MA - Earnings call transcript Q1 2022 | Mastercard Incorporated

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Operator

Good day and thank you for standing by. Welcome to the First Quarter 2022 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. [Operator Instructions] Please be advised that today's conference is being recorded. now today hand Mr. would to conference I speaker your Instructions] like the to over [Operator Warren Head Kneeshaw, of Investor Relations. Please, go ahead.

Warren Kneeshaw

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

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

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

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

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

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

Michael Miebach

the in Ukraine as returned start XXXX, Good Warren. war time marked invasion morning, decades. for a Europe you, everyone. somber of Thank Russia's to to first

did take than operated Russia business given decision circumstances, operations this extraordinary we more suspend that these decided Mastercard in Russia. years. for our We not Given has XX in lightly, to

metrics, operations are to we're this the families start focused robust up cross-border a up suspension further Quarter We region. employees a in adjusted earnings of XXXX. operating year one XX% notably well-being the in geopolitical growth basis. the our income now our underlying adjusted environment, business off neutral were a currency versus across delivered challenging with Russia in on context and travel. ago operating of revenues of their on and supporting in non-GAAP revenue and whole XX% and the improvement in orderly We Even strong net

remains to On restrictions continue reopen the number We're geopolitical against inflationary consumer a are firm, with as are and macroeconomic and Weighing wages. Labor backdrop are uncertainties developments health constraints globe responses. infection care policy rates are front, fiscal, markets particularly including across spending and economies monitory, this pandemic-related the COVID of low pressures, healthy lifted. unemployment including rising that factors with public supply monitoring, other and chain rates. they monitoring these strong, the

of remains by invasion retail spending strong standpoint. our one look ex-auto, the Latin spending Growth check, a sales ago. this US looking in ahead. the Let's the types, has to a Ukraine positive, year US from spending geographic of aided which at report, part excess based cash and payment buildup including on According savings quarter is pulse all to during in rebound healthy, were retail XXXX. versus risks a are ex-gas following growth In X.X% continues Europe, trends economic moderate, introduced to up America although in pandemic.

facing countries of COVID-related relaxing Asia several stronger has regions. seeing recovery like generally lagged measures. the We're are restrictions, other others

continues upside potential. significant Asia have to

spend. growth. we a see continue trends, switched strong utilities and across sectors Domestic or professional to spending Mastercard strength range including retail, at of Looking broad volumes

growth in entertainment We including saw agencies, travel airlines, spending strong travel and with lodging restaurants. also and

with travel cross-border led be first reached recovery for as improvement to the card the the time strong. not been began. regions. continues by Cross-border of across was In ex-travel growth the continued all the pandemic travel. since broad-based of where present Geographically, terms quarter cross-border levels strong XXXX Cross-border particularly this recovery March has

strategy designed three three capitalize embracing key against on new and networks. in strategic and and our these priorities: extending executing trends to payments, enable two services is our Our one expanding

how progressing an is on of against each update those. we're Here

expanding payments by to in and flows. fintech into small other payments in catch-up technologies new card leaning payment co-brand and we're wins. through prioritized new First, continuing consumer, grow business, payment driving growth We're to and payments innovation comp

announce elements. relationship We're time enhanced and and consumer products. issue we small a will our now first announce the our I'm with excited an have cards includes business several the On partner, and Fargo to that partnership deepened credit to One. credit long-standing Mastercard front, co-brand business also new with for excited in almost proprietary decade, consumer which Capital Wells Wells small Fargo

the to also partnering on the addition of bank launch growing small business the issuing us the will Bank renewing growth card also their will number First through commercial our leading Verizon Mastercard to be with In originations we small new BXB market expanding continue business like these and our portfolio customers. targeting across business Further driving business, Omaha, small a new business companies U.S. U.S. small with partnerships larger total, network Verizon's Verizon National business both and of existing our help for a we're we In new Clara. business tech Outside with partnerships share. consumer their products. small are front,

