The above graph represents the Mastercard quarterly expenses by type, starting from fiscal Q1 2002 to the recently completed quarter. Mastercard’s total operating expenses amounted to $1,798 million in Q1 2020, representing 44.8% of the company’s total revenue. The company reported a notable decline in its spending on general and administrative, advertising, marketing, and other operating activities. Mastercard general and administrative expenses declined 5.4% QoQ, from a record $1,579 million in Q4 2019 to $1,494 million in Q1 2020.
|Source||Mastercard quarterly reports & SEC Filings|
|Note||Mastercard fiscal year starts from January 1st|
Mastercard advertising and marketing expenses also declined a strong 46.9% QoQ and 19.79% YoY during the first quarter of 2020. The company spent only 3.84% of its total quarterly revenue on advertising and marketing activities, totalling $154 million in Q1 2020.
Interestingly, in Q4 2005, the global payment company spent a record $386 million on marketing and advertising activities, worldwide.
Mastercard depreciation and amortization expenses increased 23% YoY, from $117 million in Q1 2019 to $144 million in Q1 2020. However, on a quarterly basis, the company recorded nearly 1.4% decline.
As the graph shows, Mastercard also recorded $6 million in provisions for litigation settlements with U.K. merchants during the three months ended March 31, 2020. There were no litigation charges in all four quarters of 2019.
About Mastercard Inc
Mastercard Incorporated (NYSE: MA) is an American multinational financial services company, offering an array of products and services to consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations globally. The company has its headquarters in Purchase, New York, United States.
In 1966, the several bankcard associations joined together to form a company named “Interbank Card Association (ICA)”. After three years, in 1969, ICA started a new national brand “Master Charge: The Interbank Card”, which was renamed “MasterCard” in 1979.
Mastercard Inc. was incorporated as a Delaware corporation in May 2001.
Mastercard launched its IPO (initial public offering) on May 25, 2006, at a price of $39 per share. With market value of $247.1 billion as of May 2020, Mastercard stands at #334 on the Forbes 2000 list of the World’s Largest Public Companies.
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