MA - Earnings call transcript Q4 2021 | Mastercard Incorporated

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Operator

Good day. And thank you for standing by. Welcome to the Fourth Quarter 2021 and Full Year Mastercard Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator to I Mr. conference would Instructions] hand now today, [Operator speaker like the your over to Kneeshaw, Relations. of Warren Head Investor Please go ahead.

Warren Kneeshaw

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

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

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

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

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

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

Michael Miebach

and up saw X operating in We delivered EPS non-GAAP Quarter the on a net underlying from earnings Thank basis. year XX% revenue versus you, quarter. And highlight I'm ago key metrics. the revenues Good for New starting York. strong we our the were up further as neutral currency growth with XX% everyone morning, improvement Warren. at off

net XX% levels revenues On quarter above the are pre-COVID same X basis, in XXXX.

the recent The macroeconomic uncertainties political supply take and despite remains look chain at inflationary outlook let's positive that, with the pressures. constraints, a front. So

healthy are strong governments signs and each areas environment. a in Growth and both ramp as travel there out Latin expect lagged Asia-Pacific significant recent rebound to has businesses SpendingPulse Although recovering and expected According as recently with of world rest has payment pick to growth America low we consumer to remain been adaptable following XXXX. the all and up investment. and changing may part, up improve rates U.S., which up impacted ago and The quarters. overall European By In sales large always the In types, X.X% a the check, a merit although up Omicron pick economic more thanks year on X solid up has these in demand and were growth variant In coming continue by past to and ago, XXXX. retail the SpendingPulse in X.X% these confidence. versus XXXX. quarter ex-retail to year. up spending is economic versus the recovery potential. the that COVID pace including in been cases, In growth become considerable monitoring, cash the to trends ex-gas from strong, a underlying ex-auto of consumers moderate our businesses has economic pent four unemployment The be to XX.X% a there expected of reduces report, have sales, governments up versus Asia-Pacific versus vaccination shows that bit quarter GDP mobility peaking. surge remains growth based in restrictions. X.X% year Europe, of were is impact

opened the now targeted more spread. stayed effective measures malls XX% least pandemic short at will the limit recent tools the to deal vaccinated, than are that have signs the despite variant. The to world's are we the Omicron have early is is ever. available. to More relates relatively be governments COVID have stirred it lived. becoming population As that of more using are and with therapeutics partially open the advanced reality And the specifically,

are forward Although phase path we've the will disease. always not set be the moving linear. we're signs There the of towards endemic

Mastercard growth at spending Looking well. debit consumer volume grow to trends, improve both to which quarter-over-quarter, continue and continued credit

improvement the in cross X Turning overall higher XXXX. U.S., recovery continued those Cross the to to quarter quarter cross with levels, border openings in X aided than UK levels Canada. by now show border, has relative border to travel border continued and

to the impact end continue card believe on the travel, that in year. of cross While well a to border travel recent XXXX ex-travel Omicron continue not border quarter. return spending Cross to this present had cross we will hold has some by levels Border

overall, edge. moving very the So term in the direction near some as of right a kinds with the headwinds related travel result of spending

our Now to turning business highlights.

strategy, Now priorities November, outlined strategic payments, growth, services and build embracing networks. in our and new remained our are: expanding Investment our X Committee our and focused which expanding diversify we on Meeting

how Here's priorities. on an update those against each of we’re progressing

person into payment payments technologies. aggregate, these In for other in scaling payment targeted flows innovation expanding across in merchant flows $XXX new by growing payments, we're opportunity. represent First, in trillion and leaning

recent excited through online I'm across Instakart, the with platform cobrand cobrand partnering First new In the new Chase Elite announce in a This we're World Chase driving Mastercard. in the Instakart following U.S., leading an we're to Aeroplan with up, Mastercard the growth win program. wins person to partnership marks launch that America on of and payments grocery Chase merchant quickly globe. additional North

we platform. solutions, UK, migration money We're of in to deal services. open platform X commercial in first expanding of This commercial, by to to accounts connect debit know Bank Maestro In I'm Great payment the X to the will Westpac platform to as the happy And million loyalty on with prevention, stages an is players Mastercard. including to progressing also migration rollout. the allow leverage NatWest to a remittances. and of payable, partner the the Merix signed Afterpay by Western’s new in Mastercard new app. Bank, cards debit in debit we've capturing the BXB Bank, banking as will Mastercard partnership beginning addition, their Australia to our and Afterpay, second our Mastercard. We quarter. for plan Bank, Westpac's fraud portfolios with flip credit which that million Mastercards bill Service new debit, Merix consumer exclusive includes portfolio consulting, capabilities. the renewed the in consumer And cross-border flows leverage banking Over consumer will including over several the transition Great to early Netherlands, of will plans pay and credit payments with banks first interstate acquisition customers planned Western Banking

we've relationship the space, with we'll the millions their relationship partner fleet with America, For lead expanded including example, to renewed our strategic be closed-loop Bank and cards. brand for WEX, adding new expanded in also where of We've the of chosen issuance. our their commercial commerce and card functionality as open-loop

payable, Platform. to BMO, Financial, WEX, the accounts we Connect to tracks, scale continue Mastercard the to Turning BOK and Melo

banks, processes also machine Pay, initiate Mastercard the key Boost with applications a announced payment Latin virtual And launch payments, digital flows its of real solutions new in in partnership payments the for and for driving providers markets. and America. finally, for with cash of announced the new streamlining the use other wall we're addressing to global households through built of and of buyers to uses acceptance learning expanding suppliers. majority connections recently across fintechs the We card continue help with capture we Mexico and also automatic improving launch payments new analyze deliver in BXB digital in And we We're which bill X cross-border well. pay Track card commercial as payment Argus remittances. Instant and time Solutions launched in focus region. flows consumer an We enables Payment the flow on to Argus acquisition initial -- bill

established quarter, will PXP cross-border use to send partnership the in U.S. This who services, with Europe. we Mastercard's and transfers a Travelex Brazil,

to to multiple and Send For partnered fintech fintechs use the domestic TavaPay, across merchants cases. in we disbursements processor Mastercard easily U.S., make available with

