Mastercard (MA) 31 Jul 242024 Q2 Earnings call transcript

Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard Inc. Q2 2024 Earnings Conference Call. [Operator Instructions]

Mr. Investor may of your Head Corr, Relations, begin you conference. Devin

me and Julianne. quarter for With our Miebach, Chief Good Sachin you, Officer; thank Chief XXXX are Executive our morning, call. Financial second Thank Mehra, our everyone, you and Michael for joining earnings Officer. today us

then Sachin, for operator queue session. Q&A for announce from that queue opportunity open your only will the comments Following the to Michael questions. the It and will get the is into

release, earnings that our You performance in data Investor deck access can of slide the supplemental mastercard.com. accompany the and call this our Relations section website,

Additionally, the was with this the SEC release morning. furnished earlier

deck Our reported currency-neutral comments otherwise release noted. results will regarding slide non-GAAP financial the basis reconciliations to measures be include on amounts. of GAAP unless our a Both non-GAAP the today and

about differ detail Mastercard's set remind to forward-looking that I'd summarized posted as in our Finally, performance. statements. XX at future in of the performance forth future our A our Actual from this be for the on statements are earnings release, will like call our replay in website of could release and will Information today's earnings affect days. materially include regarding these call forward-looking end that factors everyone SEC more performance recent filings. could

that, will Officer, the now Miebach. call turn Michael over With I Executive to our Chief

The quarter, across delivered we everyone. this very powered headline Good of aspects all momentum morning, our by results Thank broad-based you, business. Devin. strong

basis. monitor labor strong spending by of on by currency positives Strength healthy And XX% year-over-year year Second results underpinned basis. on spending, growth. value-added consumer net currency-neutral The in adjusted note. and to mixed, negatives. continues remains local income including revenue a currency-neutral market solutions These and quarter net supported a to up XX% net and the revenues solid ago A a and cross-border versus to XX% we a up continue were basis. macroeconomic few a wage on and environment grew growth XX% be were services year-over-year volume consumer non-GAAP

While off of market creation. is this some labor levels strong there signs of job are moderating, growth very

inflation categories. and carded in are for services. Interest interest broader levels to economic seen still support We've across non-carded have many elevated, ease and varying banks but rates rates and As indicators degrees Price goods but also elevated focus. remain inflation started also many central rate reductions. remain to and cool

remain fuel our as called we tailwinds With While headwinds services. remain our positive which to payment outlook. backdrop, and on flows we strategic algorithm our priorities, a or growth economic executing and on focused that growth new growth [indiscernible] balance, about remain payments,

further You recently to announced our to that our designed to changes in and deliver included operating these opportunities. were changes the we long-term of services realignment and payments unlock to may These leverage priorities. increase support algorithm. capacity both regional continue to on also organizational They business This growth invest long and operations remember positive growth focus accelerate term. helps over us the

high into redeploy For levels. example, growth we markets to with resources plan cash

and verticals commercial. and apply will in shift we across to more We will us digital even to and the consumer new help invest to opening both acceptance technology realize continue of

services. particularly value-added and data expand further fraud also our our and as into analytics, services, products and will as AI We such enhance cybersecurity embed in we

to well us result onetime realignment, we As long-term a third quarter. of restructuring charge a for organizational incur in expect the this growth, the which positions

geographies ecosystem. expanding we're by deals, the growth further on on moving driving opportunity in specific and In shift Now an vast secular digitizing tapping retaining payments, and to algorithm. and some we're payments winning of growth into elements by update new our the

first all-digital ability portfolios our into chose our Varo offers integrate start credit Mastercard partnered Bank and This in debit first credit convert receive were will Attune with World our to Varo national to that differentiated merchant-funded to and with announce Let's to to bank their platform the insights, a agreement due with States. I'm happy momentum. the program our MasterCard. Fargo their continued charter deal launch United to Elite bank. extended technology data the Wells Mastercard. and seamlessly our proprietary is stack. enterprise consumer the They We

with will meaningful Relevate market want share. deals in to also partners, and our increase ] aggregate, [ U.S. Network DAS renew including partnerships Uro, prepaid solutions. We quarter WCOG drive this a key Block, H&R In prepaid U.S. these

across growth we Mastercard for across issues extended cards to Canada, commercial And prepaid Italy, additional debit collaboration consumer expanded decade. drive partnership PostePay next In long-standing and our who prepaid. has National and in Canada the credit, of already of Bank the with our millions

dive verticals our is, few into and Travel also component. course, and key natural car of growth focus. specific Travel the has deep and Let's It a cross-border virtual is fit with a geographies. our technology potential this consulting meaningful new strong them virtual issuing We signed deal partnerships and payments travel to enable their loyalty digital to solution We online quarter. their customers. global Checkout.com agency executed several deploy provider capabilities. travel marketing, with card to a a

of [indiscernible] deals sure the cash. example approximately vast continent great I&M External in earlier in made we that largest executed on with The a announced opportunity and with Africa that build are launch Dasheb it with this Expedia Africa. secular a in and deal also Africa. new X co-brand agreement Ethiopian wasn't estimate I Wells We these markets. in a [indiscernible] mentioned of to range in that is with last unique This benefits. cards initiated new Fargo airline Airlines, travel XX% multiyear X And are and Bank transactions I'm co-brand of emerging a lost the co-brand a sources we deal year.

doing partnerships, the and our committed to of the are We new up ranking acceptance digital expanding regions, and we're transformation investments, rapidly developing our so footprint. by

world's is accounts. money mobile example, of largest Africa For adopter the

cash a us accelerate position Our partnerships and put Egypt network large like Vodafone to MTN, in with great operators inclusion mobile telcos others and Airtel, and conversion.

