Mastercard posted stronger than expected fourth quarter earnings as consumer spending stayed solid, especially in travel and daily essentials. Along with the upbeat results, the payments giant announced it will cut around 4% of its global workforce as part of a restructuring plan aimed at shifting investment priorities.
Mastercard Beats Wall Street Forecasts in Q4
Mastercard reported an adjusted profit of $4.76 per share, beating analysts’ estimate of $4.25. Revenue also came in slightly above expectations at $8.81 billion, compared with forecasts of $8.78 billion (LSEG data).
Following the report, Mastercard shares rose more than 1.7% in early trading.
Mastercard to Cut Jobs After Strategic Review
The company said it will lay off roughly 4% of employees worldwide, which could impact more than 1,400 workers, based on Mastercard’s workforce of about 35,300 employees as of December 2024.
CEO Michael Miebach said the company recently completed a strategic review and plans to reduce roles in certain areas while increasing focus and investment in others.
Executives also told analysts the restructuring will lead to a charge of around $200 million in the current quarter.
Spending Holds Up Despite Economic Uncertainty
Even with uncertainty linked to trade policies, inflation pressures, and a slower labor market, Mastercard said consumer activity stayed resilient.
Key spending highlights:
- Gross dollar volume rose 7% in the quarter
- Growth was supported by spending on travel, leisure, and everyday essentials
- Households continue to prioritize necessities
- Higher income consumers are still spending on discretionary purchases
Cross Border Volumes Jump 14%
Mastercard also reported a 14% rise in cross border volumes, which measures spending on cards outside the country where they were issued. This shows international travel and global purchases remained strong.
Payments Sector Earnings Begin
Mastercard is the first major payments processor to report earnings this cycle. Competitor Visa is scheduled to report later in the day, while American Express is expected to release results early Friday.
Meanwhile, credit card balances at US banks rose slightly in the latest quarter, signaling consumers continue borrowing even with high interest rates.