Now shifting cryptocurrencies. acceptance innovation in gear, contactless entertainment we're and by also payments like installments, expanding in areas leaning

Here are a few examples.

very last U.S. into earlier schedule the We're Middle is been East, program that launch on watch partners new in announced we as Africa Mastercard bringing this received. space. Our one. actively has this we installment The open-loop program quarter the for quarter week, well announced

sell the to We prior whenever globally. bringing acceptance potential form experience reach acceptance globally transactions making wherever we're inclusion of into convenience turning enable crypto and to up leading want. Now great of people Tap progress expanding that, with and markets X acceptance world's ecosystem. contactless Phone and is this by smartphones they the with X billions substantial. X financial active XXX capabilities, Contactless quarter. and switch help buy for from over This pandemic. to also We're increased on in the XX partners to X devices, approximately deployments penetration have is the our now growth, accelerated enabling in consumer of potential and And in-person

consumers will Our NFTs, new to allow to use collaboration with Mastercard purchase try Coinbase myself. their that

card simulate increase And the our consensus with of launched banks, of scale, the of and distribution easier commission XXXX efficiency to helping with fintechs our payment with software We're Ethereum we will in integration along blockchains. native developers and network, speed Platform, to and our CPC modules continues Test work real-time blockchain transactions gain for the make on central CBDDs traction. Our it financial institutions issuance and which Sandbox CBDC and wallets.

shifting services. Now to

and many XX% neutral I ones Our the The on having our currency services have revenue role of a support services critical XXXX core differentiate just in products played can basis. in mentioned. a at group

to for all even December, Yield to areas will further over capabilities McDonald's. Cyber of plans financial three agreement who example a today globally. using Intelligence We platform Synchrony few & enhance like through new propositions. uses Yield XXX from these deliver unified like to into new our use to SessionM's and acquire and engagement a and content software, consumer an Services Again, further of the cases, offer value loyalty capabilities service ranging to consumers. customer and examples growth a platforms a we to offers loyalty Lens Dynamic integrate from with AI Test we and Yield's to our companies product retailers set our Dynamic will particularly payments. you. combined able continue to be includes extend customers. services accelerating Dynamic company When with our global Learn enhanced scale by to expanding McDonald's hub recommendations, Data We & End. experimentation our and great is announced Their customized is In brands of

XXXX in to launched for Ethoca. platform about real in added Paybox unnecessary strong experience our Bank, customers markets, Submission continues every which Ethoca We Cooperative traction preventing a banking on pinpoint. consumers with mobile Clarity, U.S., addition, region we new the Consumer Recently, In detailed Ethoca in including gives purchases issuers several Bank. Central information Bank UK and OTP their across app. European is chargebacks and live

is in area Now services our payments beyond embracing in and priority new third networks. expanding strategic extending

are we build Specifically, identity. the to current open expertise digital for leveraging focus and and networks new out our banking payments on

is identity banking of unparalleled ZIP U.S. these as which open we're connectivity leader digital Equifax November, and These partnerships in we closed we Finicity frictionless the North with leading several are And American global people. partners, last across opportunities. banking such with digital signed helping uniquely attractive the growing combined accounts to well solutions Asia-Pacific. growing has key the front, On open have a as the positioned banking deals the cases. Tongon regions both. frac over upon X,XXX Mastercard range identity space, companies example and XX% a transaction. are API performed in be brings which are fast, footprint solve after our open services. of in building verification expanding space, covered quarter, which payment has providers Aiia with of we to connection, to customers mortgage more its through Europe. banks And as the Air new verification than loan One including where has identity in And strongly wide over footprint extend with in with Ethoca the in before in Combined, our an and Click strong Finicity's strategic large, the market, and deposit value and acquisition

substantial outlook progress networks. macroeconomic services this summary, a and new in spanning strategic with extending delivered that So remains growth The And strong deal the of our revenue embracing we're on against and earnings all And we monitoring. executing quarter. our few front with positive X the and and this areas quarter. payments, priorities: product

numbers. to the over Sachin, Now and you

Sachin Mehra

Michael. Thanks,

investments. currency items increase the from the performance Page which impact growth. includes to basis, Acquisitions increased for share strategy XX%, repurchases. continued contributed from a XX% year-over-year decrease related acquisitions Net XX%, which So shows $X.XX, Operating income ppt to which of and includes up tax execution was revenue ongoing $X.XX special spending. income equity recovery on ppt related which of by was up includes XX%, a no on from expenses losses EPS operating X X acquisitions. impact a was financial impact our excluding acquisitions neutral gains the contribution as including the acquisition up of benefit. onetime the quarter acquisitions. reflecting income was XX%, a Operating offset was our on X Net turning X, ppt to and our this to up and in a

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

So let's local see where to volume quarter. gross basis. operational X, by or currency increased metrics the Page the turn can on fourth a year-over-year dollar you XX% Worldwide GDV, for

cross with with X%. Outside growth levels GDV are of and up XX%, in debit of GDV border XXX%, volumes fourth points percentage increased of Cross by levels, XX% sequentially. cross-border In this was the border opened up intra-Europe credit X the and U.S., and up of of credit volume To perspective, strength as quarter-over-quarter growth XXX%, a put fourth and credit quarter, of other as intra-Europe quarter. XX% at globally XXXX credit. seeing is XXXX XXXX other We points border XXX% XX% related XXX%, border improvement and debit at with volume border in X at reflecting sequentially with cross borders up X the levels. at several of for cross of was at quarter, the in and points XX% XX%. during volume continued volume volumes XX%, with cross XXX% XX% XX% growth growth debit U.S. increased up debit up continued travel

improve of Page rates in to contactless year-over-year several XX% continued grew growth were part in X. regions. at growth Turning not present Switched to while present strong. levels. growth was remain and XXXX Card QX penetration transactions by card aided XXX% in Card in present increases