in we across issue with over we're with the will region partner work our solution with the consumers country, partnerships the locations BlueSoft businesses last and Together, years. and acceptance cards. Nigeria fintechs both more the several share On to the markets. markets recently the foundation and African move X us I&M in front, bank new and a to in Financial, to Group. the payments receive Bank Commercial Ethiopia, for Also, number Africa deals Mastercard In of of money XXX Kenya. enabling international than will increase who in These We Bank are largest movement signed send countries. over with tripled Ghana, the MasterCard enable Access across acceptance in we've Bank capabilities cross-border

expanding that opportunity we emerging trend globe. we opportunities America secular markets Africa, to not Fully We're the this Debit economy innovate We're experience around acceptance is limited Pacific. Latin at of to technology the ongoing Maestro Now scale, and our continue the to just that capitalizing our and driving tap-on-phone transit, capabilities. enhancing checkout the on Mastercard. in are to in see conversion Asia requires that. contactless digital areas support like Think secular scaling we're and doing and about we

a all we That's be It driving why online manual security. must we leaning new one-click dig checkout this foundational that button. into simple effort, area payments on and on announced work Let's components entry it one, We and XXXX There channels. for one-click of out payments. devices will to and must all shopping. phase are a e-commerce by are anchored all simplicity in in of X Europe card favor into

replaces decrease rates and Tokenization improve. a tokenization. When approval First, deployed, payment credentials secure digitally token. with fraud rates

broadly has adopted technology So been decade around ago, launching the a world. the

XX% In a fact, in versus surpassed up the year transactions XXXX, ago. we billion half $XX of tokenized first

to easy e-mail online by checkout It Second the as technology enter remembering I checkout your Click guest address. just Click also is need Pay makes as to manually Pay. secure mentioned. simplifies to eliminating becomes Guest credentials. more payment using checkout token the

to day drive on with simple that need secure online doubled working fingerprint more passwords XXXX. phone. opening are pass powerful are consumers. Pay promise you first authenticate use Click to a the facial every And text checkout payment our in these adoption. eliminate online, up consumers transactions a and combined, purchases cold. bank technologies to year-over-year one-click passes. us or enabling your our for for than allow Passkeys using and of for to onetime merchants half We They the experience third, deliver features of when or When partners

also in-store checkout. We to continue enhance

see biometric working ] can glance. with with scaling we our we're we participate regions. working are and payee Mastercard In once program Latin migrated. Fintech consumers on cross-border migrate we that a cards online to with a Shifting critical so allow on pay to primarily Mastercard lift checkout the of to element States. supermarkets spend Maestro Europe, wave. America, to a partnering is Debit For ability also We're to strategy United pace shoppers Mastercard. they Ingenico to outside example, due are our both And in as debit capture [ at new the in is a to with Polish Xx are This that spend cards pay to Debit simple

are MasterCard XXXX, XXXX. PXP to migrated making examples the XX schemes. over we or differentiate since experience million which we of of half almost like first payment to investments XXX converted cards, The methods other us million payment the versus brings These cards are local innovations

payments. on We accounts in will commercial, the Today, targeted focus to opportunity continue capture payment with flows. secular new large also I payable starting

from operating of strength. are position We a

with deployed XX issuers Our market-leading have card been worldwide. over virtual capabilities

we completed X card integration customer the in and are invoice procure-to-pay of technology virtual the Cloud Oracle first into the for of providers, ERP Additionally, X top global integrating into payments our [indiscernible]. HSBC our solution leading corporate technology commenced

virtual signed receivables of using we platform are ], [ Mastercard customers side, acquirers supplier accepting This streamline the Elavon process AI-powered cards. to the On whose includes several onto our managers.

verticals. increasing business distribution world strategy and expand of our point [ worldwide. BXB this now Fargo corporate the yielding offering. through card SAP ] small T&E credit of signing awarded ]. value also products We ad new finally, to expense and business In commercial card automatically Concur their to is we've our first program extended the Money deals data to partnership delivered our virtual with continue growing distribution brex sale, we're joint [ Wells complete. which the penetrate In SCORE small on partnership groups Large And our the Virgin is ] against Europe, with results. migration continue our we're insurer card U.S., portfolio, our cards, to with On integrates executing into our based Mastercard portfolio of new [ Concur, commercial card

inventory exclusive the and financial retailers. distributor education These other purchase the acceptance enabler YalloTech to provide small will partnership and [ This quarter, business distribution America, and cards Migo car small partnership an signed Mastercard region, CBC, businesses with This million use their items. in with can X ] payments. the fintech we Latin almost largest Pepsi now to

care In with payments space, providers. the health partnership now Separately, an health the make medical are we Tourism consumers working amongst cards the in U.K. exclusive utilize Square Association. virtual They will cards and Medical accept smaller providers care with cross-border we signed acceptance card from broaden to to to

new new I'm year-over-year the A Services currency Payments versa. with fuel launching strong winning I of helped part services ways And a or penetration of services. growth. potential new growth vice excited future our is support drove demand and capabilities payments across this net distributing turning. deepening our flywheel revenue in mentioned. strong customers, played and on to XX% quarter examples. solutions and and it's about an few and in just momentum turning value-add coupled neutral our transaction drivers whether important deals existing Now the types. services the in the our powerful services second many customer That, services basis,

thereby objectives. business help supporting First, our improve customers' our portfolio core services performance, MasterCard to issuer

