAAP financial measure. Currency-neutral growth rates are calculated by remeasuring the prior period's results using the current period's exchange rates for both the translational and transactional impacts on operating results, as well as removing the related impact of the Company's foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses). The impact of currency translation represents the effect of translating operating results where the functional currency is different from the Company's U.S. dollar reporting currency. The impact of the transactional currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency of the entity. The impact of the related realized gains and losses resulting from the Company's foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses) is recognized in the respective financial statement line item on the statement of operations when the underlying forecasted transactions impact earnings.
The Company believes that the non-GAAP financial measures presented facilitate an understanding of operating performance and provide a meaningful comparison of its results between periods. The Company's management uses non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of performance-based compensation.
The Company includes reconciliations of the requisite non-GAAP financial measures to the most directly comparable GAAP financial measures. The presentation of non-GAAP financial measures should not be relied upon as substitutes for the Company's measures calculated in accordance with GAAP.

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Non-GAAP Reconciliations (QTD)
Three Months Ended September 30, 2024
Operating expenses Operating margin Other income (expense) Effective income tax rate
Net
income
Diluted earnings per share
($ in millions, except per share data)
Reported - GAAP $ 3,365 54.3 % $ (138) 15.6 % $ 3,263 $ 3.53
(Gains) losses on equity investments 1
** ** 62 (0.3) % 63 0.07
Litigation provisions 2
(176) 2.4 % ** 0.7 % 120 0.13
Restructuring charge 3
(190) 2.6 % ** 0.3 % 147 0.16
Adjusted - Non-GAAP $ 2,999 59.3 % $ (75) 16.3 % $ 3,593 $ 3.89

Three Months Ended September 30, 2023
Operating expenses Operating margin Other income (expense) Effective income tax rate
Net
income
Diluted earnings per share
($ in millions, except per share data)
Reported - GAAP $ 2,689 58.8 % $ (83) 15.0 % $ 3,198 $ 3.39
(Gains) losses on equity investments 1
** ** 6 - % 5 -
Adjusted - Non-GAAP $ 2,689 58.8 % $ (78) 15.0 % $ 3,202 $ 3.39

Three Months Ended September 30, 2024 as compared to the Three Months Ended September 30, 2023
Increase/(Decrease)
Operating expenses Operating margin Effective income tax rate
Net
income
Diluted earnings per share
Reported - GAAP 25 % (4.5) ppt 0.6 ppt 2 % 4 %
(Gains) losses on equity investments 1
** ** (0.3) ppt 2 % 2 %
Litigation provisions 2
(7) % 2.4 ppt 0.7 ppt 4 % 4 %
Restructuring charge 3
(7) % 2.6 ppt 0.3 ppt 5 % 5 %
Adjusted - Non-GAAP 12 % 0.5 ppt 1.4 ppt 12 % 15 %
Currency impact 4
- % 0.3 ppt 0.1 ppt 1 % 1 %
Adjusted - Non-GAAP - currency-neutral 12 % 0.7 ppt 1.5 ppt 13 % 16 %
Note: Tables may not sum due to rounding.
** Not applicable

Gains and Losses on Equity Investments
1.Q3'24 and Q3'23 net pre-tax losses of $62 million and $6 million, respectively, were primarily related to unrealized fair market value adjustments on marketable equity securities.
Third Quarter Special Items
2.Q3'24 pre-tax charges of $176 million were primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation.
3.Q3'24 pre-tax charge of $190 million as a result of a restructuring action intended to streamline our organization, delivering efficiencies to enable reinvestment in our business to support the realization of our long-term growth opportunities.
Other Notes
4.Represents the translational and transactional impact of currency and the related impact of the Company's foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses).

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Non-GAAP Reconciliations (YTD)
Nine Months Ended September 30, 2024
Operating expenses Operating margin Other income (expense) Effective income tax rate Net income Diluted earnings per share
($ in millions, except per share data)
Reported - GAAP $ 9,034 56.3 % $ (281) 16.1 % $ 9,532 $ 10.25
(Gains) losses on equity investments 1
** ** 69 (0.1) % 67 0.07
Litigation provisions 2
(400) 1.9 % ** 0.5 % 281 0.30
Restructuring charge 3
(190) 0.9 % ** 0.1 % 147 0.16
Adjusted - Non-GAAP $ 8,444 59.2 % $ (211) 16.6 % $ 10,027 $ 10.78

