Mastercard earnings top estimates; consumers still spending

Bloomberg

Mastercard's first-quarter earnings topped expectations as consumers kept spending despite cloudy macroeconomic conditions spurred by President Donald Trump's trade war.

The payments company reported $3.41 billion in adjusted net income, or $3.73 of adjusted diluted earnings per share, for the first three months of the year. Analysts had expected adjusted EPS of $3.58. Net revenue grew 17% to $7.3 billion on a currency-neutral basis.

"While there is uncertainty in the world, we've built a diversified, resilient business model and proven strategy that enables us to effectively navigate various economic environments," Chief Executive Officer Michael Miebach said in a statement Thursday.

Global purchase volume — the aggregate dollar amount of purchases made with Mastercard-branded cards — rose to $1.99 trillion, while falling short of analysts' estimates of $2.04 trillion.

Mastercard shares climbed 1.3% in early New York trading.

Consumers have continued spending even amid the threat of a recession triggered by Trump's mercurial tariff policies, benefiting global payment networks run by Mastercard and rival Visa. The latter reported earnings earlier this week that topped estimates while maintaining its full-year guidance.

Purchase, New York-based Mastercard introduced an artificial intelligence-aided shopping product Tuesday, which allows consumers to direct an AI agent to browse and buy on their behalf — another way AI is changing time-consuming processes.

Mastercard previously said its net revenue for the full year is likely to increase by a percentage in the "low double digits." On Thursday, the firm updated its guidance to predict growth in the "low teens." 

The card network earlier this week released Mastercard Agent Pay, a program that generates personalized payment experiences to consumers, merchants and issuers. The platform expands Mastercard's existing generative AI technology, which enhances customer service, security and onboarding, generating automated responses to customers. Agent Pay digs deeper into the card network's data and AI tools to help shoppers curate a mix of purchases for an event, aid merchants on supply chain management or help a retailer build a marketing or sales program.

The card network is partnering with Microsoft to scale the platform, with other partners including IBM, which is contributing B2B technology, and payment firms like PayPal's Braintree and Checkout.com for security. Security and authentication use tokenization, a process that replaces existing account numbers with one-off numbers that make the card useless if stolen. Mastercard is also using Databricks software to train the card network's gen AI engine to produce responses to users with less human interaction. 

Banks and other large organizations are pursuing similar forms of AI that are considered to be a new generation of digital assistants. Often referred to as "agentic AI," these programs respond to instructions or prompts to produce an original or suggested solution. In its early stages, banks are using the technology to improve customer service, risk assessments, onboarding and fraud protection. In another move, Mastercard has expanded an existing partnership with payment firm Corpay, including a 3% stake for Mastercard. 

—John Adams contributed to this article.