Analysis of Geographic Areas
Mastercard Inc. operates in 2 regions: United States and Other countries.
Area Asset Turnover
Mastercard Inc., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 6.53 | 5.41 | 4.26 | 4.71 | 8.05 |
| Other countries | 16.87 | 16.25 | 14.30 | 16.86 | 32.52 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
An analysis of asset turnover ratios across geographic segments reveals a synchronized trend of contraction followed by a gradual recovery between 2018 and 2022. Both the United States and international markets experienced a significant decline in asset efficiency peaking in 2020, after which a steady upward trajectory was established.
- United States Asset Turnover
- The asset turnover ratio in the United States began at 8.05 in 2018 before experiencing a sharp decline to 4.71 in 2019 and reaching a five-year low of 4.26 in 2020. A recovery phase followed, with the ratio increasing to 5.41 in 2021 and further improving to 6.53 by the end of 2022. Despite this recovery, the 2022 figure remains below the 2018 baseline.
- Other Countries Asset Turnover
- International operations exhibited higher volatility and a more pronounced initial decline. The ratio dropped from 32.52 in 2018 to 16.86 in 2019, reaching a nadir of 14.30 in 2020. Similar to the domestic trend, international asset turnover trended upward in the subsequent years, recording 16.25 in 2021 and 16.87 in 2022.
- Comparative Geographic Performance
- A substantial disparity in asset utilization exists between the two segments. The asset turnover ratio for other countries consistently outperformed the United States throughout the entire period. Even at its lowest point in 2020, the international ratio of 14.30 was significantly higher than the United States peak of 8.05 in 2018, indicating a more asset-light revenue model or higher capital efficiency in markets outside the United States.
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Area Asset Turnover: United States
Mastercard Inc.; United States; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net revenue | 7,338) | 6,043) | 5,049) | 5,403) | 4,934) |
| Property, equipment and right-of-use assets, net | 1,123) | 1,117) | 1,185) | 1,147) | 613) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 6.53 | 5.41 | 4.26 | 4.71 | 8.05 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = Net revenue ÷ Property, equipment and right-of-use assets, net
= 7,338 ÷ 1,123 = 6.53
The analysis of the United States geographic segment reveals a period of significant fluctuation in asset efficiency, characterized by a sharp initial decline followed by a consistent recovery between 2018 and 2022.
- Net Revenue Trends
- Net revenue in the United States exhibited a general upward trajectory, growing from 4,934 million USD in 2018 to 7,338 million USD by 2022. A notable contraction occurred in 2020, where revenue decreased to 5,049 million USD, representing a temporary reversal of the growth trend. However, a strong recovery followed, with substantial annual increases in 2021 and 2022.
- Asset Base Evolution
- The value of property, equipment, and right-of-use assets, net, experienced a significant increase between 2018 and 2019, rising from 613 million USD to 1,147 million USD. Following this initial surge, the asset base remained relatively stable over the subsequent three years, fluctuating slightly to end at 1,123 million USD in 2022.
- Area Asset Turnover Dynamics
- The area asset turnover ratio demonstrates a U-shaped pattern over the five-year period. The ratio dropped sharply from 8.05 in 2018 to 4.71 in 2019, primarily driven by the rapid expansion of the asset base which outpaced revenue growth. The ratio reached its lowest point of 4.26 in 2020, coinciding with the decline in net revenue. Since 2020, the turnover ratio has improved steadily, climbing to 5.41 in 2021 and 6.53 in 2022, indicating that the segment is generating increasing revenue per unit of asset investment.
The overall trend suggests that while the initial increase in infrastructure or right-of-use assets temporarily diluted asset efficiency, the subsequent acceleration in revenue growth has successfully restored the segment's operational leverage.
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Area Asset Turnover: Other countries
Mastercard Inc.; Other countries; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net revenue | 14,899) | 12,841) | 10,252) | 11,480) | 10,016) |
| Property, equipment and right-of-use assets, net | 883) | 790) | 717) | 681) | 308) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 16.87 | 16.25 | 14.30 | 16.86 | 32.52 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = Net revenue ÷ Property, equipment and right-of-use assets, net
= 14,899 ÷ 883 = 16.87
The financial performance for other countries reflects a period of significant asset expansion coupled with a general upward trajectory in net revenue, despite a temporary contraction observed in 2020.