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

for highlights domestic a of increase offset again Now in let's as described growth, the XX% and unless was line turn well by items, few cross to volume on of Page by basis driven services, X noted. growth currency-neutral on a border transaction revenue otherwise strong The incentives. and and revenue in partially higher primarily as net

growth. acquisitions revenue mentioned, previously X to approximately contributed net As ppt

in cross-border The while XX% grew intra-Europe Looking volumes XX%. volume XX%. quarter. APPD difference with at growth this Other while contribution by the Services was ex-intra-Europe to grew line favorable and increased of quickly primarily including up XX%, increased revenues were than higher-yielding Cyber mix transaction Domestic fees were generally remaining GDV solutions. ppt revenue up were worldwide items. is mostly switched Cross The individual assessments acquisitions. growth volumes Transaction border Data as XX% a border Intelligence our XX%, line fees & processing X due volumes up delivered from & cross XX%. faster cross-border

reflecting expectations, in activity. the deal and were incentives with and volumes new transactions internode up strong and XX% line our rebates in Finally, growth

expenses can Moving a a on XX%, on to see Page from total X, acquisitions. ppt basis, X impact currency-neutral you that increased including operating

to and our investment processing expenses to grew initiatives strategic higher XX%, costs spending increased in marketing, and data increased operating advertising costs. the support due acquisitions, on Excluding continued personnel primarily

specific let's first X, of the weeks January. discuss the Turning now to metrics X for Page

process a provide on year-over-year transaction point as XXXX metrics percentage and First, to a basis. of as continue of both volume we a and

compounding to sequential we impact However, January. This move from turn it looks metric calendar the includes into when the must into versus is therefore years important considering metric. improvement QX to be index as taken X a XXXX compounding index note relative and that consideration XXXX to and now back the the XXXX trend

overall a some level, cross Omicron impact had transactions has on highest at has travel. volumes border So and called minimal the moderation and on switched

the referred for volumes. This trends X in in levels, at first effect underlying we points Going is this of volumes metrics are switched to adjusting effect seeing to. in for QX. through saw primarily driven transactions the what XX volumes. XXX% effect, generally After adjusted are we we switched switched weeks the turn. versus Through increase are tracking of The compounding the switched tracking are similarly compounding the now XXXX compounding Starting up in trends just January, with QX. by I

In growth. volume terms border cross of

X earlier, XXXX momentum ex-travel. over XXX% mentioned in cross Omicron carried percentage offset through in on this effect which the is points of border above cross In That compounding the in I of X in QX. we December, weeks of QX through into an by increase impact The present versus travel January. of spending at pre-pandemic Omicron strong border This the levels saw as up not As cross impact partly Overall, partially has impacted levels. cross-border volume the been now the levels, a card by case, partially hit are January variant is first now November. virus January. travel border has offset XXXX

to Turning year. on share I X, Page to our want upcoming thoughts the

resume as border cases. surge in The we the the in cross travel and is expect levels growth recovery future The some surge Omicron overall up uncertainty macroeconomic was variance, cross-border passes. there to prior well spending domestic despite is for outlook and And positive. to for related are Omicron. progressing expectations continued While well our recent to the recovery potential come XXXX have travel in

the forward path deal restrictions. border by phase relaxed the the their with we signs have there to pandemic the levels of the end And to time. improved disease. XXXX. although of endemic Michael Many linear, just And may expect moving are cross-border noted, tools continue to available have As not recover be with XXXX travel towards are to countries this we

portfolios wins, and oriented us travel capitalize recent diversified Our services these deal on of set to trends. position well extremely

full expectations XXXX. Turning our for to the year

to the grow net teens high acquisitions. be a exchange ppt dollar year forecasted case a end to due X on to scenario the expected currency-neutral U.S. for of excluding basis, about rate for at the Acquisitions are add to base strengthening revenues high this of growth, to to is relative X Our of to while foreign a headwind X primarily the is ppt euro. the

terms network of new in continue In expenses, payments, to we operating spending invest priorities short manage and our carefully as to drive our growth. and long-term services we

to the expenses ppt and excluding a tailwind be low the items. on basis, For end add rate Acquisitions a for this growth, special operating currency-neutral forecast year. at low X while X about to the approximately grow to of ppt year, expected is exchange double-digit we to acquisitions expect foreign of a are to X

tailwind the ppt within forecast as we quarter to while operating growth, trends year Acquisitions a are to the exchange Omicron of ppt foreign quarter. X of quarter. standpoint, now currency-neutral to for a exchange the teens net recede high as a impact ppt a about the improvement rate. foreign acquisitions expense from expected is be to be excluding a revenue XXXX QX and expense excluding quarter on lines. of range to end end high spending growth approximately of X the digit basis, travel Again, starts to some to the about expected From add Acquisitions versus is expect forecast this currency the high border are in expected operating sequential on at add X the special first cross for neutral high-single an growth be Year-over-year Turning ago to This at this to reflects acquisitions. basis, to X to is quarter. to progresses. a relative while growth, be headwind ppt X

which out. we not we reminder, the disclosed year-end and which a closed acquisitions it them As year after impact subsequent split of discretely do for the the time

into the Finicity, base. For of XXXX in November closed instance, now which is folded

acquisitions and anticipate mind. Dynamic are closing items keep of first pleased half both XXXX. closed Aiia pending Other to in of to We of acquisition in November in the have the Argus Yield the

that investments, non-GAAP levels. our approximately On prevailing at is on that of the Slide million X-year and a our to and expect $XXX backdrop which from turning we the This Investment losses XXXX as our other earnings jumping And line, The performance XX% income that our QX current introduced on gains is slightly With rate our excluded we metrics. and excludes in equity due mix the for per expense I change, run at based of of over update there no geographic Community an off a approximately for to finally, for higher although Meeting. November on XX% XX, line our like to tax is period XXXX interest are given to now XXXX year quarter point business. to expense and rates are bottom rate our the debt the would objectives first you we performance.

