MA, Mastercard Inc
Mastercard is a technology company in the global payments industry.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, drawn from its own SEC filings. The lens to bring to the numbers below, not the answer.
- What it is
- Revenue is Payment network (59%) and Value-added services and solutions (41%).
- What moves the needle
- Pricing power, the surest mark of a moat. What decides it: whether it can raise prices with inflation and not lose the customer, whether the brand still earns its place on the shelf, and whether volume holds when a cheaper rival appears. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run high across the record (median 81%, above 15% in 10 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 41% of revenue reaches owners as cash, consistently. High, durable returns can mark a moat, but whether this one is real pricing power or an accounting artifact is the judgment the 10-K is for.
No model wrote a word of this. Every line is arithmetic on the company's filings, shown in full in the sections below; the judgment is yours.
Where the money comes from
read the 10-K →Revenue spreads across 2 lines, the largest Payment network at 59%.
- Payment network59%$19.5B
- Value-added services and solutions41%$13.3B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $10.8B | $12.5B | $21.8B | $25.0B | $23.6B | $29.8B | $22.2B | $25.1B | $28.2B | $32.8B | $33.9B |
| Operating marginOp. mgn | 53.5% | 53.0% | 33.4% | 38.7% | 34.2% | 33.8% | 55.2% | 55.8% | 55.3% | 57.6% | 57.9% |
| Net incomeNet inc. | $4.1B | $3.9B | $5.9B | $8.1B | $6.4B | $8.7B | $9.9B | $11.2B | $12.9B | $15.0B | $15.6B |
| EPS (diluted)EPS | $3.69 | $3.65 | $5.60 | $7.94 | $6.37 | $8.76 | $10.23 | $11.83 | $13.89 | $16.52 | $17.44 |
| Owner earningsOwner earn. | $4.4B | $5.4B | $5.9B | $7.8B | $6.9B | $9.1B | $10.8B | $11.6B | $14.3B | $17.2B | $17.8B |
| ROICROIC | 101% | 80% | 117% | 108% | 75% | 62% | 78% | 82% | 81% | 94% | 89% |
| Cash & investmentsCash+inv | $6.7B | $5.9B | $6.7B | $7.0B | $10.1B | $7.4B | $7.0B | $8.6B | $8.4B | $10.6B | $9.5B |
| Net debt / (cash)Net debt | ($1.5B) | ($509M) | ($348M) | $1.5B | $2.6B | $6.5B | $7.0B | $7.1B | $9.8B | $8.4B | $9.5B |
| Dividends / shareDiv/sh | $0.76 | $0.88 | $1.00 | $1.32 | $1.60 | $1.76 | $1.96 | $2.28 | $2.64 | $3.04 | — |
| Book value / shareBVPS | $5.14 | $5.10 | $5.15 | $5.77 | $6.35 | $7.37 | $6.49 | $7.32 | $7.00 | $8.54 | $7.52 |
Owner’s Scorecard
Will it survive?
- Can it pay its interest? 26.2×ComfortableOperating income $18.9B ÷ interest expense $722M
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- ConservativeTotal debt $19.0B ÷ operating income $18.9B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $7.3BModest net debtCash $10.6B + ST investments $1.2B − debt $19.0B
Netting $11.7B of cash and short-term investments against $19.0B of debt leaves $7.3B owed, about 0.4× a year's operating profit, versus the gross figure above. It also holds $11M in longer-dated marketable securities; counting those, it sits at $7.3B of net debt. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Not enough data
The filing data didn't include the inputs for this check.
Is it a good business?
- ExceptionalNOPAT $15.2B ÷ invested capital $16.2B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Cash machineOwner Earnings $17.2B = operating cash $17.6B − capex $489M
What an owner could take out without starving the business. That's 52% of revenue. Treating stock comp as the real expense it is (less $597M of SBC) leaves $16.6B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $17.6B ÷ net income $15.0B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks $14.5B ÷ Owner Earnings $17.2B
Of $17.2B Owner Earnings, $14.5B (84%) went back to shareholders, $2.8B dividends, $11.7B buybacks. Net of $597M stock comp, the real buyback was about $11.1B. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 0.43×HarvestingCapex $489M ÷ depreciation $1.1B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 10 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 53% (FY2016) → 58% (FY2025)
Margins widened over the record, pricing power intact or improving.