working business in Clara's and MasterCard them flipping markets for Latin portfolio new additional in five be are America. Mexico launch to to across will programs We

return we've to well substantial positioned on ensure to we co-brands, the are to capitalize made progress of travel. Turning

to of both launched renewed have tech Avios our renewal Airlines a Group leading will partners participate airline. United co-brand partnership And SessionM including program travel can in we America services Latin retailers several America co-brand Latin partnership platform global payment new Victoria's customers. the and Digital, and who Mastercard partnerships. the Secret fintech we processing a of our digital-first of our arm advance Beauty and digital to two they digital partnership our expanded space, Red Staff catering loyalty. Ulta as innovation private with with launch with we've and with cast largest the offering relationships in including banking Galileo. Mastercard will leverage the the American have to and markets our BCA leadership identify partnering also across our bank U.K. will in drive across signed expanded products We're Barclays several preferred a distribute their International the partnership to help through to Outside cards product establishes regional capabilities Barclaycard We're in with new our and of largest product partner debit Financial. to in The in in American the help of fintech a And program exclusive continuing work and new launches in new Indonesia with programs in and continue We Airlines, to with millennials. one integrate and States. co-brand Galileo

this we of the is next card and million migrate of capabilities last XX middle at US We're through are expected in of of are track Santander be driving commercial portfolio the also to this will Inc., innovation by starting many Deutsche All Inc. entertainment execute entire key we Bank's issuance are credit year, areas leading expanding reissued bulk to the in cards to supporting early their NatWest migrations while year to and migration First large migration nine card of the migration Gap end the is optimize the to wins, opportunities be and scheduled identify year early million and $XX NatWest Santander, year. engaging of installments Bank In including credit Gap partners Mastercard and cards Interstate leveraging to commenced in million on payments Similarly summer. four those Merrick cryptocurrencies. against as like quarter addition at consumer debit Deutsche by commencing and a plans a in Bank, the team complete our with smooth and Mastercard-branded way XXXX. portfolios. to flight. ensure new next the our migrations that portfolio debit consulting Bank. and the transition in completed our migrations our be with teams and are and services In Europe, by timely a with to

are few a examples. Here

Mastercard into according [ph] millions Now of network our progressing built consumers Our been to available installment well merchants and Later is is Remember Buy Pay plan. and has Openbit received to program by making installment Mastercard very worldwide.

on Pro and announced continue lender add wide three the installments with new Avenue year. will expansion And and areas. Bass fintech Shops customers later build Amount, and We Cabela's, solutions are a begin support MasterCard to including planned including we Block, to and Deserve, merchant support H&R to to several Southern continue consumers quarter Walgreens. Fifth array we iXc, Lithic partners economy offering focused who quarter, this excited for of international to a In approach installments US principled crypto and this Saks is partners MasterCard key Bank. this

purchase and and cryptocurrencies NFTs. easily helping First, consumers safely

In enabling MasterCard crypto addition wallets their to crypto Send. catching via their up are we on holdings card spend consumers and

identity, design central they with currencies. and cyber develop digital providing for as services and participants, Second, banks market including central consulting engaging bank

network Third, support digital currencies. to substantial each in preparing progress of areas. directly our core Making these

across the the Gemini went rewards quarter Mastercard, offers This crypto US. live which

Invesco banks a and back with line. We that new in we international digital and as established including to several Latin in assets And uses to partnerships Europe, other consumers' partner launch America. crypto credit Nexo also Bello card Europe their one collateral Abra, cryptocard in

be will MercadoLibre psychotraces and security to and leveraging Brazil. their cyber front, bring digital services AI crypto the in trust wallet On capabilities to

played strategic I I've noted differentiate our mentioned. have and services to enabling the support a services, core of Now wins our second many products critical role turning and as our priority before,

We use payment across also services new platform new cases. continue growth verticals to through capabilities, extend vectors our new multiple and

Here examples. are few a

First, month Yield. acquisition completed of Dynamic earlier our we this

we truly our personalization result consumer for engine hub our engagement will will transaction our be customers. experimentation Dynamic that differentiated platform SessionM test-and-learn and Yield a Now decision loyalty within loyalty and and closed, the is software. combine platform The

to announced customer seen of and expanding three consulting portfolio dedicated we crypto our services that We've into ESG. practices these and open currencies a we're and new and banking in engagements open growing increased digital demand successful data, Second, areas.

