Mastercard off to a strong start in 2025 as consumer spending holds up

(Reuters) -Mastercard beat Wall Street estimates for first-quarter profit on Thursday as customers kept up spending on its card network despite the economic uncertainty sparked by a global trade war, sending its shares up 1.7% in premarket trading.

U.S. consumer spending held up in the reported quarter thanks to wage growth and a resilient labor market, even as tariff-driven turmoil casts a shadow on the economy.

"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," CEO Michael Miebach said.

The strong start was aided in part by cross-border volume growth of 15%, he said, which tracks spending on cards outside the country of their issue.

The results underscore the resilience of card networks, which are viewed as more defensive in a downturn relative to the broader payments space, given their high share of everyday spend and expense flexibility to support profit growth.

Mastercard (NYSE:MA)’s results cap off the earnings season for card companies and are closely watched by Wall Street to assess the health of U.S. consumers.

Rival Visa (NYSE:V) beat quarterly profit expectations earlier this week on resilient spending.

Growing revenue contribution from value-added services such as threat intelligence and fraud reduction also helped Mastercard diversify its business model.

Its value-added services and solutions business, which now makes up more than a third of its revenues, fetched 18% higher revenue in the quarter.

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Excluding one-time costs, Mastercard earned $3.73 per share in the first quarter, beating analysts’ expectation of $3.57 per share, according to estimates compiled by LSEG.

Revenue jumped 17% to $7.25 billion, topping an estimate of $7.12 billion.

The company now expects revenue to grow in the "low-teens" percentage range this year. It had earlier forecast growth to be in the "low double-digits" range.

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