Nine Months Ended September 30, 2023
Operating expenses Operating margin Other income (expense) Effective income tax rate Net income Diluted earnings per share
($ in millions, except per share data)
Reported - GAAP $ 7,914 57.3 % $ (318) 18.6 % $ 8,404 $ 8.85
(Gains) losses on equity investments 1
** ** 95 0.1 % 63 0.07
Litigation provisions 4
(231) 1.2 % ** 0.3 % 156 0.16
Adjusted - Non-GAAP $ 7,683 58.6 % $ (223) 19.0 % $ 8,622 $ 9.08

Nine Months Ended September 30, 2024 as compared to the Nine Months Ended September 30, 2023
Increase/(Decrease)
Operating expenses Operating margin Effective income tax rate Net income Diluted earnings per share
Reported - GAAP 14 % (1.0) ppt (2.4) ppt 13 % 16 %
(Gains) losses on equity investments 1
** ** (0.2) ppt - % - %
Litigation provisions 2, 4
(2) % 0.7 ppt 0.2 ppt 1 % 1 %
Restructuring charge 3
(2) % 0.9 ppt 0.1 ppt 2 % 2 %
Adjusted - Non-GAAP 10 % 0.6 ppt (2.4) ppt 16 % 19 %
Currency impact 5
- % 0.2 ppt - ppt 1 % 1 %
Adjusted - Non-GAAP - currency-neutral 10 % 0.8 ppt (2.4) ppt 18 % 20 %
Note: Tables may not sum due to rounding.
** Not applicable

Gains and Losses on Equity Investments
1.Year-to-date 2024 and 2023 pre-tax net losses of $69 million and $95 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.
Year-to-date Special Items
2.Year-to-date 2024 pre-tax charges of $400 million were primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation, settlements with a number of U.K. merchants and a legal provision associated with the ATM non-discrimination rule surcharge complaints.
3.Year-to-date 2024 pre-tax charge of $190 million as a result of a restructuring action intended to streamline our organization, delivering efficiencies to enable reinvestment in our business to support the realization of our long-term growth opportunities.
4.Year-to-date 2023 pre-tax charges of $231 million were primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation.
Other Notes
5.Represents the translational and transactional impact of currency and the related impact of the Company's foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses).
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Mastercard Incorporated Operating Performance
For the 3 Months Ended September 30, 2024
GDV (Bil.) Growth (USD) Growth (Local) Purchase Volume (Bil.) Growth (Local) Purchase Trans. (Mil.) Purchase Trans. Growth Cash Volume (Bil.) Growth (Local) Cash Trans. (Mil.) Cards (Mil.)
All Mastercard Credit, Charge and Debit Programs
APMEA $ 597 5.4 % 7.3 % $ 447 8.4 % 11,565 10.9 % $ 150 4.2 % 1,496 959
Canada 68 3.4 % 5.2 % 66 5.1 % 1,111 8.3 % 2 10.1 % 7 83
Europe 867 14.2 % 15.1 % 697 16.2 % 19,297 13.1 % 170 10.9 % 973 879
Latin America 202 5.2 % 18.5 % 146 21.9 % 6,502 15.0 % 57 10.5 % 470 478
Worldwide less United States 1,734 9.5 % 12.3 % 1,356 13.5 % 38,475 12.6 % 379 8.1 % 2,945 2,400
United States 768 6.7 % 6.7 % 703 7.0 % 10,867 7.2 % 65 3.3 % 301 693
Worldwide 2,502 8.6 % 10.5 % 2,058 11.2 % 49,342 11.4 % 443 7.4 % 3,247 3,093
Mastercard Credit and Charge Programs
Worldwide less United States 769 6.8 % 10.4 % 731 10.7 % 16,327 9.2 % 38 5.0 % 159 812
United States 397 5.6 % 5.6 % 387 6.0 % 4,183 5.4 % 10 (6.4) % 9 339
Worldwide 1,166 6.4 % 8.7 % 1,118 9.0 % 20,510 8.4 % 49 2.4 % 168 1,151
Mastercard Debit Programs
Worldwide less United States 965 11.7 % 13.8 % 625 17.0 % 22,148 15.2 % 340 8.4 % 2,786 1,588
United States 371 7.9 % 7.9 % 316 8.3 % 6,684 8.4 % 55 5.4 % 292 354
Worldwide 1,335 10.6 % 12.1 % 941 13.9 % 28,832 13.6 % 395 8.0 % 3,078 1,942