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brands, Santander the efficiency to capabilities optimize deployed Spain resolutions Learn we brands. improve FX help capabilities operations the and For & tailored help marketing prove example, for streamline Test retail our experience. And to dispute deployed leading customer and in menswear our with

extending in expanding third priority and payments Beyond and networks. new area key is embracing our services,

focus identity. areas: open two is on current and Our banking digital

of payments. rent our like in banking are us assets open verticals, to strategies address unique set leverage enabling converging and Our to new flows multi-rail

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to penetrating our and new In new with by reach expand continue and open partnerships. establishing addition, we banking Aiia, Finicity verticals

agreements terms employment In FIs the with of one, cases. like Later and enhance income, Now vertical. deals to open our of including with its strong and into We're products continue access enable partnered thousands Stripe, financial We be companies lending variety United Pay direct capabilities the to extending are We're use in auto the vertical using of banking in our verification capabilities digital space, will will now at information we've services also the a with expanding who asset Ekata quarter the API several leading which performance open through provisioning States. and permission-based banking mortgage providers. MoneyLine and identity Fiserv, connectivity Buy reach way data leading for our continued securing in

new notably and issuers. with forces transaction we transactions. enables fraud. to improve extend joined and are positioned digital are The we network In this merchant-specific value identity both. our expense digital expanding approach earnings into transaction collaboration approval data. successful Combined, solution attractive strong priorities to addition, recently authentication and after again uniquely and in and fundamentals growing reduce and our and summary, our key revenue payment reflects rates to the quarter, and In decisions authorization with share opportunities which business our before and robust a banking also Microsoft be These we disciplined open and digital growth We're management. against using strategic optimize our remain executing delivered to issuers

our cross-border worked last our reflect war. travel-oriented to the we've expand to what families which least, being positions important, on by hard been us addition, who capitalize travel. of want in strong to In And is not employees most portfolios we recovery well their safety impacted and on have a the well and but

the Our Sachin, Ukraine. people thoughts them of are to with and you. over

Sachin Mehra

Michael. Thanks,

$X.XX Operating to recognition X, including to increase decrease a and published primarily was XX% includes in revenues. six to to currency-neutral XX%, was These a equity Net the for up contributed XX% was a includes up income in the discrete stronger-than-expected tax Acquisitions a a basis strategy benefit one-time quarter from a to EPS and decrease and one on of financial of tax repurchases. a shows due the due volumes up continued a performance ppt which were from gains FX-related cross-border investments. which our domestic mix ppt this contribution recovery which two page one-time US items discrete losses the ppt impact and benefit expenses tax of revenue share and ongoing benefit Operating Turning up acquisitions. $X.XX, which Net above our spending. excluding the year-over-year cross-border was one income XX% reflecting increased group. XX% execution a to period acquisitions. and from XX special on the to expectation the related from ppt our and regulation revenues favorable $X.XX current acquisitions. ppt includes related

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

XX% by see you first metrics to to for growth So, operational currency sanctioned or Worldwide by year-over-year XX% Russian Of growth XX% increased volume credit let's growth hence travel dollar and GDV banks the of for in growth stimulus. of lapping XX% of continued intra-Europe of XX%. Outside Cross-border quarter credit and of data of on local gross turn are travel-related cross-border. XX% with of debit and can the amounts with increased the up quarter basis. us volume globally XX% other credit was a up reported and up four X%, In not the US, where not in note, the increased debit reflecting XXXX. recovery spending US, and on cross-border to XX% related improvement GDV page included third the was the reflecting volumes volumes XX%, volume such QX quarter. with

