MA - Earnings call transcript Q4 2018 | Mastercard Incorporated

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Operator

Good morning. My name is Heidi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard Q4 Full-Year 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator of you Head conference, begin sir. Investor Kneeshaw, may Relations, your Warren

Warren Kneeshaw

Good thank Officer. With everyone, us you, Hund-Mejean, and morning, Thank Heidi. and Officer, and Ajay our fourth Martina XXXX Chief Executive are Chief for quarter you earnings today call. Financial me our Banga, President our joining for

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

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

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

our today of note that basis and their the comments on release XXXX, prior Please our special non-GAAP be growth beginning GAAP slide providing equivalents. noted. Venezuelan our will a additional and include starting at rates deck measures from Both Our the growth and currency-neutral decision to reconciliations financial the items switch regarding transaction Venezuelan regarding entity eliminate due transactions results to card exclude unless we’ve been deconsolidate to The otherwise adjusted switched counts of periods. and our information rates. card

quarters. adjusted this adjustments have our border growth been made In growth are addition, information rates days operating the can underlying current and These being periods. This the prior better switching is that between normalized you of growth quarter rates effects transactions providing for rates starting switch further volume provided for cross we understand adjusted for of metrics. so and different to

comments. of couple these today will call A on adjusted other rates. growth on basis the of comments the Our be

a the to recently are on agreement recommended Earthport. many we aware terms you announced As offer an buy of of

hold to is be not like takeover by to the I that it initially some issues. in regulated QX have potential September scheduling We we comment meeting date this as settled XX, but would XXXX. September our on planning to the of this also planned UK. announce are hold on next investment result community at panel further a transaction event on to will We in liberty a as

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

Ajay Banga

you, Thank morning, good and Warren everybody.

to had year close. a XXXX we strong the to bringing a end So, very record

EPS up the special For excluding and XX% and up basis on these revenue was items. year, are currency-neutral both XX%, a

If affect changes, and you the comparisons. exclude Fund year-over-year as million are to referring growth $XXX Impact Mastercard to the we impact what accounting contribution acquisitions that now the of

operating income focus our and up essentially each on apples-to-apples, across broad-based clear revenue was reflect are XX% and think regions growth growth attraction execution. our our was These net So XX%. basically of I up a underlying results of

will growth detail I invest out much when believe are positioned in business describe our We strong lays continue the in for performance in she to well future more to this the long-term. multi-year the drive very new that Martina objectives. we and

number eye continue overall remains expect the this and solid consumer rates overall environment, slow although keeping In to over growth of moderation. we unemployment this, U.S., said to growth the others, and and on interest still economic Turning political tensions, growth to and trade continue we’re increased Having longer with the close factors XXXX in confidence. term. with some could items; see other rising like healthy a economic that low macroeconomic a positive

show retail UK well we holding up Brexit. a up retail our gas moderate estimates strong, X.X% to same again restaurants for around grow Our sales X.X% estimates year-over-year continue SpendingPulse reasonably remains spending the period QX see according up in sales QX ex-gas. ex-auto, with versus with year and to SpendingPulse In debate Europe, ago ex-auto, despite

how us, seen confidence Netherlands. countries Brazil, in consumer Spain we’re In some in now the We Latin confidence Mexico to have, and however, consumer indicators America, policies and some positive Brazil watching and develop fiscal seeing particular. that as business elections and in are recent see France, behind in the such economic we’re both declines the in

a Chinese it economy few size about limited to the this in domestically participate including negotiations in directly. trade has monitoring potential talked as But economy, does Asia, a slowdown impact headwinds the China, the Chinese of We’re don’t economic us the in picture. given global the we and impact

a we volume forms secular and to across strong payment Now Mastercard electronic our driving of transaction just for against see to markets. healthy are we shift of growth backdrop, most this double-digit and continue

are said earlier, executing of against these results us our a successfully As function I strategy.

products, base give and new We going we’re out just diversifying and capabilities are our a growing examples. building to few customer you our I’m we’re core

one business. all we core issuer as services and and banks business debit credit Westpac the an become also for several wins advisors First, their largest portfolios. Australia. of exclusivity new their with Westpac driving value-added retain will the will consumer our branded like such platforms. in Bank, leverage across we’re loyalty of growth They card Mastercard exclusive in Westpac And

banks and and majority of executed addition, markets. agreement credit securing pre-renewals debit with renewed our In across We’ve we Zealand loyalty in several leading also New portfolios platform. flipping their the Westpac’s

includes for And with leading Agricole, deal, France, the enabling In consumer retention scheme analytics market bank our in platforms, our use that Crédit we to position the largest ICBC’s including renewed we the range in debit of APT Netherlands, will partner country. existing help we And So new long-term data share be commercial they Rabobank, Plus will Predictive and a Global with beyond in partnership which as credit a and acquisitions that issuance efforts. Travel of Card. signed to deal Applied part customer a in also base. exclusive China, optimize maintain our and their international Technology, us