business strategy, For Revolut and develop we're SEB with growth needs, building capabilities together including And LATAM their marketing customer And diversify co-brand Baltics in are McDonald's the Italy. example, execute ] the [ working across and launching also our We're our is Paramount Brazil media across with in helping portfolio deploying ] Ireland learn Mastercard. and in campaigns. us measurement address test and U.K., of product capture our their introductions. vary and services a marketing core new Taiwan loyalty Airlines campaigns to [ new non-FIs, to and and develop strategy working using to their optimize Customers is as with opportunities. set innovative to business

financial financial in new other distribute efficient our banks Salesforce capabilities into We're institutions their will partnering handle ways, prevent risk its KPMG The resolution solution that cyber hundreds our and help to governments This risk And integrated of to effectively. to with more Norway enables has chargebacks suppliers. of Norwegian local partnered dispute cloud. has more disputes posture services the services and their evaluate distribute government recount capabilities. our and and

to Turning banking. open

PayPal an use use progress in our scaling Mastercard's Klarna account banking make open use to and the linking is account cases. new this strong opening using continue now linking, for balance in We example. support. as and case I'll U.S. U.S. and these the purpose. in opening history they the will hundreds will account check distribute wallet capabilities for to their leverage streamline issuers Jack transaction for account of Henry process

substantial that, services. So deals, another strong for wrap winning and revenue up. summary, continue We're and and opportunity, strong we're it I'll In secular see we earnings driving we delivered penetrating by quarter growth. our with the of retaining to growth demand

you. capitalize business the focused differentiated significant our on of opportunity model capabilities, diversified Now Sachin, well us position to to ahead us. and over strategy

Michael. Thanks,

as geographic in and operating including tax currency-neutral on a current minimal respectively, well to XXXX, income our excluding impact XX%, equity tax value-added gains expense of investments. and rate earnings. Net growth Operating where year and acquisitions. EPS our income items QX financial compared of up a minimal and for and which And well XX%, lower up expenses XX%, losses change in to the X, in special second strong Net operating was the reflecting quarter continued both from our due XX% a prior discrete increased the a from the Page reflecting as was growth applicable, primarily on impact including the increased payment in a sizable basis as services to revenue and XX%, our network acquisitions. mix the the Turning as performance shows quarter impact solutions. income

contribution a EPS was $X.XX, repurchases. which includes $X.XX from share

worth stock through billion During additional the XX, $XXX XXXX. $X.X an million quarter, repurchased of and we July

was currency X% X%. key year-over-year. aided non-travel quarter let's conversion debit debit of increased growth rates U.S., growth credit growth speak continued our second and where on by In of growth Worldwide of travel X, previously strong of win or cross-border for volume the increased GDV, of GDV the growth the U.S., volume U.S. the XX% volume, So of local gross credit XX% globally quarter, related Debit the Outside Overall, in and growth to with by X% turn to by basis. in reflecting spending. announced for with dollar the some X% XX% debit of I'll Page and increased XX%. drivers a of the cross-border a both growth increased

card-not-present to was by QX, growth approximately X. transactions. XX% in-person represents contactless contactless year-over-year Switched of Turning remain as growth now Page present in transactions XX% an grew rates Card in in part both switched card all purchase aided increase present and penetration strong.

was there growth Globally, Maestro-branded In addition, Mastercard issued. and card X.X X%. billion are cards are

includes primarily for volume in incentives, planned timing services our consulting, which growth X Value-added underlying lower due Turning in primarily for net solutions. into net XX%, net increased analytics to were also deal second our and the scaling to and the domestic and Slide a our our Payment basis. solutions discussed revenue growth anticipated, authentication revenue and services and It activity. driven the and marketing data increased identity of by Strong rates our X%, transaction quarter revenue growth for a drivers and of on security currency-neutral and fraud primarily cross-border than growth. driven look and network by rebates demand

metrics to growth currency-neutral let's to described to X otherwise unless Now noted. key network. a Again, turn related Page are discuss on rates all basis payment the

driven Transaction while assessments quickly grew difference and switch worldwide is processing increased to XX%, cross-border XX%, assessments were transactions Cross-border quarter. is increased mix GDV this XX%. due primarily X primarily were the and pricing. due volumes metric. up X%, primarily while million The Domestic X at Looking ppt assessments [ XX%, to mix key up grew X%, mix. $XXX were difference assessments while pricing. ppt network ] by each Other

fees implementation period. other period and As and to a licensing, relate primarily these franchise fluctuate from may reminder, assessments to

Moving on Page X. to

that strategic the operating currency-neutral year. QX primarily support in minimal growth XX%, timing see non-GAAP from a as spending adjusted total by a our within was impact basis, The expenses which special on increase can to operating marketing increased and expenses offset of due discussed excluding includes to acquisitions. in You increased advertising execution was the as as our XXXX partially initiatives the well on an earnings call. continued taxes spend of This indirect items,

Turning to X. Page

through of Let the trends first July. quarter me metric the second comment weeks and on then the operating X in

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and the I addition, the year end switch timing the Easter QX timing the the of our as sequentially stable which of metrics by U.S. were leap U.S. debit April previously QX in in Easter, from In the year, occurred and globe. the switch in XXXX. to our the adjusting compared After and benefit across April of at when excluding portfolio for were impacted metrics in in generally discussed, QX this

at July, versus stable of QX. first weeks Looking trends the generally remained X

Turning I to our wanted year. for to XX. share the Page of thoughts remainder the