- Reinvestment, incremental ROIC 80%
Every extra dollar the company reinvested earned a high return, it is still compounding, not coasting on an old moat.
- Owner earnings growth +14%/yr
Free cash to owners grew about 14% a year over the record.
- Worst year 2018 · 33.4% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −2.1%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $97.0B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a mature cash machine, most of what it earns goes straight back to owners.
- Reinvested$3.8B · 4%
- Dividends$16.8B · 17%
- Buybacks$69.5B · 72%
- Retained (debt / cash)$6.9B · 7%
It reinvested $3.8B (4%) back into the business and returned $86.3B (89%) to owners, $16.8B in dividends, $69.5B in buybacks. Total debt rose $13.8B across the span.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- Stock-based compensation$597M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 3% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $32.8B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.03×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $19.0B vs $796M WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +182%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $16.52/share and book value $8.54/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Mastercard Inc has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $17.8B on 893M diluted shares; net debt $9.5B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationMD&A
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“In 2025, the net revenue from these customers was approximately $6.9 billion, or 21%, of total net revenue.”
From the recordRevenue exposed (TTM)$33.9B - Pricing power & competitionRisk Factors
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Such regulation may also provide these processors with the opportunity to commoditize the data that are included in the transactions they are servicing.”
From the recordOperating margin57.9% (TTM), near a 10-yr high - Concentrated dependenceRisk Factors
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“In addition, a significant portion of our revenue is concentrated among our five largest customers.”
From the recordOwner-earnings margin at stake (TTM)52% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“In conjunction with the Commercial Paper Program, we have a committed unsecured $8 billion revolving credit facility (the "Credit Facility") that was amended and extended in 2025 and now expires in November 2030.”
From the recordBalance sheet (TTM)$7.3B modest net debt · interest covered 26.2× - Litigation & contingenciesMD&A
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“Special Items Litigation provisions During 2025, we recorded pre-tax charges of $504 million ($357 million after tax, or $0.39 per diluted share), primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation, a legal provision a…”
A judgment, not a number, weigh it against the filing yourself. - DilutionRisk Factors
Whether your slice quietly shrinks. New shares fund the company at the existing owner's expense.
“Additionally, to the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves available to us for other uses, and to the extent the purchase price is paid with our stock, it could be dilutive to our stockholders.”
From the recordDiluted share count−2.1%/yr (FY2016→TTM) - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“Net cash used in financing activities increased $3.3 billion in 2025 versus the prior year, primarily due to lower proceeds from debt and higher cash paid for repurchases of our Class A common stock and dividends, partially offset by higher repayments of debt in the prior year.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Net cash used in investing activities decreased $2.0 billion in 2025 versus the prior year, primarily due to less cash paid for business acquisitions and lower purchases of investment securities, partially offset by lower proceeds from maturities and sales of investment securities.”
- “General and Administrative General and administrative expenses increased 11%, on both an as-reported and currency-neutral basis, in 2025 versus the prior year, which included a 4 percentage point increase from Acquisitions and a 2 percentage point decrease from Special Items.”
- “Our estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable.”
- “The loss of any of these customers or their significant card programs could adversely impact our revenue.”
- “Any changes in enacted tax laws, rules, regulatory or judicial interpretations or guidance; any adverse outcome in connection with tax audits in any jurisdiction; or any changes in the pronouncements relating to accounting for income taxes could materially and adversely impact our effective income t…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Business services
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| UBERUber Technologies, Inc. | $52.0B | — | 10.7% | 18% | 19% |
| VVisa Inc. | $40.0B | — | 60.0% | 43% | 54% |
| PYPLPaypal Holdings, Inc. | $33.2B | — | 18.3% | 23% | 17% |
| MAMastercard Inc | $32.8B | — | 57.6% | 94% | 52% |
| DASHDoordash, Inc. | $13.7B | — | 5.3% | 13% | 16% |
| EBAYEbay Inc. | $11.1B | 71% | 20.5% | 19% | 13% |
| GPNGlobal Payments Inc. | $7.7B | 73% | 22.8% | 4% | 26% |
| MSCIMsci Inc. | $3.1B | 91% | 54.7% | 45% | 49% |