On Mastercard we won with WestJet new in co-brand access signed extension which long-term their markets, the a XX program Canada, make co-brand front, JetBlue’s Square’s card. world. programs partner the a Square, co-brand a co-brands to We were Caribbean JetBlue’s sellers U.S. of selected enable receivables the will through together our for debit with as on the partner each us around across which with

end conversions to L.L. fully scheduled launched. contactless that and pleased also the this have U.S. completed Bean by is way Kroger Cabela’s, are successfully and report We’re our be been are quarter. converted all which co-brand by of the to major cards

building with addition we’re our also diversifying governments. to co-brand In merchants, partnerships customer base relationships through with

arm and where the Now in to to benefit Bansefi, program Mexican involve used the one benefit be payments. been banking This country. have will commercial of new recent social approximately spend of Government, distribute million the of with the Mexico social would that citizens chosen range debit just cards to help we disbursements exclusive receive across is example XX a wide issuance

momentum to So are in card now continuing commercial see turning our to BXB, we business. core

product product co-brand group enables footprint. Bank a with customer broad fleet combining by proprietary Bank’s new acceptance choice that our U.S. greater U.S. with developing fleet open-loop We’re closed

and card to are distribution the a and businesses small BXB should payroll launch progress capture will model for distributed I are the is Com of the in the Australia making receivables. virtual We’re in to bill.com critical seamless us cards data new creates easily cards way local match In businesses solutions customers payroll partnership the of businesses partnership customer through international and and mid-sized provides and integrates Hub brings payments an very kinds $XX with within that payable a reach merchants payments think and solutions accounts space market supplier who provides MYOB enablement accounts for This focus invoice Mastercard and make by New customers. these with and Zealand. The BXB facility, in help The invoice the taking exciting success automated MYOB which currently expertise in be through also secure these relationships on space. payments. with we for that the and payable paid initial Data. needed to existing annual their billion and to over way safe solution U.S., payments addition virtual enable exclusive XX,XXX MYOB’s our virtual partnership bill.com expanding an to

to adoption On channels. across front, improve the then driving and we’re the and types capabilities and experience customer add security transaction new all of safety digital the

to approximately Capital issuing examples issue on So and Santander, two consumer the of a years. grow One, our contactless representing two cards KeyBanc, to and includes few commitments acceptance momentum Citi, from the continues total U.S. within others. U.S. volume HSBC This both side. next We’ve thirds contactless received in issuers

leading to FIS We’re bring processors issuers to also like with contactless to unions. and credit working smaller

On U.S. contactless of transactions merchant now acceptance have card retailers happening like present and over they half contactless Target large enabled the will announced accept CDS that total and in side, today are at payments locations.

through alliance only for at integrate mobile announced make devices In to Actually for contactless Bank Mastercard provider companies with its BLIK payment mobile And telcos a partnering new location. Morgan will E.Sun JP global Pi a to recurring AT&T card, virtual tokenization has insurance that We wallet and country. and a with services, no This our South and payment with app such tokenized debit connectivity digital with enhance new and over Zero, physical a Taiwan merchant for is a bank Mastercard users Africa as finally, a in Mastercard, payments we're Mutual. scale of acceptance. acquirers with models, supporting and our for services, through global a strategic digital alternative technology merchants branches provides players we can have channels white value Mastercard payments continue their fraud as prevention Mastercard provider. including and Chase just debit will digital prop Poland, be and in is via which pay for Liberty in recently XXXX co-brand gateway we’re Bank continue BLIK support issuing instance launch like platform gateway Wallet, solutions payment And so payment labeled system which bill large in which payment expand service payment who acceptance leading to that partners any they merchants. over processing selected capabilities

those update operational me call an of now with growth. turn going forward let over estimations Martina? to Martina updates, results, So the for on financial and our all of metrics

Martina Hund-Mejean

Ajay, everyone. morning, good and Thanks

the that to page end Turning you we three, strong very will delivered quarter another year. see to

a special Net line This great year on and XX% legal certain currency few to related matters. benefit with highlights Here the out are in and a our ppt tax expectations from X a grew items growth. new basis, a of neutral rules. revenue closing includes excluding revenue recognition

a rules. this was the results XX%, the $X.XX, to impact due revenue ppt EPS repurchases benefit And revenue per and the benefit income growth. income strong was XX%. contributed growth net income up Net Operating by XX%, operating X $X.XX Excluding ppt The XX% approximately of reflecting by which contributing new year-over-year. to share Tax including recognition XX share. Reform, U.S. this was up grew

XXX During quarter about repurchased additional and XX, million worth an the January through of $XXX stock XXXX. million we

in at currency slightly in local the grew on regions XX%, Latin outside the approximately slightly to was volume turn with of basis, a from volume XXXX. four, ppt to driven volume growth on growth wallet GDV up lower fourth or see X can basis due a from crypto for up XX% XX% the metrics of currency me page dollar was quarter. gross regions. where Worldwide expectations across saw the currency QX up than growth for U.S. growth funding local operational Let double-digit And America. you in last recent growth the quarter. cross-border consumer with ppt high quarter. and volume credit last implementation in GDV from U.S. X by except primarily you grew of of last the solid We all driven by XX%, saw line events. all was deal in QX Cross-border quarter, QX, growth strength double-digit