As all focused monitoring, of are our delivered tailwinds number we the evidenced strategy. headwinds aspects results that by a we fundamentals economic as remain on of Business are executing this business. said, strong Michael remain and our quarter on across and we there

to value-added position the Our of the services forms diversified spending, the continued and about our for well underpinned outlook. solutions growth demand and Overall, us digital positive payment continues business strong consumer to we remain secular model ahead. by shift for healthy opportunities

exchange basis, low a a double-digit a minimal forecasted this XXXX. expense we the a to acquisitions. a is the From range ppt end foreign again, special to excluding for expect at to growth on expected on be net while basis, rate double-digit turning impact Now operating ago, revenue expect are QX low have Year-over-year headwind currency-neutral to items. growth currency-neutral from a Acquisitions of an quarter. high standpoint, X excluding QX versus X the growth we to expense year operating at range and acquisitions be to

as to expect a of while expect spend the to higher half by cadence OpEx ppt charge activities. this to We Separately, reorganization, and the X be tailwind as in Acquisitions to our growth Michael driven first This restructuring to in a our excluded forecasted the onetime and record sponsorship advertising we will primarily have marketing related metrics. impact the of as year of foreign in recorded of exchange. to minimal X quarter, recent $XXX QX a are QX compared for from growth we part item from our expect mentioned, a approximately special million. non-GAAP

in capacity algorithm. We expect these continue free invest actions our will as our execute to further priorities we on to growth up strategic

expect will also operating term. We contribute the to they long over positive delivering leverage

revenue net headwind As end the year. foreign it forecasted Acquisitions full double-digit relates the to expect impact be minimal basis, a year range is a approximately on a exchange to expected grow at ppt for low of year, the to have are a the currency-neutral now high for we acquisitions. and of to excluding X

this This In approximately equity excludes in terms are Acquisitions On $XXX expenses, and excluding currency-neutral year from on our million. mind. for basis, full the and expenses, minimal on the the to levels at metrics. items we our are and are income and impact end excluded exchange assumes prevailing grow a debt QX, special keep an the growth double-digit a which and and losses interest rates continue expense have non-GAAP low expectations investments, items. in foreign low expect to acquisitions gains to Other other of for of range forecasted our of operating to a year.

[ York geographic you at ] QX Investor you of point. XX% forward November of we a basis, Finally, are to in XX% on XX.X% planning with our XX. look to for know tax to mix We rate between host last let we future on New I current non-GAAP wanted that that a and Day business. discussing on plans XX% expect our year time. all based full to and the One an

back call with that, And Devin. will over I to turn the

open questions you, call Julianne, for Thank the Sachin. please now.

[Operator Instructions]

Rawat question Harshita first comes Bernstein. Our from from

can think litigation, the forward the outcomes? should Michael, range merchant we from about you How talk rejection U.S. about here? the settlement ball and of

Right. Thanks, Harshita.

about You're the not know secular same. I the opportunity. asking

settlement. merchant the So

And So would ruling parties. thing for I court's has disagree describe to been we respectfully the over This with years the first as the disappointed where is settlement. we're it I say many many reject would negotiated this landed now. across has

I produced consumers, would they think lot across merchants with a all intentions, benefits of and for best parties. have for and

now this So not happening. is

lean obviously is It's this solution will efforts all our to driving to to scenarios I parties. ensure parties engage how before are We in take our outcomes But that and to found intention and banks done here predictability see previous speculate and security before. we provide We've and at this us. it point. to is this think we merchants more to ready in what's our goes a can trial, difficult

across of own a a and there's number here. So be decisions there of board, the take and in obviously this. best find we the But dialogue to will outcome co-defendants has this, everybody obviously, their

next comes from from Williams Our Jefferies. question Trevor

I and ask on Yes, to growth. incentives wanted rebates

in relative of XQ. to for the expectations you over you're quarters. R&I came you just some a couple for what of the unpack been any upside growth that expecting have expecting help think for could next there and Sachin, bit better guys if little than then I

Trevor. Thanks, Sure.

right. you're So

our I take the for a level, in kind want quarter. in my active come just than did just of lower it in we're and prepared to As of everybody, expectations very remarks, I mentioned slightly our rebates the kind markets. second remind incentives to up

potential customers. pipeline we our a be We what and what with have view who with new And on of activities looking are exist constantly is. at existing customers then opportunities could

second expect that in still still something of more then say, And materializing as remains progresses. the or, were pipeline. will vast the and occur It's the it again, network and this which quarter said, higher specifically, as we second expect in have. And percentage lower And it's would of is majority incentives better our to is It I it's year more just based relates as those of in rich activity timing deal it QX. had the -- a QX, the was deal we than we very exactly of issue rebates essentially a will the what So pipeline rebates a we incentives be anything driven in by assessments quarter. that on than of payment nature not in that I what our some else.

It transactional in deals find to and all positively relevant that and to we up also our meet focus. revenue add back our the comes services Mastercard the our that the and product the yield for has be financial it keep combination net to the to to have we in relevant their end, fight We point. to that In that eyes criteria. in the hand, want that strategically be in payments In between relevant we customers. end, they develops we want want a in We the floor. be consumers of

comes Dan Perlin question next from Our from RBC.

you Can we it second about create just know growth. organization the capacity bit? incremental little on spend realignment I and to drive the of a talk a

going think analytics. how aperture then about new constituencies of about the that we as how in I talk have And open about we verticals of that forward? specifically, new more expansion and think question data think of I you the driving kind up does should that is as the maybe network

