Mastercard (MA) - September 11, 2026

Key Metrics (TTM, Last 5 Fiscal Years) Metric FY2021 FY2022 FY2023 FY2024 FY2025 FY2026* Latest TTM YoY 3-Year Revenue N/A $22.24B $25.10B $28.17B $32.79B $35.08B +16.0% CAGR +14.1% Gross Margin* N/A 100.0% 100.0% 100.0% 100.0% 100.0% +0.0 pp +0.0 pp Net Margin N/A 44.7% 44.6% 45.7% 45.6% 46.3% +1.4 pp +3.0 pp Operating Cash Flow N/A $11.20B $11.98B $14.78B $17.65B $17.44B +2.9% CAGR +14.6% Free Cash Flow N/A $10.75B $11.61B $14.31B $17.16B $16.70B +0.9% CAGR +14.4% ROE 124.7% 144.0% 167.4% 190.6% 209.9% 241.2% +31.3 pp +73.8 pp ROIC 73.2% 76.8% 85.2% 89.6% 93.6% 93.8% +0.2 pp +8.6 pp Debt-to-Asset Ratio 80.3% 83.5% 83.5% 86.4% 85.7% 90.3% +5.6 pp +4.6 pp Shares Outstanding 980M 960M 930M 910M 890M 880M -3.2% CAGR -2.4% Trend Highlights: TTM revenue up +16.0% (Q1’26 +16%, Q2’26 +14% on reported basis); Value-Added Services (VAS) up +20%, serving as the growth engine; net margin rose to 46.3%, the highest in five years; free cash flow (FCF) for the last four quarters was nearly flat (+0.9%), diverging from revenue growth—this reflects timing impacts from restructuring expenses and rebates/working capital in Q1’26, plus absence of large litigation provisions (only ~$80M in Q2’26), not signaling operational deterioration. ROE of 241% is an arithmetic amplification driven by thin equity (~$5.6B), resulting from share repurchases (CAGR -2.4%); both ROE and ROIC of 93.8% reflect a “capital-shrinking” calculation basis. YoY / Δpp figures shown above are calculated on a rolling TTM basis (vs. TTM four quarters earlier), slightly differing from simple year-on-year subtraction of annual column values.

Where should gross margin analysis begin? If gross margin declines, is it due to rising costs or falling prices?

An average figure—possibly the most misleading number Many financial analyses start by looking at overall gross margin, then report, 'This quarter’s gross margin fell by 2%,' and stop there. Overall gross margin is like a class average: when an outstanding student and a struggling one are averaged, you cannot tell who is dragging the average down—or who is lifting it up. Guan Yuan BI similarly points out that an overall average easily masks sharp gross margin declines in specific products, regions, or customer segments. Without integrating volume, cost structure, and other multidimensional data, gross margin remains an isolated figure incapable of pinpointing root causes. When gross margin declines, the correct analytical logic is not to examine a single number—but to decompose three variables. We also share a comprehensive resource package on digital finance workflows—download it freely at >>> https://http://s.fanruan.com/o5lnnhttps://http://s.fanruan.com/o5lnn, which includes financial metric templates, digital transformation case studies, and hands-on BI implementation guides—practical references for any enterprise finance transformation. Step 1: Break down the average—first identify what’s dragging performance The first step in gross margin analysis is not plugging numbers into a formula—it’s structural decomposition. Dongwu Securities’ investor education materials emphasize that companies should disclose revenue and cost breakdowns by product line, enabling analysis of products contributing the largest absolute gross profit (core value drivers today) and those with exceptionally high gross margins (potential core businesses for future growth). Start by segmenting by product line: Are all product lines experiencing declining gross margins—or is only one dragging down the aggregate? A case from Ansteel Group in H1 2026 illustrates this well: its core business gross margin turned negative at −1.83%; by product, hot-rolled sheet products stood at −3.38%, cold-rolled sheet products at −3.23%, and medium-thick plates at −0.30%—meaning each ton of steel sold incurred a loss, with gross margins varying dramatically across product lines. Next, segment by region and customer: Longbai Group’s case reveals another valuable dimension of decomposition: its titanium dioxide segment’s gross margin declined by 9.58 percentage points year-on-year. On the surface, this appeared industry-wide—but deeper analysis uncovered the key driver: a 174.61% YoY surge in concentrated sulfuric acid prices and a 35% drop in self-mined ore output, eroding its cost buffer. Had analysts relied solely on the overall gross margin, these critical insights would have remained hidden. Step 2: The three variables—the source code behind gross margin changes Analysts at Caixin observed that only three factors influence gross margin: price, cost, and product mix. Yet a seemingly trivial 1% gross margin increase could stem from a 20% price hike offsetting a 19% cost rise. Variable 1: Price change—Are we selling cheaper? If gross margin decline originates from the pricing side, it signals weakening product competitiveness or intensifying industry price wars. The power battery sector in H1 2026 exemplifies this: among eight listed firms, seven reported falling gross margins—including Zhengli New Energy (down 5.4 pp) and EVE Energy (down over 3 pp)—driven primarily by intensified competition compounded by rising input costs.

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