Europe switched to growth U.S. page by continued five, led transactions strong the saw transactions and to all healthy growth XX% in Turning at globally. show switched We across regions,

Maestro In addition, X.X card X%. and globally are cards And Mastercard growth was issued. there billion branded global

growth net six page to driven on again revenue as as services unless The by few rate. X currency was a strong in our by growth revenue rebates partially turn to recognition volume primarily the basis well the noted. revenue line items let’s highlights otherwise on now neutral XX% offerings, and transaction described The ppt increase for So and of offset a rules growth, contributed new incentives.

revenue before, XX%. said I net As excluding was this growth

individual the items. line at revenue quickly Looking

difference the revenue ppt cross-border worldwide grew mainly recognition volume X grew So Cross-border The due XX% intra-Europe some up GDV rules to XX%, services. by the grew pricing in XX%, And fees due saw grew our while and is mainly mix. with domestic with and offset safety strong assessment difference Transaction line the is while XX%. volume revenues XX% in in that quarter, this XX% were higher advisors grew and driven finally, to we growth. processing XX% fees particularly increases security other switched by growth new transactions.

investments primarily on revenue includes the to strategic and seven, operating ppt a remaining to X rules recognition excluding and XX%, a the total page related on expenses continued basis that currency special Moving acquisitions. and XX% neutral company’s can was which you see to The related new initiatives. increase increased items

me ppt the down and fourth switched in at strengths So volumes U.S. X transaction January. quarter. volume, strong sequential slower XX%, through we The U.S. switched cross-border, eight, as And fourth down volume turning and of from XX% was in let our increase discuss grew XX%, globally, four still With with are growth with through credit growth have XX% the that’s of Europe. volume globally, a weeks debit. to slide January the of growth numbers quarter, global follows. XX%, similar Switched seen slightly switched ppt In our similar X the we but what outside first respect saw first to grew the X grew quarter. to to Starting ppt XX sequentially. the both fourth

ago. perspective. in we growth XXXX. this face cross-border true impart as Europe let this has certain due significant due proven of funding So is year. In comps been holidays will for and This the by we in weather are the XX% timing European This me in cryptocurrency year put we year-over-year some strong poor activity impacted wallet lapping January XXXX, strong especially difficult saw particularly to to a conditions

mid-teens. a contemplated to expect objectives. For revenue a and lot And about this little in we year, the the cross-broader I'm And talk for year. be performance here growth we of going And for switch about bit will growth our gears will thoughts start is long-term on basis, that out we will during excluded special tax against the items slide on an which XXXX XXXX were and set our nine, up in a currency to mutual certain made and how build did performance base benefits one-time excluding objectives, XXXX. acquisitions earning period recognized

the actually So of estimates the last updated recall that our rules we February for and revenue recognition Tax new U.S. the impact Reform.

Reform. a So as of over most includes over our strong a achieved delivered period, very period. here Net due at which we slightly our X margin grew XX% annual results U.S. delivered compound see XX% point CAGR and estimate. slide, on to you revenue benefit of ahead recent growth the Tax EPS commitment We can annual this percentage the

slide to XX, give Again And to year on the basis be currency three lay numbers XXXX. going period, you future items. XXXX for a excluding usual, performance so I'm I'm objectives. to new special all So from will turning neutral acquisitions to now as and out our a

we faster based same our and by for expand payments loyalty, faster seamless lay future core on are and and And will together as such with applications well enhance So our believe expand consumer one, more acceptance grow business and core digital At infrastructure, grow growth, investment and added Hub continue the to capabilities capabilities online solutions in and we to overall to the few safety the which Track. security and Mastercard like new advance growth share data transactions solutions in and and footprint. time, groundwork and our capabilities performance Mastercard value the the excellent in finally, mobile services. further our last solutions, than years, services that Two, a our business. analytics market enable BXB to the expect BXB way over to continue grow the positioned commercial we to; we very secure

revenue also As over compound to next approximately therefore This we that rate the on deliver is payments of does entering a a based PCE can X% X% three on net result, the pricing we objectives annual minimum the growth downturn. growth low-teens a believe economic and These in reflect globally our period. significant market not over exclude of China and a domestic assume net goal progress years.