Dan. Right,

not said strategy. strategy. idea our So earlier, reposition accelerate is the here articulated We've idea is growth. our as to The I to

cash across hear on in services the portfolio. more see in You'll the November investor we solutions, stated core high that new detail I play markets meeting and how that our more of out in purposefully and flows point the community with penetration. payment

out I tremendous context other the markets Africa, in emerging world, in but of So as here there's more is opportunity there's here. laid the around a

we also recipe in to markets. isn't the markets want to It's the in as same secular our that strengthen clear developed participate opportunity emerging front line. So the

the of as we're in side, on forth. It's So as pretty far clear focus the areas so concerned. services and investing are that product

do be moving their to of partners of and our a set they strong the et partners faster we secular want artificial for also and guys sure do solutions they making hand customers bad do help better corporate leveraging and have trend better sense the decisions, solutions a kept faster, very BXB all data that underlying end in that to set continue strong That's of move personalized weightage be could secular now. make And kept that? fine-tuning technology solutions this specific then got We that make We've our we the X guided cetera, and of of not to And by data trends, how their changing, side, that but AI. our their That's cybersecurity assistance, decisions. are fine-tune any one make for here. a suggestions they safe. the really by is itself, of our saying intelligence side and to cetera. to and has consumers, We how more higher have We part, enterprise et security on with to because similar tools that at years.

Intelligence that's card Pro, predicting might that next an So Decision around last frauded. artificial be intelligence, what the is gave leveraging quarter I example

kind customers happens, in our payments it's significant of underlying it terms Before obviously actually to our their link to those and lift business, business. helping provide to of giving payments a overall preventing our solutions consumers mind peace close fraud and of

that going aspects strategy, other it's all portfolio a of dial of that, So aspects as and result of there same of very our this but we're effort. that the really to largely down specific we're are on focusing --

comes question next from Our David Togut from ISI. Evercore

consumer. opportunity, and growth there digitization continues. highly Europe on cash for Would out also and thoughts Europe. by geo continues outlook differentiated look in also your largest appreciate the forward travel then to And cross-border GDV of be on your the

Right.

as your you Europe there. want It's framed and We've So well story presence for have on That's And seen I what in we thing investing -- locally feel how growth more European with start. us a and strong as as very focusing share let engage really in Continental would first Europe. with a that's European That's the Europe, me growth U.K. question. there, anchor governments you I say. Europe. tremendous well institutions, which better to down been national as the

to would changing When were and the Europe pressure a the lagging, times of of increased COVID, further, back to has it I digitize there in digitization large behaviors to consumers argue happened. the have come front, was set economies -- was it I on that

So opportunity obviously secular shows the Europe But and we of to our up we've discussed. seen back numbers. in just point catch

the digits and economies double cash the at we we go go in continue in look after that you can If we're in and higher Germany, to after. there's seeing Italy, significant will that

continue opportunity a in I itself digitized why But something business that. markets is The of of and a is the to to highly come secular there. the supporting world. in that There's have the check of a set models fintechs are where partnerships. true models Europe you really geographies up, a good in a growth today are around whole what fintech so those is the example we And emerging we're digitized isn't the in is that position one highly leaders other and market Nordics those coming happening. opportunity there from also new that world there, business cash which that tremendous point So are it's to expect about

we So and I'm line. Bottom excited about the outlook, Europe there. to invest continue

globally, out Look, from I thoughts around a And standpoint. would say on Europe, of mean, your of a we're I in cross-border positioned question cross-border well couple around and there. David,

standpoint. The and cross-border mix what then see win leverage it Michael high are cross-border, our in our just of loyalty [ world. it's to ] order the in been for idea create portfolios, some actually of ourselves else Europe, to services, be been to cross-border which as anywhere a flow, relates is drive And there's that actually opportunities Europe metrics. we've winning said, participate to from and lowered as others or can there, the You our in in a assets are to portfolios back whether

up travel Europe exchange from in right? you into of Last to terms make helps point I'll Strong foreign is part U.S. the see to as in the of certainly Europe inbound sensitivity show a that lot rates, because dollar tend process. actually more

only So globally opportunity, cross-border good the out of about but again, we Europe, for in not feel company. the

point financial Sachin just last the the to -- put back one it, on on R&I add around that And question. based Right. to frame

from So market in share we perspective. we well are in Europe, positioned the really feel a

financial discipline for continue top. this in and as of we rises partnerships Europe look deals to really So aspect to the

comes question Next Wolfe from Peller Darrin Research. from

and It's volume U.S. July good side. see into the to stability the

ability of So or us us for anything more on from help Michael, driving much there's guys just more if a And you could if little you might importantly, understanding the then if really, how a of just maybe -- little bit the to CrowdStrike what How these us guess, if see you be I remind more you competitive also, pricing understand portfolios, the could weather? of win dynamics, cadence just is it what factors are? [ there's ], any much it mass ahead. just help

Yes. Why of don't question, first part I that Darrin. the take

of of weeks And really, to for look, seen was I across X we've it's I mention. mean, terms the [ or events little of the But over of of what our in weather mean the I July, the that like an CrowdStrike ] the that weeks' Page context And to can board. drivers impact. I see of trends muted piece the stability weather. question I in your presentation. kind got X is worth an mean, general of X as impact with there. data there would and the a has you we've bit That's now reality first on from whether actually terms In said,

And By there catch-up be so particular higher and might a they factor takes might happen, here. which we you week, it you what reflective about at follow. seeing and we tend see it, lower place then of large, as look of come is that's the to or what metrics from feel good look these if a a consumer on things standpoint, the and spending kind right reality we're

U.S. market [indiscernible] in the as just part about, same question, the we then And remains and Right. your incredibly Europe the competitive. second of talked since

of currently that such we're I competition haven't seen seeing. level think and we elevated payments

lot looking a in opportunities forth. the There's network at see so movements You market. of and banks

we help we here your our of better to And can true what that What offerings. matters solutions on. and that it's broaden is to for that way. their customers our part So there's question But lot a going our that matters really, a business service payment continue also is run comes in us, here.

