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Stock Analysis on Net

Mastercard Inc. (NYSE:MA)

This company has been moved to the archive! The financial data has not been updated since April 27, 2023.

Common-Size Income Statement
Quarterly Data

Mastercard Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Net revenue 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
General and administrative -35.54 -38.13 -35.95 -35.42 -35.69 -35.70 -36.73 -37.94 -40.34 -39.44 -37.09 -41.02 -37.27 -35.77 -32.42 -33.28 -35.15 -39.14 -31.71 -31.49 -36.15
Advertising and marketing -2.91 -3.71 -3.16 -3.82 -3.50 -6.48 -4.45 -4.77 -2.86 -5.87 -4.38 -2.79 -3.84 -6.57 -5.08 -5.47 -4.94 -5.59 -6.03 -6.41 -6.26
Depreciation and amortization -3.32 -3.16 -3.21 -3.44 -3.72 -3.62 -3.77 -4.11 -3.92 -3.64 -3.67 -4.35 -3.59 -3.31 -3.07 -2.97 -3.01 -2.97 -2.85 -3.14 -3.35
Provision for litigation -3.67 -0.26 -3.61 -2.42 0.00 0.00 -0.54 -1.48 0.00 -1.09 0.00 -0.66 -0.15 0.00 0.00 0.00 0.00 -19.88 -0.74 -6.14 -3.27
Operating expenses -45.44% -45.26% -45.93% -45.10% -42.91% -45.80% -45.50% -48.30% -47.12% -50.05% -45.14% -48.82% -44.85% -45.65% -40.56% -41.72% -43.10% -67.59% -41.33% -47.18% -49.02%
Operating income 54.56% 54.74% 54.07% 54.90% 57.09% 54.20% 54.50% 51.70% 52.88% 49.95% 54.86% 51.18% 55.15% 54.35% 59.44% 58.28% 56.90% 32.41% 58.67% 52.82% 50.98%
Investment income 0.96 0.57 0.28 0.13 0.10 0.04 0.10 0.07 0.02 -0.07 0.08 0.24 0.40 0.45 0.58 0.58 0.69 1.13 0.80 0.85 0.47
Gains (losses) on equity investments, net -3.69 -0.21 1.04 -2.13 -1.47 2.13 3.95 5.37 2.26 5.34 -2.37 2.25 -4.34 2.70 -2.24 3.48 0.13 0.00 0.00 0.00 0.00
Interest expense -2.30 -2.18 -2.08 -2.07 -2.13 -2.07 -2.21 -2.34 -2.58 -2.55 -2.74 -3.03 -1.72 -1.45 -1.41 -1.24 -1.18 -1.23 -1.23 -1.31 -1.20
Other income (expense), net 0.10 0.19 0.07 0.07 0.08 -0.17 0.14 -0.07 0.12 -0.05 0.08 0.03 0.07 0.02 0.36 0.15 0.10 -0.39 -0.15 0.08 0.11
Other income (expense) -4.92% -1.63% -0.69% -4.00% -3.43% -0.08% 1.99% 3.03% -0.17% 2.67% -4.95% -0.51% -5.59% 1.72% -2.71% 2.97% -0.26% -0.50% -0.59% -0.38% -0.61%
Income before income taxes 49.63% 53.10% 53.37% 50.90% 53.67% 54.12% 56.49% 54.73% 52.71% 52.62% 49.91% 50.67% 49.56% 56.07% 56.73% 61.24% 56.65% 31.91% 58.08% 52.44% 50.36%
Income tax expense -8.56 -9.70 -9.95 -9.51 -2.75 -8.51 -8.06 -9.10 -8.71 -9.30 -10.48 -8.10 -7.33 -8.50 -9.54 -11.45 -8.77 -8.30 -9.36 -9.63 -8.69
Net income 41.08% 43.41% 43.42% 41.39% 50.92% 45.61% 48.43% 45.63% 44.00% 43.33% 39.43% 42.58% 42.23% 47.58% 47.19% 49.79% 47.88% 23.61% 48.72% 42.81% 41.68%

Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

Operational efficiency and profitability remain robust across the analyzed period, characterized by consistently high operating and net income margins, despite intermittent volatility caused by non-recurring expenses.

Operating Expense Trends
General and administrative expenses constitute the largest portion of operating costs, typically fluctuating between 31% and 41% of net revenue. While these costs remained relatively stable, a peak was observed in June 2020 at 41.02%. Advertising and marketing expenses exhibit a general downward trend, decreasing from approximately 6% of net revenue in early 2018 to 2.91% by March 2023, suggesting improved marketing efficiency or a shift in customer acquisition strategies.
Impact of Non-Recurring Items
The most significant disruption to the income statement occurred in December 2018, where a provision for litigation totaling 19.88% of net revenue led to a sharp increase in total operating expenses to 67.59%. This specific event resulted in a temporary contraction of operating income to 32.41% and net income to 23.61%. Subsequent litigation provisions have remained sporadic and generally lower, although they continue to cause quarterly fluctuations in the operating margin.
Profitability and Margin Analysis
Operating income margins have largely stabilized between 51% and 59% following the volatility of late 2018. Net income margins demonstrate a similar pattern of resilience, generally oscillating between 41% and 48%. A notable peak in net income margin reached 50.92% in March 2022, while the most recent data from March 2023 indicates a margin of 41.08%.
Financial and Other Income
Interest expenses as a percentage of net revenue have shown a gradual increase, rising from a range of 1.20% to 1.45% in 2018 to between 2.07% and 2.30% in the 2021-2023 period. Gains and losses on equity investments introduce significant quarterly volatility to the pre-tax income, with swings ranging from gains of 5.37% to losses of 4.34%, indicating a sensitivity to market valuations of the investment portfolio.

Overall, the financial structure is characterized by high operating leverage and strong bottom-line performance, with the primary risks to margin stability stemming from legal provisions and market-driven equity valuations rather than systemic increases in core operating costs.

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