For levels pandemic, time the levels the first XXXX the of the in above March. was travel time since regions cross-border for volume all was for cross-border above onset XXXX first and

Russia, network remain banks not part XXX% grew card in growth cards are excluded at no therefore page rates several in penetration Turning operations in contactless active of year-over-year present transactions counts, our XX% now suspension growth present of five. and business levels. With and by result XXXX increases regions. to our from issued Switched in were and are on quarter. the card to QX in longer aided strong. Card respect was counts Card-present this of as card our a Russian by

So, accordingly was this X% card at quarter. lower growth

If you been Globally, from and and issued. X.X cards years, would exclude issued prior our cards Russian billion Maestro-branded current the have Mastercard growth X%.

on items, partially in growth incentives. excluding in well agreement that look Russia. growth. had a operations customer like two first primarily the approximately in also to increase items onetime lower was by suspension on incentives a business of contributed revenue of rebates rebates the Russia let's quarter minimal transaction by volume otherwise revenue our loss growth special noted. unless incentive as to in The offset Acquisitions highlights cross-border driven currency-neutral was of and point company and as the out the the a in offset to described overall six of a absence to by to line Now, the ppt due in impact volume rate growth services I this XX% and the of again page growth as and domestic with basis net benefit renewal of

items. sanction ahead XX% four cross-border mix fees due cross-border revenues fees processing were while & XX% cross-border at including up Cross-border grew transactions due revenue while is XX% volumes due this higher-yielding cross-border quickly volumes increased Domestic both faster worldwide favorable XX% revenues. driven grew difference ppt up volumes were ex-intra primarily growth from to XX%. ppt intra-Europe of switched mix customers and a expectations. volumes individual the acquisitions. The GDV and grew Looking solutions. remaining from The were Other by XX%. Russian-related mix. up volume favorable assessments ppt is unreported and a while primarily line favorable ppt Services Transaction Cyber to XX%, Intelligence than full increased seven as is The The Europe to difference FX-related was five contribution primarily Data quarter. & difference our

Finally, and renewed up in new and deal transactions reflecting volumes and incentives the rebates activity. growth and strong XX% were

percentage a due a As cross-border incentives revenues of revenues timing higher of incentive agreement mix to were internode and of customer gross expected absence new renewal deals. in rebates and than Russia, of primarily the planned lower the a

X. Moving to page

that see impact ppt operating XX% from a acquisitions. a basis increased including can on six total expenses currency-neutral You

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

to X. Turning page

three April. the the discuss Let's of first weeks operating metrics for

from we the your all schedule to current periods. and you later trends appendix you data from deck points have For in in cards ex-Russia, activity help the if the show understand from business the the reference an to Russian-issued excluded prior included

metrics with the volumes. Starting turn. switch Going through in

to ppt of grew activities down first weeks we three the due in QX four primarily XX% cessation April, Russia. year-over-year versus For the of

primarily from Russia-related switch down one grew XX% current exclude through QX transactions versus size metric. absence first QX. weeks from driven XX% April the note three larger of ppt prior results transactions. and Russia again by to has relative you volumes in If a Of average ppt volumes this down eight which ticket of a relatively periods Russia-related year-over-year low Switch the grew the impact

the through transactions April versus Russia-related XX% Overall seven periods QX. up and grew of up weeks volumes ppt QX. prior year-over-year versus If cross-border three by exclude XX% one switched transactions you the grew first from year-over-year ppt current