investing terms In objective, we for margin focus of the operating bottom-line growth top by and to long-term. continue on

a some we outcome. we those investments threshold of margin continue we’re managing minimum expenses, with our long-term to as know, not But operating like part to for objective. our particular are to of margin that and see keeping who be all you, annual the assurance you would prudent XX% As performance

with non-GAAP which of $X.XX, profile, just consistent So EPS on XXXX the I And revenue special the charges. excludes number described. based

expect CAGR assumes to high-teens tax impact a XXXX share of to repurchases. of rate XX% XXXX per a the XX% continued We includes earnings share and over the period. This

me thoughts our XXXX, on bit on I So, and the special but assumed anticipate continued currency our those on that overall We basis a environment you XX. in have in give growth exclude in for now moderation can economic strong little XXXX neutral a XXXX. see and a slight more items Again, acquisitions. business future from and would describe let you slide

the at ago will lower be So for a quarter net quarter. difficult primarily about in comps year revenue grow estimate first we the annual low to In ppt teens X the than the expect to rate. growth due

year. business will wins the increase cross relatively incentives and this last relatively currency and revenue we year we may through balance the the and implement as of expect and services that in that in a growth neutral QX year low rate normalizes revenue rebates net You recall we border and had strong the

what rates, last current range, the be address Mastercard year have a year platforms Based tailwind high growth for of current ppt quarter to foreign operating to to growth X single-digit ppt expect annual exchange ppt year the flows. to the first relative the $X.XX in a just for given the change the a fund for on at a we a X sensitivity $XX U.S. considering year data tax standpoint is dollar we QX. effects. dollar expansion we payment the have we a approximately to first ago about expected both of solutions, approximately have similar end tailwind operating a expanding transactional expected larger contributed the the the to headwind of value quarter. translational to to also From impact and million rates. will is a impact at analytics, to expect in and in $X.XX value Similarly in much exchange a to products, and quarter, relative annual In euro we We to expenses XX% ppt rate under safety for as the of change revenue. be Foreign to the the the the to On Brazilian estimate the million the XX% an annual U.S. to due and high strength dollar to digital real to and to in X the revenue exchange $XX about expected at U.S. this year. geographic Fund security X headwind expenses, the is continue in level the our intent be Impact new invest profile

to call our turn me the So begin Warren with Q&A to Warren? that, session. back let

Warren Kneeshaw

and Thank we’re now the Heidi, session. for you question Martina. ready answer

Operator

Craig Autonomous [Operator question the comes you. first from ahead. with Research. Instructions] go and line Please your of Maurer Thank

Craig Maurer

night seems reflection for your progress thanks. a of progress taking the last Is expect on share secondly ACH the this and versus to Two that’s in globally you, informing far time this how more first VocaLink geographies? across degree and of year in in year? global And Thanks. real your what view payments questions hi sanguine. we Mastercard’s outlook said generally should competitor your progress what commentary Yes, main

Ajay Banga

services. revenue us we’ve been of the But better a Craig, legs you to expect been and combination one as or things, share on. say, degree revenues growing our leg our Martina services part of also years remember, than to so is, for last told with we’ve stand which is some I think few which to to diversifying more revenue grow first a the And includes core revenue. of yes, faster stool, payments the two gives we that three

that’s change good global place though change sure, our built for year knows? I Will that just we next about I'm XXXX some so of more of good business the in as I numbers. a in And Martina’s assessment The too still -- relatively think situation it economy ours what compare is I our performance have is we’re reaching the the look data sense moderation our and way our about of is and year commentary than talking And expansion. will which XXth XXXX. That in economic over it’s a over and I cannot a that our based someday, about my to a moderation And who relatively don’t XXXX. vision in even those we you travel whole, on think those mean, our remember worldwide of that will a assumption world sense a company. into two, numbers thought current feel feel and or about as knowledge about research competitors see the year is

-- So The and all with first VocaLink our together. that’s VocaLink’s contracts received and have about all put way we’re the position fast extensions. good of and its part is my thoughts support we’ve business they UK in -- the and sense ACH, has the about relationships

there a a of it’s coming that are parts countries. implemented opportunities of believe U.S. So tons in that's is the infrastructure and rolling of has in number for outside, good Nordics. in We Thailand the a markets of In thing. markets along software and number been in there out

on the capabilities. it domestic improve won is RFP ground. years those to switches partner the their with switches There's opportunities once to Now to takes actually up also put

faster nine talk we is over you to months. and marathons us the are these to the that acceptance payments a of to payments six next about me you should willing not play which like But marathon. are Some sprint see remember digital will and

Craig Maurer

you. Thank

Operator

Your next question Moshe go Credit with from line Please comes ahead. Orenbuch the of Suisse.