data do also that all So solutions is solutions trying there of payments, to helping for. are customers a fact that our cards looking and to what are matter. The they insights, set cybersecurity certainly but answer the isn't multi-rail best

that. of all have We

for but in in not really clear. trying product sell come sales us working puts position. solutions to pretty but force. We're that differentiated a to us, through our it's That's with So

with changes if to be competitive. quite have That of vis-a-vis conversation matters. the the outcome payments always We But that significantly. top line have the dialogue around can customer your a financially cost you

So talk that's when to what in. really and interested customer I side, the they're CEOs

that's price we lot that. that we bring, So working. value That's of a for and

for that. So we continue to price

changes us heard quarter. pricing You've the last in mention

great do Tokenization We've we we scale example. it So we up. is that tokenization needed opportunity. a and wherever the in see to invested

opportunity an of and fraud forth whole of approval feel we we have top a for that price in build of for on the we Now better a terms better drive token rates, they because that lower basic and to set we our for so price can customers. outcome should services

we're to and market, think So a positioned edge. continue I in competitive keep to going to that very we're well try

Koning Our next Dave from comes Baird. question from

very divergence nice volumes. the revenues on positive constant a and had currency question currency you've my line, guess cross-border constant I between And

of sometimes forward? close think continue to in And X%. even does a that quarters about think was prior quarter Why that it positive it's And row, to been how I neutral, was to nicely This stay a negative. going divergence? little going that positive. Is XX that should for be nice years, positive? we pretty In

Yes, David.

mean, like about. talking actually is bit positive I pricing you're causing mix it's a of the divergence the it's been look, what's So is I that driven little quarter. second in reality The really mix piece that said, by favorable right, been and

cross-border are our volumes the you aware, As you metrics are this. -- and on show we

cross-border cross-border yielding, we high other have us. yielding Intra-Europe have lower cross-border. We intra-Europe is then other for and is

intra-Europe growing And you than we see at had are pace had growth. and divergence. phenomenon positive clip driver remind if a that take you, you than think as cross-border which growing the I'll had intra-Europe, a the volumes faster actually you the this, underlying other actually you place. cross-border than reverse other to assessment had during so COVID, faster happening, is We the actual slower tend cross-border is reverse at growing about

mean a of the what there. to the which around second mix pricing really deliver, is factor quarter. we then, which that's Michael there's point So we we do another course, back And making by was the value in contributing

from Sanjay next Sakhrani comes Our KBW. from question

and gain I Sachin, you about what's quarter talk in the on could was wondering, benefits share the just horizon. maybe the

you mentioned any it's bit. were seen it a I of a or little context incentives. we've revenue, there of down else look of kind it the that revenue that revenue When lines. assessment at was But just to smaller but for was the know know items And stronger. call-outs a think similar line then line, in from I Those was I I much some specific slowed trend domestic that some anything FX. revenues. other there? of

there there. take So are questions X I think I'll --

assessments, that at take domestic I'm domestic at to which compared and So is a which in on to the is seeing whole I need GDP is domestic assessments, assessment a other and bunch you're all them, of stuff terms proxy, perfect X% to X%, everybody it's of being X -- is there. by driven GDV is not because mix. -- growing of there's primarily delta just going domestic assessments growing in remind

card fees. got You've

on bunch of going a in got You've there. stuff

that we out to which growth between that So host for things. of growth. the are going salient from kind I call when -- rates features and GDV always some terms different mean, to so whole difference the factors just mix domestic talk is for there, a what I growth of be are come there's in about causing or what clear, level And rates the assessments mix of of like there. But you're could

for So GDV our our cross-border example, volumes. includes

include not do revenues. assessments cross-border-related our domestic Our

come And which growing there, is have of would domestic which you you've the GDV revenue, cross-border got so terms what is with in don't assessments. associated

could You in have also changes geographic mix.

and on the depending growth high-yielding there. the got or negative might and regions, you deltas You've see of the positive come lower-yielding to regions rate

that, piece. Sanjay, the is assessment So domestic

is that the those around. licensing this to the move business. implementation as And something on required payment things of I which again, is is -- one which fees, a the network. look, a run of not we range revenues, it's franchise That On from fees, of mean, are other things things fees, network It's sort. focused necessarily things

So about next going pace I is quarter an fact exceptional grows it actually in the wouldn't at the quarter, that get direction. too fussed the in opposite X

there's the because, a is Just happen. first, of small. why number it's host reasons that fairly second, whole And -- might

customers the less nature as example, more than For you're you that charging might fees get have compliant, them. compliance of

the the that's the long a good for term. by way, thing over network, So

quarter And our asked, which in And in we announced from really benefits of have you announced -- gain share U.S. you around previously first point was We the around question citizens. portfolio then the called the conversion the debit win the actually last asked, the out was one the this. I debit

That our was the is for citizens. well. We conversion with part going quarter. the in conversion are That complete relationship super second pleased exceptionally with most

So new had costs [ we which were out ] sent to customers.

which the little at you a wanted drivers, little is picture, between win. out we've or consumer We looking still had stability of take When QX. when in to for bit of weeks On QX the I between wins, but there's just right? was So matter there. first July, terms share that systems. and you've and So X trends. QX Again, that, the gains, talked right, spending there's bit got of a what about underlying the of overall share share impact that that Webster so we're these

of come through. call stuff which will will on, whole roll kind conversions, out of and will I'd which UniCredit. bunch particular, those a In You've got be multiyear