XXX% emphasize decrease in volumes current part XX ppt the of quickly reflecting travel was versus cross-border up levels Since distance of point was the ago. border to lapping XX% to a travel year year-over-year to from excluding from Omicron. through at compared QX. QX. cross-border XX pre-pandemic of cross-border Cross-border travel above now lifted versus ourselves year-over-year is April, same end in has January grew comparable we XXXX weeks is periods the prior Russia One and ppt year-over-year a Excluding and period continue cross-border pp travel XXX% restrictions QX, as a April, of of the up card-not-present rebounded up X% up X first period In strong levels. three the be

X. Page to to I remainder want Turning on of share our XXXX. thoughts the

me Let saying relationships as product our expand strong, service grow our remain and fundamentals business start our that continue customer to by and we offerings.

robust, inflationary consumer constraints, pressures, of mentioned, and At Cross-border is factors, including restrictions particularly Having spending. these this This earlier than recovering restrictions Michael rates. infection and open as pandemic-related further remains significant is geopolitical expectations. this, said any consumer border supply faster we our uncertainties we have travel rapidly and chain as seen stage, impact ease. number are lifted. COVID of occurring a spending monitoring are economies As not

trends of with Ukraine well-positioned in against travel-oriented Russia. Weighing of growth the the business are these and our this positive We impacts suspension are our in portfolios. the capitalize operations war to on

special all taking excluding XXXX to on year this teens basis, continue revenues high at account, to currency-neutral of now high grow expect we items. a the of So acquisitions net a into full for and end rate

to Russia growth same strength Ukraine. and of the revenues and travel So, Acquisitions helped forecasted the in in strong are consumer the recovery maintaining sizable mitigate our expectations growth, ppt to spending to essentially, dollar four range this year, are exchange is we to in cross-border of relative expected as loss the to a the to be of euro. primarily foreign add three the ppt while U.S. about one strengthening headwind the for due

approximately expenses, to of to are With grow while to year Russia. year, add operating exchange our foreign year. a we excluding revenue rate is tailwind at terms two to on operating to quarter, the excluding Acquisitions consumer in All again, currency-neutral for forecast high are expected basis, ppt a continued expenses including net to to savings improvement we spending to basis, high closely a strong a acquisitions In five currency-neutral is special of growth, four for high reflect this reducing to respect acquisitions. ppt forecast XXXX. cross-border cost to and three about grow single-digit to the teens end expect expected related be the of at second This the travel reflects year-over-year spending, rate, on relative a items.

we and about to special year to QX the expect on for acquisitions a six standpoint, From expense easing rate Russia and approximately in operating be excluding a the which four lapping pleased good of Secondly of And a discontinuation this a stimulus the from operating this currency-neutral five finally, exchange Yield, restrictions, rolled fiscal of have is aided to high an including ago closed. just foreign expected by growth, out. to revenues related at expenses headwind one to was acquisition quarter revenues versus Ukraine. to about forecast are ppt forecast to ppt to to year quarter. that Acquisitions single-digit of growth, basis, to the are a sequential items. Acquisitions of and programs are while vaccination we as a the ppt add pandemic-related strong add Dynamic grow reduction five

approximately expense given line, per mind, ppt income a Foreign and the we for exchange approximately keep run rate interest an million in to approximately tailwind to three and be at our are rates our the And expected four on to based prevailing to quarter the excludes expense we quarter. $XXX rate and of This of are items is geographic other Other issuance. our remaining the fiscal each of from equity on our year debt metrics. the on finally, investments, of of recent current gains quarters the XX% mix for tax a losses non-GAAP excluded XX% business. which of expect

closing to out, of If Clearly, I three a on adjust to that, to to to want and offset early turn some reduction XXXX. for with Warren. create remain revenues the comment work elimination performance briefly Before headwind strong would over ppt to headwinds. our objectives year really achieving it back objectives. in we this, from cross-border would travel year performance result on of continue, this of net three it two call we those is Ukraine We Russia-related these previously ahead are the sustainable these long-term the growth XXXX a the our or in our a I And off as too headwind as Having of of CAGR. all expectations, objectives, And said to approximately revenue start net-net, the for mentioned. building I XXXX with company. recovery will focused of to