will these of As XXXX This XX% a the over XX%, to deliver after plus neutral to XXXX. a we Having an leverage, delivering said invest to to for annual we growth I impact we continue and excluding deliver and with important revenue to exclude in losses operating equity it and of levels and currency annual is low-XXs are with special positive our growth philosophy CAGR. an items, And XXXX a margin future cross like border on to a services XX%. emphasize net high-teens. objectives an Warren. growth we will perspective, delivering reminder, XXXX And XX% rate doing by that of to annual margin on continue of CAGR in this, basis, we believe compound with that, long-term target equity while a finally, expect minimum investments gains volume continue to currency base revenues philosophy to acquisitions. the special Using end call as closed the period, EPS I at assumes the neutral operating in losses a the to travel returning range XXXX our that a expect and acquisitions turn would rate of operating basis, on investments with the From dive us this mind. over market the and back operate to on items, XXXX in

Warren Kneeshaw

Thank for Jumaria, ready session. we’re you, Sachin. the now question-and-answer

Operator

[Operator Rayna Instructions] first with UBS. from Your question come will Kumar

Rayna Kumar

Good morning. my Thanks taking for questions.

border cross levels, with summer? are anticipating you the any to financial above pre-pandemic your spending in up pent the travel So now guidance month demand we in spend get travel as particularly in

Michael Miebach

is Hi, Rayna. This Michael.

Let me off. this kick

year I again they in And whenever as the up and we said can, and has So continues. earlier travel see again. proven see pent demand year the We out my to People want demand. will it in get it remarks, last and do pent-up been before.

the return So we've to there of levels travel to there. continue pre-pandemic will been is the believe about by assumption cross And year. an that pretty that, we do border Sachin? vocal end that

Sachin Mehra

travel, a little to back will was and around bit And this, of saw out believe it. that pretty the you saying. get demand get The just going borders for as their we more people little people I'd relax much Omicron we is impact what we short-lived. when of travel. XXXX only travel, be do Yes. thing people there is to And go Michael, just intent comfortable they to and the where covered express Michael to need have just more ability that to to express back add bit the start a

Michael Miebach

In tonight fact, to there you go. I'm Europe so heading

Rayna Kumar

Great. Thank you.

Operator

with Your next come question from Harshita Bernstein. Rawat will

Harshita Rawat

ask participate But been the RTP see then enablement countries in you you in Good morning. with ones How to have for UPI, that? used It And examples India retail playing that business. is domestic you consumer question. in terms which payments. FedNow? for payments do it services how you. out like user than of Thank many Michael, FedNow. for like XXXX. the want has with U.S. A looks you Thank my for taking other system about to I can

Michael Miebach

Harshita you, Thank Rawat.

payments So go solutions. when experience allows FedNow, countries. see and demand demand to there our by speaking, real payment more live. consumers. We we The in Standard actually have XXXXX to time But other real there's the it comes carry in alternative believe we'll government, There's by businesses broadly if data. is, with like

time, conscious So how we Vocalink Yeah, won't years where I reasons on this now. make But promise was decision some use why participation realizing and is in basic I cases from XXXX, sense use there's an excellent X have yes, like? bought certainly there's answer take bill engage is to all than time alternatives. might drives same a of to exactly real there the I a and that. displacement likes. opportunity cross lot play remittances, ACH huge account you sense. makes that's are we in case range want and whole simply If that more a or To the it account focus where sorts in that of a And looks back your that an what question we to payments border And And I be and a those pay there we we cash. At there ecosystem perspective, at just value. today. that use It's -- look want cards said. just on might have cases alternatives, but continue when invest to

we tools our That's whole the where comes our have in, solutions. strategy. gamut think differentiation participation across the multi-rail our I is payment of and

in other not in have parallel. solution. solutions, we the like multi-rail quite one We It's the over couple have true that to last years this single significantly of one advanced

you If at exactly that's Track, Mastercard look what it is.

good predictability way options. Mastercard Track, across like the but You the pricing, the you -- of any any these through same way the all can through of payment the all security pay is which which the optimization, Mastercard

opportunity So participate new I it to flows than as a anything see else. in fundamental rather

Harshita Rawat

Thank you.

Operator

Darrin Peller Wolfe come from Research. Your with next will question

Darrin Peller

kind words, of the of spending probably would is In us probably Thanks, than parts guys. border have acceleration would of that sustainability of but are Can the And on payments. added again? maybe of we business guys. can Thanks, of parts walk think Are parts we sustainable? what that the business you now piece be. we thought as that Services other electronic business your in have on you that partly through outperforming Michael, that's because the sustainable then see another terms when recovery just is volume higher catch those upside the the the otherwise bigger than panic it just remind the see to could cross otherwise besides are up where have about of been. now? given you the it partly

Michael Miebach

Thanks, All Darrin. right.