Moshe Orenbuch

that kind Cabela’s about there in outlook one. tax think I thanks. do of converted? and certainly to I about others what's is could that And an see underlying Are impact refunds talk U.S., wins are was Great, with we of the during Maybe there spending. you to terms of going how mean, we alluded the going you in would XXXX on be the think from situation, likely either timing consumer amounts or some

Martina Hund-Mejean

GDV We that of When in bit very don't because we is driven change in a our growth higher United of you had a that had. in QX U.S. a significant see the terms little the we States, fact we in really the in a GDV look at wins what the numbers conversions the predominantly see versus and growth of

even that that and believe is for you of actually of rest relatively when U.S. XXXX to some well. see out, split the the continue We performing that we still

also actually the relatively stronger relatively U.S. the growth given a good people other from U.S. a but countries it countries. trends U.S. from rate. very, very We from other decline traveling traveling a dollar, small into to decline cross-border We see the small from was saw

just smaller was growing, it's a of a bit growth but rate. it little So still

feel So, good. relatively we

of personal last over moderation there. reinforced, Ajay heard, in a little a we in numbers you little as XXXX I X% was what year consumption expenditure bit a from assumption well put prepared X.X%, Personal said X.X%. remarks our expenditure As a my worldwide what like in as

for year performance at point time can put bit see that you of because a numbers have of in expect do XXXX lower also in bit You downturn. three outlook there our little we a long-term our to some number for a a

Moshe Orenbuch

so much. Thanks

Operator

of next the El-Assal Please Your Barclays. line question ahead. from go with Ramsey comes

Ramsey El-Assal

question, my taking guys. for Thanks

guidance guess, or You mentioned characterize your take would year even last just three year prior generally cycle your to CAGR pricing. three versus the price include not that? very does in you I that speaking ability to how minimal

Martina Hund-Mejean

and pricing. And value have we that Ramsey, the to we that feel added, we we product brings for customer customer any as we made therefore that form. price part adjustments. from or me, shape some any in significant value up of these of course, of able compensated But that, adjustments to to are are make really And would service philosophy not is changes time-to-time So getting to in is only that some like the believe company price are pricing. to that have are adjustments. And list not do they service and the that's their view, down point also world countries actually has many and really do not have from we the how in changed around the it it. on we price a Pricing price of product do that add what some regional

gets as this clients, demanding more are In about than situation as larger competitive addition smaller clients to competitive more that you're you larger clients. very is And you it and pricing. know have more to factor field in of a some course talking

And to that. so, to you have responsive be

List minimal pricing. our changes as really pricing both so includes components. promise well from deal about we make that price And as and those the time-to-time of

Ramsey El-Assal

Thanks.

Operator

question ahead. next Tien-Tsin of the your Huang with JPMorgan. And line Please go from comes

Tien-Tsin Huang

Hi, good morning. thanks

and to it growth the and at from. wanted coming Just Ramsey’s three looking expand is Because flows contribution more in? investing payment you've net contribution FinTech have And that from does new if any bunch in actually curious, that Craig the see a you fair? past where wins, new difference years on been the like from is next and guidance your a versus you three meaningful secular I'm include question years. feels logo the

Ajay Banga

year growth two, give Martina three probably investing from three, the and that maybe expect only our our will two are There four, to diversified clearly Tien-Tsin, new businesses and one they're hopefully later others years growing those get where is expect for stride Craig. revenues said, us that's five say, I'd of it we that we with years. part from three we've in would all and in or payments one, maybe response the those. we're And from next that's what smaller of even in these towards than that. Yes, what the rate would was as this results our making the marathon And includes I considering to cycle a some services, you three over cycle investment year core off where old base; show into those years. been comment after of the getting next a higher kind coming

our a continue core to to wins really secular electronic it's core but acceptance and payments, of should products expect of sold growth our rate platform you helped revenue. broader we our digitization. a at us revenue mix and faster So us and share stuff, helped helped grow than to sold services us payments forms of a expanded and see movement and Within commerce

that more So of the over growth into base, a client remember next services building but are mix the will diversifying rates that our give new three than other built us years. growing it’s core, things the two

Martina Hund-Mejean

Ajay are to verticals that point growth Track. in BXB period, BXB Yes. the And our numbers actually card-based parts. and core seeing of very because such where side to have different that addition looking commercial that, domestic said, adding Hub, two that of business, of today, just we commercial we One, that. the end that. we're of is we by again more such cross-border continuing all added as are that's and bottom you the it line to which grow the Mastercard BXB going good that think building see out is rates our which in on course, the a to as view both that at And a business in some add is as to also But is to something really the from from that we're

Ajay Banga

That's and it's in I why BXB Hub business being talking that week, just those the that's to was I of really about excited U.S. early MYOB days effort one Australia in was the of about of we're early last Australia. stage investing. take a the that's in interesting outside and the

Tien-Tsin Huang

for well. and great. good thanks That's it. for FX as that, the Thanks Appreciate results Martina sensitivity

Operator

question next ahead. go of Ellis line Your Please from comes with Lisa MoffettNathanson. the

Lisa Ellis

just multi-year term? I got line around to you said and less cross-border. focused overall you color My XX% driving mean about in to Nice on team was of putting the I again I guys. you've XX%. XX%, back morning up an sustained ticked moderate Martina, in longer with that's trends that question a in what's aside basis up term Can evolution ticked give your more a XXXX about looking little but that quarterly guess can XXXX volume just purchase I Can growth strong it's more And going was bit, good it. fiscal -- related Hi, back bit internal just an quarter. to you XXXX sense it you cross-border then longer more still to over kind but that little to the on gyrations, sort FX where volumes, for in around you've us think there be period, just before over talk the mentioned or outperformance? know neutral in I is of like headed a give XXXX. like