Warren Kneeshaw

[ph] you, now session. the we Thank ready Sachin. Jamaria are question-and-answer for

Operator

Sanjay will Instructions] Your question. with Sakhrani first from the come proceed with Please line KBW. [Operator question your of

Sanjay Sakhrani

that good about the data remains vertical had the consumer inflation. a I've we I in kind heard e-commerce. question I spending morning. of in on we impact you. Good the consumer that? as some a suggests of seeing trends look anything across patterns comments some Thanks. seeing know as Thank is know inflation? Maybe as such. you on result Are shape you negative on could of sort talk

Michael Miebach

Sanjay, thanks for your question.

behaviors. we as terms is X% mentioned is price pressure forth. yet That not switched some has anything related volume from There in that's earlier, what inflation our changing on gas We're increases. so again under in in terms shifts perspective. there to inflationary are the the pricing seeing we vertical seeing impact consumer increase and of ticket an been in of spending on So the side, seen Sachin have But mix a airline.

this and push online. So They that goes we've going they're space. then by And stand been each will into we that have the effect carded fiscal be considerations all in micro of gas ones particularly of then Yes that's verticals I comes underlying wouldn't are Could aspects which to yet. digital different crowding Europe? back these What rents prices what continue. to see see it we fundamentally, is prices where something be the to that which macro go here. habits considered has there we'll saying on see. be we the those learn the country mean in out forward. ones would is or policy ones tell I of consumers and there There's where which monetary is along. we where not the All see but a might can

Sanjay Sakhrani

Thank you.

Operator

Rawat with with proceed Your your next question of Bernstein. will come line question. Harshita Please from the

Harshita Rawat

levels get I revenue pent-up strong there cross-border still come scenario want to does back of Can with where, just back depend XX% Asia or XXXX the about to there's very above here? you about just pre-pandemic? which your macro China from cross-border for the Because need guidance demand, recovery? like recovery back XX% for can of much kind run parts and rate a the you. here. consumer other Thanks. deteriorate so follow-up sensitivity you to Sachin, let's is should And spend say next talk Asia if China Is normalized meaningfully, even of morning. Good travel a this Michael, ask of to don't come Hi. and kind like Sachin,

Sachin Mehra

Thanks, Harshita.

about pent-up on that to kind And So we're how of be your on actually demand. question on in travel we come our travel our right. you're and in improving as thinking basis first there has absolutely Cross-border cross-border, continues back a cross-border well. expectations going-forward guidance, in of we've terms stronger recovery built than

little out But get a you I to cross-border. that bit to So color more just right on of kind there. want give

at cross-border total now XX% above of travel of XXXX which when top Meeting, volumes are Community approximately you all XX% regions Investor our we're So levels pre-pandemic, destinations would of first we XX are at represented I QX that, cross-border across time. this and tell in for discussed XX% the our levels at XXXX the XXXX.

levels question it's think Asia-Pacific, as The Asia at inbound QX. as on this note to Specifically, travel slower of our cross-border has represented volumes and pre-pandemic your recover. been XX% approximately Pacific follows: to XX% Pacific total around I is Asia we're that important XXXX I see Pacific of Asia opportunity in

Obviously, like that an volumes we particular, come of and in seen as the day can thoughts of from market. – point right about eased our where are happen restrictions inbound One right it So is something how that, a been China. China on come in an we of This cross-border from to couple that still We've significant restrictions this from both Pacific. matter both will terms still are fair there pandemic, that talking amount believe the fundamentally the of see in EP portion is recovery in a and end place Asia we've to remaining through continue the fundamentally back. you number is very at is a does sound. much remains cross-border standpoint pre-pandemic. outbound not that of volumes lifted where when Again, felt very cross-border in very the in