So deal in win this we XXXX. UniCredit, announced had in

completion of a underway. of you actually is be That conversion before set start will conversion that. over the Bank, frame of of underway. Deutsche that While time multiyear will It again. take to again, a couple years kind is

all time. out of things these play So over will

Our from Huang comes Tien-Tsin question from next JPMorgan.

results Good here.

easy VAS call second any comp of for interesting growth? any on value-added growth terms know Just but out trends that in year of and from VAS composition half accelerated. in of the I the the within and an first terms solutions, quarter, the services of there's

cybersecurity you. terms good to of rate usual a of is in strong The on sure. XX%, the side. related Tien-Tsin, this, hear for the growth growth suspects part payments particularly Right. for driving

continues grow very grow that So to and well.

on as data And So out I for to learn, more need for in there's side, see thing. analytics That's remarks, laid interest, solutions. X continue the and example. test fraud great more we

examples give serve forth. figure customers So trying what of make they sense, are so customers how campaigns out their kind how of can and number to a you I'll better

So no particular change there.

these think largely I Overall, response, effective, unchanged. the that scale earlier earlier the whole in be make the and to a AI is more an on fundamental touched products board of infusion trend. of better more across that's trend I this mix certainly

we're services Australia the up the positioned Europe, on the here. and way, our but we significant open banking side. talked in well portfolio, to aspects through have scale a I a invest continue in side. banking open We in U.S. of in newer use cases They still of couple feel particularly

-- that every is see. the We said single to good where rest going lower slightly to first growth quarter the quarter had this quarter a year, as in playing We're out predicted. higher and of we So for be rate.

solid forth, have you occasionally, pretty this is for so comps tougher a but and trend So us.

comes next Our Dan from Mizuho. question Dolev from

give this gave I second Can year. results on versus more incentives, to little growing again. rebates Last us the in of incentives on us the the great a believe bit maybe half color and cadence a and quarter, rebates first you And you cadence half. slower

quarter, thought rebates for the in I what than would with And expected we lower the it quarter, reasons shared Dan, we I had quarter. lower in even second incentives yes, flat said in which around the the a And to is the what look came for be incentives like you than quarter, second slightly had what view and first of rebates quarter. second quarter, would last point we and And lower of ] be deal what timing mentioned I is with the which incentives activity. rebates we and which percentage compared on you as that a will higher that. haven't in and the of think rebates third and incentives then payment earlier, incentives assessments the in beyond today, third expect to I [ shared network rebates second shared quarter. nature will much really quarter of the be We

want just for really that's I you. clarification, to share with what So

next Blair. comes from Jeffrey Andrew question Our from William

some back the but Michael, future wonder I price especially on perhaps in in if the an maybe debit charge pay banking, Durbin-regulated I payments, U.S. versus accounts, U.S. their just to want puts open are of maybe and to you about and particularly hearing customer issues banks bank in banking that give the some some dispute the and debit, the ask facing. takes service about payments, conflicting from and open the outlook enthusiasm things particularly real-time and real-time on of guess, interchange behalf I could consumers' parse of

Right.

globally. open I call not interesting, quite And out. got wished before. have it's And participants mentioned just I would I you to think, just think that over where that applies, I the years. that most So banking said market

earlier. States, when like aggregation on I things opening with see open services, United particular that at a that, actions momentum. we I look of linking a banking the account in or talked Here focus account data or set or around good about

is open made card you the That then your The cards, payments, to banking, -- fraud there significant, point brings money no that protection. for still is comes it if ecosystem is a on that. of the On When it's it's do value chargebacks. and same that a not we and the back. get to there way is payment established problem, is true side comfortable

their the know services, whereas ecosystem absolutely. clear want to in so data technologies understand to the our consumers It's think that well, world account going, footprint card I world customer going get it's exactly an not we of use payments. where Nevertheless, better that to are in how payments. custodian counter emerging role interest works as yet of

say, this data all protection used. starts kind of right, of to invest of we with be all, technology lot a energy which could on. management, that then First and data But how consent

open we opportunity. future-oriented use Opening, it, for in see the cases we recently as of element why most activity called lending. which currently linking, this asset are around banking mentioned, aggregation. is are data they out investment. of that It's those So near-term kind verification, an invest around we more and and And account I account What do is us around

That example one Our subscription of for that. consumers. smart really solution well works is

place real them If XX a you see and one subscriptions difference. makes in got and it you

the think really that it's value it's it, cards we're also It's forefront make I sure bring we evolving. and evolving evolving that to is we're the but trying unparalleled. understood at through of So

comes Kunwar Atlantic. Our Fahed next Redburn from question from

will VAS ask you products profitability. nicely, margin all though growing wanted margins lot How about that of themselves, areas Just think kind investment been? versus here? the of should higher expenses cross-border. as in parts to about kind investing with of in distribution of these various areas expansion, to think do there's expect really of and there Obviously, we various from a product carry you have drive on be expanding they continued Or will moving

growth is ours net here expense which philosophy unchanged, remains for one, -- the mentioned faster thoughts past revenue of at than over I we deliver this showing clip positive the driving of growth leverage, term. you, aspire is, think couple which we a a operating and long is number to operating in which So

remember and The very the long that, do medium investments the line term we're important order term. what in for running is is aspiration term, in growth. close drive the how really running business we on growth eye to making and thing that's line And keep growth So top most bottom the we're to for near a business. to

So our sizable. near, what opportunities are that's is only we because and yes, not but of from in set things perspective, in we also of in super are shareholders the will medium term. us long desire, investing believe the That drive because growth which essential our front

for so company. underinvested a for would long-term to bad And of us leave opportunities our be those the move health

continue will to in we business. So the invest

focus, the conditions those will we we necessary. tremendous we But business going-forward as continue because of priorities, look yes, priorities basis. flow on is, With evolving, are general our of pivot with will that out. market laid the we kind opportunity a that invest the to to growth at do Michael how which and see will constantly We the has strategic will see in

Our Macquarie Capital. next question from comes from Paul Golding

I of wanted and I fraud incorporating a to as AI you're VAS about presumably AI sense. products to combat ask in your fraud. into that part know

of to in combat AI to your the wanted of offense you're how and in Just products might ask using accelerate new terms around products what adoption fraud that. seeing AI new your and that the of investment

Right.