So off kick then and I'll that Sachin can start maybe in.

of first has of a at online. really more I the think when push is online, X online real I more that secular lasting more everything. come trend. this out mean a out has to a I years And last structural spend what commerce, look And trend, over all, banking, we had fundamental is COVID. that shift gotten online the So that,

research consumer we will I of market bit to that do, we like learned every that it. say, So research do, people

continue to going I'm do So that. to

more that guidance And driver be assumption an to that a positive think is growth accelerated I in believe our for will a us. that gave race we towards big that the a economy long-term digital continue it's opportunity. So X-year we

driver. growth sustainable So

come it in You XX% out we through acceptance acceptance, growth. build how see

opportunities penetrated and not find yet. continue segments our just that to pockets We in flows and solutions are with

in think, at no us see show term, And mean I secular more the I I use up white Investor underlying the I leave space. Day, growth, I so places. the see

strategy. one is is our payment that of pillar in a expanding why So

world You a need more throws world. digital a in that people to world, services, safe up now more lot that pointed data, to in is more in digital, a more be services that digital

to tool an Yield solutions. that. Basically, we gave really for part way, our security merchants the been of of enough. in of can't growth the for retain rate the elevated XXXX A how C&I make growth in. at and how run then That that's digital has So end And do find services, service outperforming. rate something and more. you of easy fast need I where to will Dynamic very, have sure, our people in merchant A services identity an that we will essential data to are more space, and very continue customers data, all positive. want whole strategy analytics, network solutions. customers? fuel will new and with banking, the that do comes now for data. understand More more more the they is open see On do is entering digital into our perfect That's world they course, that the of which data they XX%,

leading. Cross of opportunity, -- travel all catchup corporate over It there's been for different question, significant that The catchup back travel and time, travel. travel is has your has is curves over So travel border is for domestic leisure us. leading, to been sure sustainable. travel opportunity

So I headlines. think those are the

Darrin Peller

Helpful. Thanks, guys.

Operator

question next with will Ellis Our MoffetNathanson. Lisa from come

Lisa Ellis

hoping guys. I morning, was yields. ask net to about Good Hey.

how is the to the other? to in And for Just gives [ph] just year. back bit looking net kind over now past about back, due yields us first in recently you. a versus But that? XXX basis pre-pandemic much XXXX or Mastercard Thank parse the of over bit increasing X competitive guess, yields what you one were like point have XXXX, somewhat cross weakness out again a steadily help confidence move looking versus XXXX. you the I expecting pressure perhaps last other And a yields something of travel direction? Can into then then years, in on you dropped border are pressure

Sachin Mehra

Lisa. that Sure, take I'll question.

the of the business by and think of changing seen coming terms border mix short pandemic, net the yields to your I look, what in the that. of down vast impact question primarily is the volumes over has driven you've cross So the answer of majority been

the cross a and know, standpoint. you revenues from border As indexed incentive less rebates are and volumes

real fundamentally, a impact say the see environment. of We have always operated competitive in few to relative seen would I that of level through. we've in playing the no over So change we've years. you what competition past the

of is was rebates to the net into our well. couple I candidly, assumption would pricing, and the the cycle very having net you still tell our well and be of case case. So our a years minimal impact been into as And has which planning we believe performance objectives of going That one going ago as that incentives. much XXXX of X-year to as continue

mix cross what services. to net And given primarily to in has on be continues That the our a could forward that revenue changing really point is yield yield as the of you're is border. the by we well. been So in past. going the being accretive And seeing really opportunity case the driven expect Services lot do the well.

Lisa Ellis

Terrific. Thank you.

Operator

Your KBW. with next question will Sanjay Sakhrani come from

Sanjay Sakhrani

expectations, just we any small about learnings curious But than there's we have us I we've the you the it. the that consumer, inbound in And expectations maybe Thanks. better curious, you your another Omicron, then cross-border. like a been that? of tools position just I'm seen I'm Thanks. think up on improved, a travel guys learnings resiliency guess provided Good if know Do from the we haven't as U.S. morning. impact. there there's when obviously, where the your any question follow understanding have I feel were put changed? were and from when I what

Michael Miebach

All Sanjay. right, I'll kick off. that

learnings there there learnings whole So been the industry. clearly, been across and have have

the have time about whole as may and followed the back You this coming thought a during some of surge, case narrowing. a between are season, earnings that how surge bookings period airlines the

not learning that just more businesses, earlier. just become first consumers actually governments. it's the consumers I said So adaptable, consumers, and that It's is

more learned. have quarantine days. are Now of those how measures learned are. broad-based distancing And governments also the have social and terms likes governments much targeted these And and in rules

-- open. It's at There's in no hurdle entry no opened were When really traveling more at no on all. hurdles And get back. borders just surges there I'm U.S. stayed said, there's As to in this I Europe. point. are to pretty I November, going easy Europe. said the

rates of far going might a governments I whatever benign deal So the to more up, and with vaccination learnings there. much and mix so combination makes think be coming

So we rest year. took that of at the is assumption a the we significant looked that as

get You routes more also out opened, can. want being they more that to whenever people are see

there's for of package kind together, right So think, make the go to pretty there's out positive. a I ability desire the and us that us gets

Sachin Mehra

Sanjay, what And said. to Michael just I'll add just

remember we inbound represented of they we said. shared we in Canada U.S., which XX% through cross-border total of U.K. November you we the U.S., corridors This same roughly is that XX% -- travel roughly think of Investment Canada. travel border we QX at have cross our shared And November, levels. you'll metric, the at you talked in is is represented Community with XXXX, these with had at QX data an progress and saw of quarter said tracking and UK U.S., volumes, levels. the XXXX about, were update, And borders Meeting, the they which we Michael I the open, now XX% ICM. UK, Well XXXX as which just as in at Canada

our people So confidence will when an that's expression they about travel, of -- can just travel. how

Michael Miebach

And want more point. to one just add I

some these are shared talked learnings. of I about macro Sachin just So -- some the upside the potential.

of we with that and Now engaging book consumers else, taking sector all that learned same the cobrands, the versus our so what leaning from is they going are the both our travel everybody that in travel that into active more on. somebody and that, have customers of space is winning is partners opinion, hence

launch et year, of the the whole of one range one, with et the last wins. see IAG recent was more cetera, Aeroplan renewal The cetera. Chase, You JetBlue

of by and engage industry make like which the lot programs really there's to these learnings or we a worthwhile, travel on cobrand So cobrands themselves lot. how a

Sanjay Sakhrani

Thanks. have crossed. I perfect. my That's fingers

Michael Miebach

Yeah.