China. I fact, higher argue outbound that, slightly China In inbound the than was the would

think outbound restrictions China people tell have would obvious out for sort. you of what you've countries. that China been people know got and improvement inbound when in things in of So of as also all reasons And about about out locked shown going into has coming terms countries there you we better versus there recovery China think than that, I to are

strong. and So net-net think fundamentals about cross-border I about as think being back of I this the said I

for potential Asia still basis. remains think large going a And the cross-border to to pent-up a demand improvements in I forward the Pacific contribute travel again, region continue fairly on opportunity spend. about

Michael Miebach

Yes. And If I on a years, two cross-border. of the hit was can hard it's hard we while the outset just we the trends, travel that, I mean, of lot pandemic. love over industry the last love the build from But work.

of name where volume. We years we a in. it's I British Cathay have two last Aeroplan, over one additional as list expanded Airways, either leaned And have renewed AirCanada JetBlue, you the LatAm, long it recall Pacific,

said, trend very for So significant always a ready And to year this we're happen the participating going we're we've way. and it's that. in in

Operator

with will line from Your Kumar with proceed UBS. of come Please your question Rayna the question, next

Rayna Kumar

operating discuss was see good of and question. quarter underlying Good the going forward? XXX cross-border margin basis really return sustainable in Thanks how for taking strong upper points. is Can expansion XX% the you margin operating believe in of outside the my you the morning. drivers to of It some

Sachin Mehra

Rayna, Yes. to take happy that question.

the have the high a it day the how know revenue the the day, the At end typically of line mean I we dollars of look we So operating business, given end is incremental to the bottom as nature that, business just at leverage right? you flow of of operate.

the our that it's cross-border. cross-border operating the in and in services certainly of, recovery even margins contributing is delivery improved strong It's good playing those doing which Helping strength So is recovery operating but to overall not recovery parts. further margins. into along all everything just is spending and about new consumer cross-border we're about of travel the

the in of So which terms our we are new on space fundamentals talking the to to keeping driving services and the leaning business back which in it's on of strategic priorities our was payments doing really about, growing then is continue invest which important. everything Michael is network in

business this a are seeing leave to continue expanding continue sustainable of through. of growth, to right for operating that we margins contributing you're should all We the do those to while the to the opportunities come factors see that deliver like ensure come which the And this factors is message you through of with I'd to line for effectively we're going that The that invest following: long-term in run impact So we to means the top ourselves long-term are creating you terms operating manner that disciplined to growth. on in margins.

Warren Kneeshaw

question, please. Next

Operator

proceed from next line Your the Peller Wolfe Please with question your of Darrin come will with Research. question

Darrin Peller

seeing have in you're Hi. it's been high said rebates look types cross-border that the as are clearly travel. the at now opportunities positioned before right Thanks, you historically guys. I a take think I we of incentives, advantage correlation. And of to on upswing as pass-through you very without When

the you I guess business yield, cause different to be There's this globally. A the type bit more be So case, about on so mean going think of to expect around guys open forward just I relationships that growth big A clear, should of still And in all, first travel. then and even a across been our opportunities the we [ph] Michael be there on pickup in banking of industry you new work that And terms resumption to we we is can and when anything that trying spending net much or that opportunities change. earlier, are for more little through would to cross-border say Michael yield that just mentioned that payments. to strategically,

that all, you players is change so card-based how or payments really does really, at stay expect dominant ecosystem for time? see to over cross-border the And cross-border

Sachin Mehra

how intra-Europe much the fundamentally mean I cross-border will headline But part seeing not which of around corridor guess volumes would changed and not outside because move Michael your take and first from question. you point. on cross-border I'll of following higher the make things I that our much cross-border comes the will the Aaron. then to of I versus revenues. net-net yielding are fundamentally, address intra-Europe lower is know then tell is, anything is profile yielding. I from Thanks, second has are volumes you intra-Europe terms depending as going one changed. other we're in

But associated much there's environment. high nearly which and not cross-border cross-border. have there regard. fundamentally seeing rebates been incentives of always a You as would to the not that lower volume domestic as I been being cross-border. and rebates with talked rebates that indexation about say incentives some we're what's in with change not of in there incentives, There's level

