(Bloomberg) -- Mastercard Inc. projected slower annual net revenue growth for the 2025 to 2027 period as the firm strives for a larger slice of the digital payments market.
The global payments network expects net revenue to grow annually by a percentage in the “high-end of low-double-digits” in that time frame, it said in a presentation during its investor day on Wednesday. The projection compares to the high-teens percentage rate it had predicted for 2022 to 2024.
The earlier revenue forecast — given at its last investor day in 2021 — had accounted for an expected economic recovery from the Covid-19 pandemic, Chief Financial Officer Sachin Mehra said Wednesday.
Mastercard also reiterated its goal to shift more consumers away from cash and checks and toward digital payments, and to capitalize on opportunities in the global remittances sector. The firm further committed to expanding its services businesses — which encompass customer anti-fraud solutions — to augment Mastercard’s payments offerings. That targeted addressable market in services is worth $490 billion, according to its presentation.
Shares in the company were down by about 1.1% at 12:57 p.m. in New York trading.
Mastercard also said it expects an annual operating margin percentage at a minimum of 55% for the 2025 to 2027 period, compared to a minimum 50% target for 2022 to 2024. For earnings per share, it forecast a compound annual growth rate in the mid-teens for the coming years. It had predicted the metric would land in the “low-twenties” for the 2022 to 2024 period.
Last month, Mastercard reported third-quarter profit that beat analysts’ estimates, helped by a boost in cross-border transactions as consumers kept spending. At that time, the company forecast net revenue would climb by a percentage in the low teens in the fourth quarter.
China also offers a growth opportunity for Mastercard. The firm, through a joint venture with NetsUnion Clearing Corp., is now processing domestic payments in the country, positioning Mastercard “to be the world’s most accepted payment network,” Ling Hai, the firm’s president for Asia Pacific, Europe, Middle East and Africa, said on Wednesday. Its payment network rival Visa Inc. doesn’t have such licensing in China.
(Updates with additional investor day commentary throughout, starting in third paragraph.)
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