Operator

Tien-Tsin Wong with question come will next from Your JPMorgan.

Tien-Tsin Huang

ask high-teens view, guys that. like it January to outs outlook just there? morning, call of talked here Sachin. Michael just travel is near are Or macro above headwinds. what well, much when the you check ICM it But from aside your and growing above wanted revenue from about changed Good sounds trends you. growth Any -- at want like it XQ -- that Thank conservatism? hasn't to I for too about just looks I your term your that, nicely some

Sachin Mehra

I look, would here's mean, So say. I Tien-Tsin, what

you terms our QX in what I of think I thoughts. in shared with

You've strengthening is which there from around I the got estimate the is about coming to what factor in our that dollar, headwind, is. which -- kind of talked in U.S.

assuming But would that expressing with than of metrics and that, prepared first we're kind is the we're how of which the remarks. in you shared through of kind I of course call. where of all we're my to recovery Omicron quarter, So the one other over be come seeing our current kind

what And of going time. seeing X So January, weeks emphasize into index really in back trends, to the at and additional why of has the you're for border. a was transactions nothing What sequential adjusted on have you're there. effect looking giving XXXX compounding consideration I Omicron terms you one when cross when more got that, around switched -- to which color effect. will on checking of I the else compounding first impact take you're switched is that was the volumes,

Tien-Tsin Huang

you. Thank Understood.

Operator

from David with Evercore Your ISI. next question will come Togut

David Togut

payments Or this affecting corporates? card credit between over example, year appreciate in And in morning. follow with and Europe for growth this card pace you. Europe? this your banking? public account? as see up, debit Amazon's for at And Good Visa account how a more your And payment account-to-account Thank to X do credit What reflects this rollout of very a is on one-off negotiation would are options expectations whether you open the under negotiation I perspective acceptance UK. Amazon

Michael Miebach

right. All

that. David, Let with me start,

adoption account in Europe, been slow to in you the over last account look rollout. So years in Europe. relatively paced terms and consumer When it's of

invested We with have account, side Nets, heavily on that of with -- open to account invested Aiia Vocalink. banking we're with across the

we're like it like we up, think of pace. So what the I direction. deep call We I it's see -- in -- space. terms in Take generally would

would like that's the I Initiatives EPI. thing first say. So

And the I of their they're that reflects focus just in initial the is account-to-account same that actually card that said. at You thinking on and the longer run, look side. say

with of And investments kind the think cards our continued be So for we optimistic banking see to open about I cases account we And pretty basis account. our growth in covered particularly but UK, in there, Europe, use that. long-term significant in we've opportunity there. opportunity at the can our initial

Tesco, with are with looking partnership Our positive. Lloyd's, very

So fundamentally your question say, for I for around a and question would Visa Amazon. that's Amazon,

particular These were over resolved. public all. relatively involve short and news lived of years, We us the negotiations did domain now have not seen these and the kind at in then

differentiated we have we're relationship longstanding to products. going a with a matters. and And we of have strategy, whole consumer Amazon set to Amazon. and choice strong why that agree a We with multi-rail work delivering That's continue

worry from So nothing particularly about to perspective. our

David Togut

Thank you.

Operator

Your Keane Deutsche will come next question with Bank. from Bryan

Bryan Keane

morning. Good guys. Hi,

quick Just for Sachin. ones X

anniversarying still on little at switched bit the that's of some January know the was a month-to-date XX%, percentage just the comps. At increased the running of I X-year know I looking Any call of can if volume where an it to in down just don't before. that's Just U.S. basis, incentives. thinking XXX. year-over-year rate give revenue? on for then secondly, or And a us there? But about 'XX as out to fiscal as growth percentage Thanks. year that you and anything a on guidance from a rebates XX%,

Sachin Mehra

Sure, Brian.

comparable year-over-year the in the is the the January. at weeks Well, On first there. X referring period growth better sequential XX% looking the spending And of you're first that's comp happen to goes year, you're back And to that which -- point, what ratio. trends a stimulus, of tougher enabling on back impact was in you're and economic this seeing the there. the last

competitive your the mean, of emphasize first effectively second with rebates are of thing, focused to case I to to kind be. the time. environment. the point. people too the On environment. on whatever capabilities, that might whole Look, the part we more I we operate Look, that in competitive compete are. we sure I one our make products, just need the answer incentives know Trust that's us, So want services, we and And question. Because

past. We have what the environment we've not operating in competitive to meaningful shift been used in a to relative seen the

is year. and the question, all in So a thoughts your the what and of the And you well we incentives That's plays our to expect dependent growth on this be QX. shared specifically I've to as mix rebates QX, similar level we contemplated year extent. rebates as where percentage on on kind But the full that's timing volume deals QX. kind of and incentives. with through of as of out to how and It's of to In are. just set on

Bryan Keane

so Got Thanks it. much.

