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SEC filingMastercard delivered robust 16% revenue growth in Q1 2026, driven by strong payment network and value-added services, with operating margin expanding 120 bps.
Mastercard's first quarter of 2026 showed strong financial performance. Net revenue increased 16% to $8.40 billion from $7.25 billion in the prior-year quarter, driven by 12% growth in payment network revenue and 22% growth in value-added services and solutions. The revenue increase was broad-based, with domestic and cross-border dollar volumes and switched transactions all contributing. Operating expenses rose 13% to $3.49 billion, but the operating margin expanded 120 basis points to 58.4%, benefiting from operating leverage and a $151 million decrease in litigation provisions (which were $151 million in Q1 2025 and zero in Q1 2026). This was partially offset by a $202 million restructuring charge recorded in Q1 2026. Net income increased 18% to $3.88 billion, and diluted earnings per share rose 21% to $4.35, aided by a 2% reduction in diluted shares outstanding due to share repurchases.
As of March 31, 2026, total assets stood at $52.45 billion, down from $54.16 billion at December 31, 2025. Cash and cash equivalents decreased to $7.91 billion from $10.57 billion, primarily due to $4.0 billion in share repurchases and $777 million in dividends. Current liabilities increased slightly to $22.93 billion from $22.76 billion, while long-term debt decreased to $17.21 billion from $18.25 billion, reflecting the reclassification of $750 million in notes due November 2026 to short-term debt. The company had no borrowings under its commercial paper program or credit facility at quarter end, and maintained a strong liquidity position with an $8.0 billion unused line of credit.
Operating cash flow for Q1 2026 was $2.99 billion, up 21% from $2.38 billion in Q1 2025, driven by higher net income and favorable working capital changes. Capital expenditures (including capitalized software) totaled $335 million, resulting in free cash flow (operating cash flow less capex) of $2.66 billion. The company returned $4.8 billion to shareholders through $4.0 billion in share repurchases and $777 million in dividends. Financing cash flow was negative $5.0 billion, reflecting the heavy buyback activity.
Management attributed revenue growth to strong execution across payment network and value-added services. The company highlighted the continued investment in strategic initiatives, including a $202 million restructuring charge aimed at enabling reinvestment for long-term growth. Foreign exchange currency-neutral results were also provided, with net revenue up 12% on a currency-neutral basis. Regarding guidance, no specific forward-looking revenue or earnings forecasts were provided, but management emphasized the pending acquisition of BVNK Holdings, a stablecoin infrastructure provider, expected to close before the end of 2026, which will expand digital asset capabilities.