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Mastercard raises revenue outlook for 2018

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Mastercard raises revenue outlook for 2018

Mastercard Inc. executives expect the strong growth seen in 2017 to continue in 2018.

For full year 2017, the payments giant reported net revenue of $12.5 billion, a 16% increase from its full-year 2016 results. The company increased its 2018 net revenue guidance to 13% to 14%, up from 12% to 13%, and it also expects EPS to increase in the mid-20% range, up from previous guidance of about a 20% increase, management said during a conference call to discuss fourth-quarter 2017 results.

Mastercard reported an adverse charge of $873 million, or 82 cents per share, in total tax impacts from the recently enacted Tax Cuts and Jobs Act, CFO Martina Hund-Mejean said during the call. That amount included a $629 million repatriation charge and a $157 million charge for the company's revaluation of deferred tax assets and liabilities at the lower corporate tax rate, she said.

President and CEO Ajaypal Banga said he views U.S. tax reform as a "very positive development" for the country, particularly in the near term.

As a result of tax benefits, Mastercard plans to up its employee 401(k) match to 10%, Banga said. That will take effect this year, but Hund-Mejean said a date for the increase has not been set. The executives said Mastercard will invest $500 million over the next several years to its Center for Inclusive Growth, a think tank that encourages sustainable economic growth. Of that amount, $100 million is expected to be charged in the first quarter.

Banga said the company also plans to make additional investments, particularly in digital, technology, data and faster automated clearing house payments.

"We will absolutely accelerate investments, both on an organic and inorganic basis," he said.

The executives also touted a strong deal pipeline looking ahead into 2018. Hund-Mejean said the company will have "similarly robust" deal activity through the year, as there are many market players looking to partner with Mastercard.