MasterCard reported an annual 46 per cent surge in second-quarter net profit, driven by a recovery in global spending as travel picks up and businesses reopen.
Net profit surged to $2.1 billion in the three months to June 30 -- over $700 million more than the same period last year -- and increased almost 16.7 per cent on a quarterly basis.
Revenue during the period rose 36 per cent on an annual basis to more than $4.5bn, surpassing analysts' estimates of $4.3bn.
“We delivered solid revenue and earnings growth this quarter, fuelled by the execution of our strategy and the continued recovery in domestic and cross-border spending … international travel is still in the early stages of recovery and represents additional upside potential,” MasterCard’s chief executive Michael Miebach said.
The New York-based company said card use in the US surged more than 35 per cent a year in the April-June period as the economy reopened from Covid-induced lockdowns.
Overall spending on MasterCard’s debit and prepaid cards in the US increased 26 per cent to $283bn.
During the second quarter, MasterCard repurchased about 4.6 million shares at a cost of $1.7bn and paid $434m in dividends.
In April, MasterCard announced the acquisition of Washington-based Ekata for $850m to advance its digital identity verification efforts. Ekata works with a wide range of global merchants, financial institutions, travel companies, marketplaces and digital currency platforms.
“We continue to focus on diversifying our business and investing for sustained long-term growth. With the closing of the Ekata acquisition, we are excited to have advanced our digital identity capabilities and value delivered to our customers,” added Mr Miebach.
Geographically, MasterCard is upbeat about increased vaccination rates in Canada, which is “a positive sign” in terms of driving travel into the country, MasterCard’s chief financial officer Sachin Mehra told MarketWatch.
The company is also seeing “good outbound travel” to Latin America and within Europe, but travel to the Asia-Pacific region is still limited, even as MasterCard sees improving domestic spending trends there.