Martina Hund-Mejean

labors shouldn't running point every XXXX repeat you really multi-faceted have cross-border the like even though was Yes, as where year. I what like itself that I of business doing XX% a before we focus of effort we're really we kind a have fruits And have tell just from said of in mean, extraordinary that really and growth you you a cross-border expect we view. are have seeing -- terms of a to coming through to you this

Ajay Banga

XXXX. In

Martina Hund-Mejean

XXXX. In

in… So

Ajay Banga

in but XXXX. XXXX taking we still are already We’re mentally,

Martina Hund-Mejean

a to guys more XXXX, you So in rate. that's guided I mid-teens why around

all very of the the actually are secondly, particular from the things particular portfolios, What you order best people is get to things have foreign of growth But getting do it get you know kind product, if all once can how that clients portfolios sure in of fantastic you how have after, doing, of going exchange you going people which obviously, on right? working make to clients? you been kind we that in that you give. are are terms then you of portfolios a do kind the to this what rates, product with? that What Mastercard use So work certain starts using you're cross-border that have

the honed a by And advisors in do comes out very way, many have terms with client, group allow many, optimizing and of we the portfolios. that. those to in us way, very of are different to there skill to this big a be So of work which our order in able kinds facets

so look using used portfolios, In various actually being when travelers it’s where commercial verticals, space. the in the right now the is e-commerce at you addition to mostly about that, what where I talk are the consumer the cards, and

many sense fairly by transaction. virtual a being for a focused also that product And also difference made that used clients have we number now on of know, is years the those has the years. cross-border over you in card of our really a significant As

Ajay Banga

offers and data the do science, pretty think commercial is, cross-border that the with this get disciplined of time Lisa, three travel not a tailwinds, a a level team as corporate an rocket commercial tourism And is, of the the put and and the When travel e-commerce. of the secular Martina the what together, part people only and most try both I bit using you cross-border by little with on companies It's of and is combined one extract combined is to. way. all would some that I of you things growing in and if we of it. level, certain travel working of at at right around add we've look that some much get put level with the is it's out thing then analytics growth third our to execution. to type the tries that headwinds consumer hand thinking we're can it How all referring talking about. as those we is bit in secular targeted question effort I’d a most the determined and a little a envelope am the have space And in you of of more got start and portfolios from at market

Lisa Ellis

for color. you. Thank the Terrific. Thanks

Operator

And your next question comes from the line of James Friedman with Susquehanna. Please go ahead.

James Friedman

Jamie. wanted grow faster commercial you. site. excess is contemplated writ the that just I thanks. grow Is realized including BXB. the services Hi, the cycle with than regard large, in to contemplated to corporate corporate average ask of also guidance is average? to to Thank It's that I

Martina Hund-Mejean

really providing Jamie, not we're individual on any this. guidance

is just part portfolio heard commercial the core speak. in as the as of of and the BXB, you us stuff most we say, new So are building out we

Hub, So that things doing BXB that's space. that cross-border the Track on of number is a Mastercard we the are and

James Friedman

it, thank Okay. Got you.

Operator

Wasserstrom Please UBS. ahead. from question Eric line next your with go comes And the of

Eric Wasserstrom

questions annual we something just first to objectives, and margin current delta on the the basis back If share the around low-teens Two performance points of Martina on please, Thanks very on the the of much. extrapolate still implies revenue the going EPS. just intuitively, year three improvement. high-teens level XXX repurchases between operating the

just So, on that touch issue? can maybe you

Martina Hund-Mejean

be in don't listen, to expansion many in math. I want remarks, and not really expanding an run the investments together, do will you run said in So, as depending company number you by a itself, the but the We growth do top-line operating many, imply By top continue continue grow you for the you of made we for come. the might can math, margin, put to company order areas And because said it, just growth. it to take bottom-line I to line do have bank, operating in just prepared to my margin. to and it years this how can I

that. that be have to to flexibility So we do able

Ajay Banga

growth Just ourselves for mature this be decade. should a enormous profitable I measure what not. to operating a in it type saying of really to discipline with doing we industry as In our would we’re way of feel that the margin, focus I we do If industry, we But is for goals. of by I’ve objective. management do in last decade where way having important of we opportunities, but management the expansion next the we expansion industry a philosophy, that margin on were an expanding do you not management would the that my present been is think in very be terms franchise, as is on the holding up

to the operating water. by of telling investor just we side are every the So the throwing of for sticking and all out idea margin that minimum to a realize is not you company

We’re we’re needle which here. ways to threading really management hard be honest is the give day to you of minute of to franchise it which the to way, compared every day, working working the trying and the but as operate lines grow find do we operating as expand it profitably as what also the every and and the in every P&L, only That’s margin objective. of a to

of even doing we’re already. just talking about myself reassure idea I to beyond about because that operating sensible would it XX% you margin to Given the disciplined dropped I'm the managing profitability. have and we’re it