Operator

Ramsey question next come from Your El-Assal will Barclays. with

Ramsey El-Assal

in wanted and your this year might question guidance? morning. could for And that thanks contemplated taking sanctions, I whether us I pressure was seeing in And full pressure abating to my tighten be And Russia. just political what unrest your wondering that there you due and should you're to chain -- contextualize fact, to if help exposure and Hi. Ukraine. ask in any expect with we Potential changes if separately, supply about

Michael Miebach

All right. Yeah, Ramsey.

with start are there. touch chain me the quickly. clearly pressures supply and Let on Russia Supply chain

supply the There's at You're shortages. of affecting chain. all chip looking things sorts

I continue the We supply these to short-lived believe that chain out, first so say. would that's are thing bounces the rather as actually

particularly and So people a there's is they that. seen holiday not also we've What spend spending, through assumption huge significant holiday around positive pretty in the season our season, on. outlook can what spend

if buy can't you buy something they else. something, So

in categories. shifts seen we've So

here. up very, we was the I going how perspective, aspect again, early demand to that points to tell play it certainly is very is this to pent So from referred Russia, geopolitical one keep that important -- in of uncertainties to earlier, that is focus. an out. have the On This

important substantial previous strategically important We'll and manage a we see that. years. plays -- see sanctions what is. have seen have and to in us. And it have that We market We'll basically Russia for out. is applied to through how

Ramsey El-Assal

All much. right. so Thanks

Michael Miebach

Thank you.

Operator

Your Dan Mizuho. Dolev next question from come with will

Dan Dolev

call If the domestic very to at points. about my a Is you on I think taking front? Thank for want was out There question. Thanks there closer running morning. about more assessment I yield. much. XX.X number overall higher, good Hey, that ask anything basis on to at QX, XX. I Historically, look you're was question to before specifically.

Sachin Mehra

I There's on on That's basis. we've that unusual call yield in domestic domestic seen. holds a parts you've I there. Dan, off still what The going historically on look, see going mean, of the seasonally have seen And -- I we nothing what in actually typically, out, are true out that. bit. what trajectory forward moving really QX, what a we seen think to mean of assessments is little drop assessment, we've to a historically bunch which of just

Dan Dolev

you Thank it. much. so Got

Operator

come with question next will Suisse. Moshe Orenbuch Credit Your from

Moshe Orenbuch

affect of kind Europe account of perhaps about account part We've regulatory given wondering, up to the thoughts Great. Mastercard Thanks. evolution have being that little Any about domestic issues Aiia? And you might discuss Thanks. the that a U.S.? and this just discussions I'm standpoint. the that, with and some often that just things of be both that seen of from bit. some how the players advantages investors. how of But had comes a product other did thoughts of growth in the could kind in [Indiscernible] And for side of

Michael Miebach

protection, forms Right. in is an of that payment. always We Regulators consumer always are question. protection focus. in on of Moshe, there interest regulators clearly data is security, excellent new keen see on on

do pay now, that We differentiates consultation. We have know account with interest doing have this t that a seen to it regulate focus. us Various most an in basically regulators come and Pay much like I regulator think similar. space. shown In Vocalink -account, you later. in established something recently the very UK a in. is expect from buy should an the to by in Account And UK is player interest

very clear data principles. have We

likes. data and believe we don't the -- in the anybody. sell -- We consent, have strong likes consumer the to consumer We

is in codified Mastercard that of franchise. All the

partner that differentiator. getting a it very roles money goes company So clear fintech doing people I that and to that A in is fashion going to organized us, B, sign an connection being a with but just be a from providing with a think up beyond and

Sachin Mehra

Michael just add what I'll to said. And

I how were We it our has do there, the you're right It about to through we were in the went data got when the been in banking was that all as we got from you've we doing to our how very activities relates it space. to think APIs. about deliberate way. the remember and we talked philosophy. open going that being, And idea what about banks, particularly

offer. in big it that you the the it because but which -- by doing and help get create standpoint, it can virtue more elements should through you manner data APIs, you do right actually only product, of thing long-term through doing safety cannot You a you much sustainable it's a from be to a not security do can also

So what very the much part in has for and the been philosophy of us. parcel from get-go space this

Moshe Orenbuch

and you, Thank Sachin. Michael Great.

Sachin Mehra

Thank you.

Operator

Dave will question Baird. Your with next Koning from come

Dave Koning

X%. QX, Yeah. it only think X% Hey, I in noticed X%. guys. prior to And The up Thank I you. X size was ticket quarters average U.S. up

think lower to consumers returning seems So with Is splitting card-present accelerating, That transaction inflation, positive you, to just it you decelerating. impact? sizes just the would And what's that would or not maybe be transactions? right?

Sachin Mehra

how that's Dave, switched But again, volume XXXX because higher trends ticket would to the out XXXX should compared to in of we've I you'll so, from from improvement general. improvement transactions, which make switched of is XXX. do you and get people is XXX% you that ticket switched effectively and They volumes a want look which X-point on are sure the which signal to in size, improved which XXX products, got see -- there XXX% quarter-over-quarter have are more that switched ticket size. higher That higher I question. do at transactions to trending, is credit if happening, you travel our what to observed they expect for a it as

to is -- higher. be As also happens, e-commerce that as happens there

the a So you've that seen on come through basis. in delta sequential

Dave Koning

to Yeah. have like seems was U.S., what it's -- possibly towards or transactions is somehow? splitting just decelerating in seems it like And I happening good different looked referring positive. which It types the it seems more

Sachin Mehra

our what from I materially what shared see standpoint. U.S. in trends Yeah. a globally in we're No, different seeing of than I just anything wouldn't size terms ticket

Dave Koning

you. All right. Thank

Operator

come will Jeffrey Truist Andrew Securities. question with next Your from

Andrew Jeffrey

Hi. Good morning everybody.

or touch One if today that's a inflation. if inflation, the discussed embedded topics for a wonder global your market I business the could generally not or in more standpoint? of persistent we and do just see yield positive you is And from on whether volume