For the 9 Months Ended September 30, 2024
GDV (Bil.) Growth (USD) Growth (Local) Purchase Volume (Bil.) Growth (Local) Purchase Trans. (Mil.) Purchase Trans. Growth Cash Volume (Bil.) Growth (Local) Cash Trans. (Mil.) Cards (Mil.)
All Mastercard Credit, Charge and Debit Programs
APMEA $ 1,739 2.4 % 6.4 % $ 1,298 8.1 % 33,195 11.1 % $ 441 1.9 % 4,415 959
Canada 197 4.9 % 6.1 % 191 5.9 % 3,144 9.1 % 6 13.5 % 21 83
Europe 2,408 12.3 % 15.0 % 1,925 16.3 % 54,229 14.5 % 483 10.1 % 2,875 879
Latin America 608 13.1 % 18.5 % 435 21.4 % 18,706 16.4 % 173 11.8 % 1,376 478
Worldwide less United States 4,952 8.4 % 11.9 % 3,849 13.4 % 109,274 13.6 % 1,103 6.9 % 8,686 2,400
United States 2,246 6.5 % 6.5 % 2,055 6.8 % 31,462 7.1 % 190 2.9 % 875 693
Worldwide 7,198 7.8 % 10.1 % 5,905 11.0 % 140,736 12.1 % 1,293 6.3 % 9,561 3,093
Mastercard Credit and Charge Programs
Worldwide less United States 2,218 6.3 % 10.9 % 2,104 11.1 % 46,840 10.9 % 114 7.0 % 480 812
United States 1,155 5.9 % 5.9 % 1,124 6.1 % 11,999 5.8 % 31 (0.9) % 27 339
Worldwide 3,373 6.2 % 9.1 % 3,228 9.3 % 58,839 9.8 % 145 5.2 % 507 1,151
Mastercard Debit Programs
Worldwide less United States 2,734 10.2 % 12.7 % 1,745 16.3 % 62,435 15.7 % 989 6.9 % 8,206 1,588
United States 1,090 7.1 % 7.1 % 931 7.7 % 19,463 8.0 % 159 3.7 % 848 354
Worldwide 3,824 9.3 % 11.1 % 2,676 13.2 % 81,897 13.8 % 1,148 6.4 % 9,053 1,942
APMEA = Asia Pacific / Middle East / Africa
Note that the figures in the preceding tables may not sum due to rounding; growth represents change from the comparable year ago period.
Mastercard Incorporated Operating Performance
For the 3 Months ended September 30, 2023
GDV (Bil.) Growth (USD) Growth (Local) Purchase Volume (Bil.) Growth (Local) Purchase Trans. (Mil.) Purchase Trans. Growth Cash Volume (Bil.) Growth (Local) Cash Trans. (Mil.) Cards (Mil.)
All Mastercard Credit, Charge and Debit Programs
APMEA $ 566 1.8 % 6.0 % $ 421 8.1 % 10,427 11.0 % $ 146 0.3 % 1,499 929
Canada 65 4.2 % 7.1 % 64 7.0 % 1,025 10.4 % 2 13.9 % 6 78
Europe 759 22.5 % 18.6 % 603 21.7 % 17,063 19.8 % 157 7.9 % 990 789
Latin America 192 25.6 % 17.0 % 136 18.1 % 5,655 15.6 % 56 14.5 % 436 414
Worldwide less United States 1,584 13.7 % 13.1 % 1,223 15.5 % 34,171 16.0 % 361 5.6 % 2,930 2,210
United States 719 5.3 % 5.3 % 657 5.6 % 10,134 6.2 % 63 2.4 % 294 657
Worldwide 2,303 11.0 % 10.5 % 1,879 11.8 % 44,304 13.6 % 423 5.1 % 3,225 2,868
Mastercard Credit and Charge Programs
Worldwide less United States 720 11.4 % 12.2 % 682 12.1 % 14,953 12.0 % 38 13.1 % 167 778
United States 376 6.7 % 6.7 % 365 6.5 % 3,968 8.0 % 11 12.6 % 10 326
Worldwide 1,096 9.7 % 10.2 % 1,047 10.1 % 18,921 11.1 % 49 13.0 % 177 1,104
Mastercard Debit Programs
Worldwide less United States 863 15.8 % 13.9 % 541 20.1 % 19,217 19.3 % 323 4.8 % 2,763 1,432
United States 343 3.8 % 3.8 % 292 4.4 % 6,166 5.1 % 52 0.4 % 285 332
Worldwide 1,207 12.1 % 10.8 % 832 14.1 % 25,383 15.5 % 375 4.2 % 3,048 1,764