Eric Wasserstrom

TAM one of corporate sort And And Got defining you it, is just middle initiative I us opportunity? how profile? BXB okay. similar can Australia a of could market the if then, expansion a you’re clear, That’s very the of on you. the follow Ajay, sense give thank up strategic that targeting into Hub

Ajay Banga

Yes, in supply MYOB the this interesting well that BXB XX,XXX both reconciliation one payments most I of with year And Hub in United we’re it’s in of interesting just MYOB. ground capability, and has is and market. a expertise reconciliation validation in possible gives And the enablement, as a to the targeting with now to clients relationship get fairly got markets on small in years payment to actually partnership this right MYOB is of the by going take because market size But capability all for revenue objective. have I been versus executing and to go said in small you them. Australia. of local and it payments bill that’s presentment, Australia want it next bills, more gives as supply due customers focused has, on volume which that few it you it through what’s large through That payments that the just that corporate and fact enablement another middle in the the middle very not to providing providers middle market the is States market us of idea originated the being them as in making the services of

Eric Wasserstrom

much. very Thanks

Operator

with Darrin Please And go line your from the comes question next Research. Wolfe of Peller ahead.

Darrin Peller

overall the you e-comm the curious was see cross quickly it of if about Ajay we up, think level contribution Thanks of terms turn thanks were growth, and touch willingness think just then the thoughts. question when your about Quick manage to holding the revisit in I higher term a when the deceleration, sale macro, And from growth guys. could necessary? a you How Hey, we economy just kind be physical border and what question guys. on growth was really expense you on to components uncertain your -- e-comm I can Maestro? just much you mean if of on point to of expenses this able ability are can single-digit backdrop -- low

Martina Hund-Mejean

Okay.

the ups First to of was ago quite the little And XXXX a quarter. then let of for year because bit on at more and this just a give obviously all frankly few quarter had detail. detail year was cryptocurrency on fourth give and a you there the we one. downs more are bit that little cross-border, said as whole XX% you impart me the of XXXX I was so XX%

XX%, French by because in when the and by January. imparted first instance currency I lapping, But we Canada dollar of you So a XX there China on performance how look factors at much when was that with to in the ago the factors pretty quarter a go of the week variations that and devaluation at numbers. the an lot of QX Japan and all ones of this take in Brazil, same it. on look you were number A the vacation European days, had Argentina, deal of January in it. the you we In was the snowstorm when terrific were And of to top have was the of impact pretty year, these XX particularly not in had bit course little called hit the seeing U.S. by the at large bit down. day the much because way. offset a of started going were you year other end a that’s out, for all of the down that cross-border stronger Sweden, which than then you’re a of that And it why

Ajay Banga

to I want but start she want just is to you she Frenchman. married to circumstance, political a know a don't I to married a Frenchman. is

Martina Hund-Mejean

one little So hit a was the one. And cryptocurrency that a -- that on is we already. on bit out that called

asked it’s down rate we this of is So a the and nothing on, going saw year the e-comm for tag. year. that, really a just that's rest confidence the you going why On e-comm cross-border growth question the have particular on we

Darrin Peller

Okay.

Ajay Banga

could again your we to, To dealing back we because expense. tell and question we don't just until number on you I'm not I come to know what period. with it, XXXX XXXX going in as the

ago, expenses a we've our But have some longer-term at which you if being capability desire brand. sustained to new a we through lost economic right -- it's it's even look the here of My expenses. we're way some whether in of a is should You stop see quarter works downturn. there, levers got If a sustained a it’s in expenses, with which our very then our it's look that service the like number I'd a expenses turnaround, around you it. managing or And in the things, impact. be investing to go or or shorter-term quarter of play development a and in of some if investment we'd product should have some downturn a at the only committed where to to behavior back know years take

you make it. our year, we’ve we upside around environment scenarios. budgets go and year through in when the in and scenario been around And more given the downside our chatter XXXX, the can for we imagine downside As this careful even all thinking

Martina Hund-Mejean

just and we times as these scenarios. a Yes, heard I think say you many actually scenario, operationalize we leave me don't as this

correct is from we So environment point course that happening if particular view. the and an expense in economic something ever of to we need see in

to executing have execute you we little today business that do the take to them should units plan they All know the guys. to of very and already what will will for be time revisit way our and it

Darrin Peller

makes sense. right, All Thanks guys.

