Mastercard’s full-year 2020 results,
versus the year-ago period:
• Net revenue decreased 9%, or 8% on a currency-neutral basis, which reflects the impacts of COVID-19 and includes a 1 percentage point benefit from acquisitions. Gross dollar volume of $6.3 trillion was flat on a local currency basis. The net revenue decline was driven by the impact of the following factors:
◦ Cross-border volume decline of 29% on a local currency basis.
◦ Rebates and incentives growth of 3%, or 4% on a currency-neutral basis, primarily due to new and renewed deals.
◦ These decreases to net revenue were partially offset by:
▪ Switched transactions growth of 3%.
▪ Other revenues growth of 14%, or 15% on a currency-neutral basis. This includes a 3 percentage point increase due to acquisitions. The remaining growth was driven primarily by the company’s Cyber & Intelligence and Data & Services solutions.
Total operating expenses were flat. Excluding the impact of Full-Year Special Items, adjusted operating expenses decreased 1%, on both an as adjusted and a currency-neutral basis. This decrease includes 4 percentage points of growth from acquisitions. Excluding acquisitions, expenses decreased 5% primarily related to lower advertising and marketing, travel and professional fee spend, partially offset by higher personnel costs to support the company’s continued investment in its strategic initiatives.
• Other income (expense) was unfavorable $388 million versus the year-ago period, in part due to lower net unrealized gains recorded on equity investments in the current period versus the prior period.
Excluding this activity, adjusted other income (expense) was unfavorable by $251 million versus the year-ago period, primarily due to increased interest expense related to recent debt issuances and lower investment income.
• The effective tax rate for 2020 was 17.4%, versus 16.6% in 2019. The adjusted effective tax rate for 2020 was 17.2%, versus 17.0% in 2019, primarily due to a discrete tax benefit related to a favorable court ruling in 2019.