For the 9 Months ended September 30, 2023
GDV (Bil.) Growth (USD) Growth (Local) Purchase Volume (Bil.) Growth (Local) Purchase Trans. (Mil.) Purchase Trans. Growth Cash Volume (Bil.) Growth (Local) Cash Trans. (Mil.) Cards (Mil.)
All Mastercard Credit, Charge and Debit Programs
APMEA $ 1,698 2.3 % 8.4 % $ 1,252 11.0 % 29,891 12.8 % $ 445 1.9 % 4,508 929
Canada 187 4.8 % 9.9 % 182 9.6 % 2,882 12.8 % 5 20.3 % 18 78
Europe 2,144 21.4 % 23.7 % 1,687 27.3 % 47,362 23.8 % 457 12.2 % 2,904 789
Latin America 538 21.3 % 17.8 % 381 18.8 % 16,072 15.8 % 157 15.3 % 1,262 414
Worldwide less United States 4,567 12.8 % 16.3 % 3,502 19.1 % 96,207 18.5 % 1,065 8.1 % 8,691 2,210
United States 2,109 6.4 % 6.4 % 1,924 6.7 % 29,364 6.5 % 185 3.2 % 861 657
Worldwide 6,676 10.7 % 13.0 % 5,426 14.4 % 125,571 15.4 % 1,250 7.3 % 9,552 2,868
Mastercard Credit and Charge Programs
Worldwide less United States 2,086 10.6 % 14.7 % 1,973 14.5 % 42,241 12.4 % 113 18.7 % 498 778
United States 1,091 9.7 % 9.7 % 1,060 9.4 % 11,344 10.7 % 31 18.6 % 27 326
Worldwide 3,177 10.3 % 12.9 % 3,033 12.7 % 53,585 12.0 % 144 18.7 % 526 1,104
Mastercard Debit Programs
Worldwide less United States 2,481 14.8 % 17.7 % 1,529 25.6 % 53,966 23.7 % 953 7.0 % 8,193 1,432
United States 1,018 3.2 % 3.2 % 864 3.6 % 18,020 4.0 % 154 0.5 % 834 332
Worldwide 3,499 11.1 % 13.1 % 2,393 16.7 % 71,986 18.1 % 1,106 6.0 % 9,027 1,764
APMEA = Asia Pacific / Middle East / Africa
Note that the figures in the preceding tables may not sum due to rounding; growth represents change from the comparable year ago period.
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Footnote
The tables set forth the gross dollar volume ("GDV"), purchase volume, cash volume and the number of purchase transactions, cash transactions and cards on a regional and global basis for Mastercard™-branded cards. Growth rates over prior periods are provided for volume-based data.
Debit transactions on Maestro® and Cirrus®-branded cards and transactions involving brands other than Mastercard are not included in the preceding tables.
For purposes of the table: GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; "purchase volume" means the aggregate dollar amount of purchases made with Mastercard-branded cards for the relevant period; and "cash volume" means the aggregate dollar amount of cash disbursements and includes the impact of balance transfers and convenience checks obtained with Mastercard-branded cards for the relevant period. The number of cards includes virtual cards, which are Mastercard-branded payment accounts that do not generally have physical cards associated with them.
The Mastercard payment products are comprised of credit, charge, debit and prepaid programs, and data relating to each type of program is included in the tables. The tables include information with respect to transactions involving Mastercard-branded cards that are not switched by Mastercard and transactions for which Mastercard does not earn significant revenues.
Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which Mastercard volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. Mastercard reports period-over-period rates of change in purchase volume and cash volume on the basis of local currency information, in order to eliminate the impact of changes in the value of currencies against the U.S. dollar in calculating such rates of change.
The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is provided by Mastercard customers and is subject to verification by Mastercard and partial cross-checking against information provided by Mastercard's transaction switching systems. The data set forth in the cards columns is provided by Mastercard customers and is subject to certain limited verification by Mastercard. A portion of the data set forth in the cards columns reflects the impact of routine portfolio changes among customers and other practices that may lead to over counting of the underlying data in certain circumstances. All data is subject to revision and amendment by Mastercard or Mastercard's customers.
Performance information for prior periods can be found in the Investor Relations section of the Mastercard website at investor.mastercard.com.
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