- Net Revenue Trends
- Net revenue grew from 10,016 million USD in 2018 to 14,899 million USD by 2022. A notable contraction occurred in 2020, when revenue decreased to 10,252 million USD, followed by a robust recovery in 2021 and 2022.
- Asset Base Expansion
- Property, equipment, and right-of-use assets experienced a substantial increase between 2018 and 2019, rising from 308 million USD to 681 million USD. This expansion trend continued steadily through 2022, with the asset base reaching 883 million USD.
- Area Asset Turnover Analysis
- A precipitous decline in the area asset turnover ratio is observed between 2018 and 2019, falling from 32.52 to 16.86. This shift was primarily driven by the rapid doubling of the asset base during that period. The ratio reached its lowest point of 14.30 in 2020, coinciding with the decline in net revenue. From 2021 onward, a recovery trend emerged, with the ratio increasing to 16.87 by 2022, suggesting that revenue growth began to outpace the expansion of the asset base.
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Net revenue
Mastercard Inc., net revenue by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 7,338) | 6,043) | 5,049) | 5,403) | 4,934) |
| Other countries | 14,899) | 12,841) | 10,252) | 11,480) | 10,016) |
| Total | 22,237) | 18,884) | 15,301) | 16,883) | 14,950) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total net revenue exhibited a consistent upward trajectory between 2018 and 2022, increasing from US$ 14,950 million to US$ 22,237 million. A temporary contraction occurred in 2020, where total revenue declined to US$ 15,301 million from the previous year's US$ 16,883 million, followed by a period of robust recovery and accelerated growth in 2021 and 2022.
- Domestic Revenue Performance
- Net revenue within the United States grew from US$ 4,934 million in 2018 to US$ 7,338 million by the end of 2022. The domestic market mirrored the overall trend, experiencing a dip to US$ 5,049 million in 2020 before expanding significantly by approximately 45% over the following two years.
- International Revenue Performance
- Revenue generated from other countries consistently represented the primary driver of total net revenue, increasing from US$ 10,016 million in 2018 to US$ 14,899 million in 2022. This segment also faced a decline in 2020, falling to US$ 10,252 million, but subsequently rebounded to achieve its highest recorded value in 2022.
- Geographic Revenue Distribution
- The proportional distribution of revenue between the United States and other countries remained remarkably stable throughout the analyzed period. The United States accounted for approximately 33% of total net revenue in 2018, and this share was maintained at approximately 33% in 2022, suggesting that growth was scaled proportionally across both domestic and international markets.
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Property, equipment and right-of-use assets, net
Mastercard Inc., property, equipment and right-of-use assets, net by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 1,123) | 1,117) | 1,185) | 1,147) | 613) |
| Other countries | 883) | 790) | 717) | 681) | 308) |
| Total | 2,006) | 1,907) | 1,902) | 1,828) | 921) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The net property, equipment, and right-of-use assets exhibit a strong upward trajectory over the five-year period from 2018 to 2022, characterized by a substantial initial increase followed by a period of steady expansion.
- Total Asset Growth
- Total assets increased from 921 million US dollars in 2018 to 2,006 million US dollars by 2022. The most significant expansion occurred between 2018 and 2019, during which total assets nearly doubled, reflecting a growth of approximately 98% in a single year.
- United States Asset Trends
- Domestic assets experienced a sharp increase from 613 million US dollars in 2018 to 1,147 million US dollars in 2019. These assets peaked in 2020 at 1,185 million US dollars before stabilizing and ending the period at 1,123 million US dollars in 2022.
- International Asset Expansion
- Assets in other countries demonstrated consistent and uninterrupted year-over-year growth. Starting at 308 million US dollars in 2018, international assets rose steadily to 883 million US dollars by 2022, representing an overall increase of approximately 186%.
- Geographic Distribution Shift
- A shift in the geographic composition of assets is evident. In 2018, United States assets accounted for approximately 66.6% of the total asset base. By 2022, this concentration decreased to approximately 56%, indicating that international asset growth has outpaced domestic growth over the analyzed period.
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