Operator

line next ahead. the James of Sachs. Goldman your comes question go Schneider Please with And from

James Schneider

for Thanks question one good question, it my was you maybe taking wondering one make -- can clarification. was morning. I and if

XXXX you how about of about of end And quantify payable of outlook. towards Thank And all, period? big longer the be you clarification, then, the the the BXB and size a relative the slowdown much forecasted you. maybe can drivers various how outlook a PCE potentially outlook opportunity, your maybe to longer us for expecting First But in talk receivable. the for could that term accounts you're talked broader as period? of of or dimensionalize especially exactly

Martina Hund-Mejean

like sounds be we modeling helping with really should your that Jim, you questions.

you a give on to you're reflect and have the opportunity we BXB back BXB what overall lot listen, what So we going after I'm to not about opportunity, particular which is very that of said more to are going to we that slices opportunity. trillion BXB, $XXX talked is going

not So of $XXX all we're the going trillion. after run to

expect the Track, already course of like of some Hub, those manifest the three we and point kind will a over that what view of us to attacking And you're in next going that growth. of actually cross-border things five hearing And from to like years we're to of itself investing opportunities. from the that are seven are some BXB revenue like

downturn. did we what we question, a put XXXX really moderate your is For in

revenue gave for from it's digest thoughts can number within that So a XXXX. we that you something the low-teens I

Warren Kneeshaw

please? question Next

Operator

next from go ahead. Rawat comes with of Bernstein. line Your Harshita question the Please

Harshita Rawat

to one emerging hand Thank of your growth India taking lot want And good question. markets opportunities. consumer market. on likely about a Hi, emerging to ask such as these my of addressable markets, a greenfield with you for I morning. now are portion decent markets business

and the some also and competitive other accelerating Chinese intervention is have different landscape giants. by the you government On very hand expansion

risk mitigate about the grow to you're being share steps you that government context in by So these some can of the of risk of taking the losses disadvantaged talk markets and nationalism. and

Ajay Banga

that I today how the of they are our revenue that the they in small markets two for totality. that comprise the would next certainly business, you total be of tell are would you attractive decade surprised emerging The or

So I think you've China just got domestic we think remarks as the really in even play now. don't market as through I my to of said in on

India still has grown these the total And impact end directly so as is that attractive, the the well, as from they're interesting of small. market dynamics the revenue an relatively but on is won't is day our to their at more well us are mean a small. not be markets different decade attractive does now relatively growing you and they're That said. impact

to We play on are levels. trying multiple

attitude the Middle our Africa the America or East towards emerging are governments or be because we is, want first the that is The Latin we believe or there. us there it that Asia markets

we to growth try get well as a that million there that That's and XXX by with to I why million its and million get more for to talked That's respect pyramid working being acceptance, used so with electronic type data the that that just And we XX so to find value counting useful. be Mexico We're find way for work world. safer also distribute of commitment their of And that as services XXX seamless economy show go them we people got cash bring bottom that be convert made experiences and around to through you with things and from to in the better governments us the transactions in sovereignty government now the and expanding we to tax hard safety payments net, reached simple services financial at why to inclusion. do improve that on plus XXXX. about. inclusive of we expand

first one bring and possible do government We to for level what able to need see player quality and decision some as societal market, to the whatever citizenry. first decision. from the far a their engagement. a it allow country. rules make them request you them up it’s they're entitled that's chooses for the their to they the decision, rules rest closed If level that of versus playbook way by us signed technology, win. So field a their of That's require the to If the up in in the of best or could differentiation consumer so to the we should. approaching they global around product, to Best in their of playing is pricing, rules as developed technology the playing of best so towards with part. respect capability what's to best global quality the market that being security best there a for their should and capabilities, offered no compete global we bias get their market open after else. data, people employ local They're or it, another that’s local a a government standards, world. market, they global player release system If their it can quality Then attached cyber be operate everywhere versus

we're emerging So if market country doing to what That's every do. expensive. market-by-market, very trying learn try one available that something we in it's it's to

a it because of to also India. government's acceptance of in of there XX efforts there acceptance a million but there to XX merchants reached grown right on X ago. piece-by-piece India million, Look more QR our go. is make still acceptance it efforts, the X just huge to in happen. million points we’ve Not because tackling million X opportunity at Just million upwards. India, years has India has are from from Or more couple working in than

this the if the is My emerging going is markets. in pie electronic concern share more on and in about within So electronic shut topic after to a growing my less up our from small payments. interest payments I'm of this pie

much is share than opportunity your argue small trying much in liberating about more that pie. think to and thoughtful a I more

Harshita Rawat

Okay, thank you much. very

Warren Kneeshaw

final our We so, comments. reached have end any of allotted time. Ajay the

Ajay Banga

you Sure, to had XXXX record a thoughts, strong to a And few the all a for thank questions. your closing bringing year close. end very we

are we and products our against sectors and in our are building we're core We services. capabilities base new growing many diversifying executing and customer our strategy, so

have Martina future. and are outline and and I to continued We strong our momentum very drive drive objective. execution we company's solid continue with We to to our the in positioned ourselves think I performance growth investments the well deal new pleased feel

thank So company with you your you thank support of for and us us today. continuing all the of joining that, for in

Operator

that, conference And does with today’s call. this conclude

You may now disconnect.

Mastercard (MA) 31 Jan 192018 Q4 Earnings call transcript