Michael Miebach

Andrew. Right,

sorts it. So definitely on a of topic, significantly discussed all views

take. our here's So

all, immediate broader particular we growth. impacts distinguish of to consumer's level, it policymakers’ beyond in the first all does affect response? What's heard end, what there's yesterday. spend. this, at to at it ability business, U.S. How the is wage a our policymaker this of market? where that go talk the happening look the about We generally Then the macro First across happens,

So there's lot things consider. a of to macro

it side, not basically homogenous. micro the On is

a is overall inflation would different in than our So way it the CPI. be business affecting

to a our rent, So through if you that's have generally expecting while rails inflation extent. large not running

negative notwithstanding GDV on again moderate be very that businesses There that be so is could a on So if inflation in that into account, numbers. has consumers, impact different be it of an showing fundamentally, Taking the impact would inflation that all forth. could picture. and our on that it's

Andrew Jeffrey

taken been into account guidance. Okay. that's your to I assume

Sachin Mehra

Right.

Andrew Jeffrey

Appreciated. Thanks.

Operator

Your next from come Jamie with will Friedman Susquehanna. question

Jamie Friedman

Hi. Thank revenue. quarter. for services to little XX% you just for about taking a the did know I and bit my actually I difference -- other grew wanted great, question. between ask revenue XX% the the other year, up for But XX% faster. services

difference you if a remind maybe us is? the could Sachin, one know subset So of other. the is I nuance what

Sachin Mehra

Yeah.

on revenue our have well. in bunch other going stuff as other So there, in there's of a would sit we revenue, but services that

there. The in our some Vocalink revenues for So sit of in example, would sits there. you've got acquisition

from year And just of revenue we lapping this of fact a so XX%, remember, X those we do have if last you're at at of this point time. is in which other basically growth didn't than acquisitions points time effect that the rate looking the acquisitions, at came growth that

sits of other in on services part nicely. very that to revenues. So services, A grow continues large

in of some a growth growth strong in that is acquisitions, seeing in the you're it -- rate seeing services the is there. growth processing. of of plus But Some come is through combination transaction other revenue being which you're

Jamie Friedman

you clarification. Thank it. for Got the

Sachin Mehra

Sure.

Operator

will from come question next George with Mihalos Your Cowen.

George Mihalos

guys. Great. my questions, Thanks for taking

you as look a here we curious, you're the seeing somewhat the to seeing bigger rest through in the pickup go variability, are trends a Sachin, lot month? weekly you could if quickly, that, of as little you seeing about meaning And talk of very January, I'm a what through world. year-to-date then are bit sort you of related through Just the

Sachin Mehra

the say? seeing world, did are you what Sorry, in we the of rest

George Mihalos

starting like mean, look for pick if it Rest bit I at world worldwide now at versus of little volume the volumes up. credit to accelerate looks I the and a U.S. least, your is

over wondering if really I'm that into weeks. the you're to So last starting couple numbers just the come see of

Sachin Mehra

Yeah.

Okay.

So your I question. got

bounce on first the they I'm trends. which in weekly mean, of trends. so much there's around. I case. in in look, of anything highly It month which would So trends, nature there weekly in on varies And goes week-over-week. weekly on of January terms with mean of you terms I depending is expect question. not we're the But the sharing terms weeks unusual that is volatility to you X what of in our be seeing

it's comp issue as And a sometimes, well.

to generally to emanating is if to remember of what from When we at the spend case. you you've So that go rates, to you're got there's see and that. comparing levels, look to kind growth back kind differences comp got of in the which that's

a last January, virtue by Europe, of in in this stimulus As world, in to U.S., weeks it of there year the the look, a the rate bunch relates going had just that the a first the we about growth Conversely fact think rest world of rest place comp January. particularly really on economic the the X versus U.S. what's basis tougher year year. a and Europe whole of the which last took on from was you in lockdown coming when there, in has

on So a growth Europe comp you have from easier an standpoint. rate

in growth there. have you you're the So to when rates looking factor at those

Warren Kneeshaw

question. . just time I for final think we one have

Operator

our from Kupferberg Bank Jason take we'll of with And final question America.

Jason Kupferberg

guys. Thanks,

ask about there. are headwind somewhat It growth. a QX. of and about of a and here to wanted think we told cadence question should net us Obviously, FX rebates about sounds revenue how Just Omicron quarterly like you

quarter. at that have first comp, But headwind quarter much point. in year-over-year the the than you second is Omicron harder arguably, Your won't obviously, really

to wanted first at a things standpoint, full least of just the try work from calibrated directionally half target. year as through the So the modeling and get year towards we

Sachin Mehra

Yeah, Jason.

about active But full you the say, bit, some just more we that to talk be I'd Look, passes. the reach bit we around given little resume border levels the other surge continue quarters a this end point back said recovery XXXX We'll as expect at we've that travel to thoughts obviously, for cross progressive. started. the border get will And the to of and year as year a as remarks, we very travel So QX stepping you will our on cross the the in XXXX. back front. by deal

quarters. with And plays taken to you. the be that more a come so how that think will I'll about to go bit going what little recovery pace cross be cadence overall, to But needs extent that But what out. we share here's the what a right key I'm through the of And into to account. more travel of as share determinant I about would say now, we ensuing that's year. border

Warren Kneeshaw

Michael, Thanks, comments? any final Sachin.

Michael Miebach

was question would last hoping I anyway. the be me Yeah. for

all you your thank for So questions.

optimistic your And quarter. we we’re happen. call speak people guidance make Thank for outlook. with support. just repeat to you out a there’s next you need thank that usual, any X-year for As you reaffirmed gave in as all and you, you this November. don’t We our that anything see, to think like I to I’d the we said.

Operator

This for you conference Thank concludes participating. call. today's

You may now disconnect.

Mastercard (MA) 27 Jan 222021 Q4 Earnings call transcript