So the time we've digital lot the people digitized see new ecosystem. post-COVID for a as digitization entrants small markets, of with lot emerging the you seen into in of businesses rapid a lot A have world, first using solutions. around of

also and vulnerabilities growing, are digitalization the growing is in So of fraudsters evolving. is technology hands

end the consumer really who need of for done new banks for and franchise in So ecosystem, We've players for us. that. actually AI this to merchants makes an safety an between invest environment anything and where and isn't ourselves like a benefit the oversee security. And

for have data analyze is really the decade, customers -- a a we've have predict that to fraud. technology next This So our -- the to of problem using AI. part learning better been that where discrete is and of machine the prevent we and we've data

very been that's So successful.

there's quicker here, concerned, AI way. to data for generative using us you set. to As And to discriminative technology train have opportunity an that far our data understand models, to AI models used initially evolving more is obviously as AI in our generative artificial a we AI create

new was products. out then we step. mentioned And a putting that of first set So the into Decision Intelligence. I went

is externally sets Intelligence time, product. more fraud data The was vulnerabilities predicting see fraud -- effectiveness outcomes lift and learning Our of that understand is card be. XX%, we forth might for where to that Decision data now in long so that tremendous, our terms a we're stole had using of out available, and are we've driven that machine to the

that vulnerabilities to talked I about. for we on So the reason the see start demand whole

growth. So expect continued we

new to continue the also come themselves, need with we We to evolve. to expect fraudsters techniques up

generative and So AI I expand. product penetration our only of cybersecurity believe fraud that will that the and

customers. the lot fraud. vectors obviously partner I cybersecurity a so much general and transaction-related posture and It's risk a cybersecurity, forth. of We whole is to capabilities the what's of about prediction talked become It strategic cover recon a fraud. company, The Now try ecosystem true our of around broader.

So to if us invest area. continue this space that anything, and whole to going to you're going is grow see further, in

one We Julianne. more time for question,

from Citi.. Our come from Schmidt will last question Andrew

but just to consumer the I viewpoint. message If are want sounds I macro correctly, like for it double-click most in mix, trends the hear stable part. on spend not

If and on you that that us any mean that, there's could for versus be credit, and demographics would different just consumer transaction helpful. amongst double divergence sizes, what that like if click let anything know super correspondingly might debit

Right.

consumer income talked a labor the cohort, inflation, the supported, strong now, by at line puts the market. my of irrelevant the bottom there is remarks, of supported on outset prices. So pretty that much and I about The prepared takes for is on is and that's

world. plays answer. country-by-country. it's and it's not fundamentally that's picture in uniform but So But around The very it's obviously out differently true, true the fundamentally a aggregate,

business. very global have We a

see saw what small the past in the raised of and at is Europe, actually that you through we then doing quarter. rates. And recession Japan They Germany Central look came Bank we a So with today.

consumer wage a that market supported and is a there's point But forth. the lot by So back some growth. that and strong labor of fundamental

dramatic and I true, why think that's on changes that positive remain front, we the that's about don't expect any and we outlook.

you them digital on to we into certainly it's peel that. a The cohorts. and And expensive if onion that higher deal. and whatever do economy. that can the by a what empowered but for look data to you to though comes pretty trip it of you less see more you of everybody up during an more for bit you're make ability generally a can the to less spend when What want and better you do function income, you versus different trying to trip. to that consumer income income, And having much that's or an higher-end that do, they experiences of add mid-income is and clear still income You and further, do the look do lower-income empowered, is have things consumer, the more as lower trying have more the summer, then work

of I that? and inflation our that to of side why do overall all business. prices up together at Because So say about pretty adds picture a we are But And the non-carded. that positioned least feel cut these highly in obviously -- lot we're carded. a positioned categories. of We've we and cycles carded there particularly Post that's across was well travel go seen in COVID, on. good,

see And lot now, So that not of and you saw insurance rise. a rent. inflation you right carded. necessarily auto so That's much in

spending that and comes all the back point down fundamental to through think these term. in don't aggregate, short So we that see healthy are we the things changing see in consumer the

of the diversification Andrew, We've day, in Michael diversification We've different of well diversified the we because at credit. geographically the channels of lends spend. And I'll one end the right, add debit around at just really got model day, business and point, end before, touched on diversified. our and environments this is across got great which good are

the so puts the is take which by has got a we chat. spent sectors to we're actually certain that of dollar long the spend. by economy, way X it's versus and helps happened as reality when dollar on takes relatively not So design. in happened business are these our structured, on sector indifferent And place the diversification It's the really other spent sector,

important so which for And something that's us. is super

Thank you.

to it any Michael hand Now back for closing I'll comments.

right. Devin. All Thanks,

of the and I want and our , obviously it you at about We're only thank you good your a this looking at to also quarter of Day work and from to forward Mastercard. because a for for I November Meeting in New Community hopefully speak much. past quarter. on talked very them, momentum happens in all Mastercard, hard York. you support you now we our thank the Investor colleagues see everybody Thank takes XX of to some So

conference participation. Thank call. your you This concludes today's for

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