Michael Miebach

is so different at I'd and strategically, where cases. universes say use And what took similar looked Darrin Investor different Day here's at Right. lens we we that

but a found the to with is our ensure way addressed. got card merchants also The we have consumers established PXM with services for associated and very cross-border. world transactions propositions for cross-border specifically well domestically certainly and You industry where are risks these that the

So conversion continuously rates rates brought. a have increased. there's and of the approval value the lot And

of to payment be goods a for for much on cross-border basis. resolved problem a isn't there to So payments

that actively make relevant what cross-border for hold. here our a all participate other we're in forth. payment sense -- with our a in where the cross-border counter-account That's saying so it looking of we us accounts And technology import-export, to whole to volumes We're and and payable. space to happening Now space contribute through can payment solutions where tends flows. our franchise

out from specifically perspective. at focus for expensive the additive That's perspective you Investor opportunity that's for Day the called have target significant all opportunity an and opportunities. growing a Again, market remittances. We on us. a Attractive from

have on We our that It's a remittances buyout together. Transfast the is cross-border reach. all XXX side side HomeSend technology our coming the the of on acquisition, country

we're has network So I think here the inefficient. that multilateral bringing is space idea into what been historically this

So, I look as of the while a to we're at going the power to growth it side continue opportunity cost house.

Warren Kneeshaw

please. question, Next

Operator

next question MoffettNathanson. with the of with Ellis Lisa question. Your come line from your will Please proceed

Lisa Ellis

Brazil. to spotlight I shine you. on LatAm, specifically hoping a Thank was Terrific.

gaining actually customer of you've talk region. are or just a or a a an with of these fraud Just is identity up one where your in bit local network XX% Thank example networks coexist of about lot market peak Can domestic a is supplementals player that, customer a also services? traction. some or to and like like got taking of a a as in Mastercard's how Brazil use you you. potential PIX, of that a But XX% a the volumes Mastercard banking to open like PIX market

Michael Miebach

right. All

let take me that. So

in to of strategically for there all, us market out years. very important So with a first We're well market has banks mention. Brazil the large others on been focused for established Itau and

Brazilian manager this actually after right the country seeing call. I'm So,

much there. Overall, forever. very rise. in it's Brazil been banking thing lot what's drives a it's a going is Later is on focus. with the on payments Buy Now, Pay of innovation. the that real-time happy very Open rise, market on So, We're has in a

So, a PXP further digitization that the And in lot there. in push the introduced the network of Brazil that's Central movement Bank to is market by another been market.

right digitization whole Brazil the great really we're into that. in leaning seeing So, momentum is and

BXB that you flow of after, worried see particularly the our of lot itself for and a and with innovation one that. in so PXP kind is going as we're strategy flows, about flows that's support multi-rail live anything necessarily Brazil of ourselves we of the the but technologies it's to kind paid of of first set and like we to Now What's have a part also flows market PIX not a have some there. that set a is momentum just which is whole point lot that out

easy platform. our which alternative So, great adoption user a technology powering here's that users X.X an as million an already is social network experience on

to So, considering new where the look learn a at card and local market a the we passed market. solutions specific additional chart size I it that's the that very of a beyond with invest flows as for from, market lot we in flows

Sachin Mehra

traditional strong growth. leaning couple fact add we've just Clearly, I'll asked it's but in the One the also growth fintech why that as has seeing on through some that which of partners of that in our a in And about decent a space our been well thoughts of reason of with been macro heavily Brazil. the issuers we've question the environment, it's pretty been you Michael a as Lisa. the combination part manner, come

debit little were tying even Brazil focused and PXM Michael's a to credit of to is make market call both PICCs it and to context BXB said bit Michael in primarily as of side stands. and into has be proliferate equation it a remains around still merchants standpoint the were the see the I'd in us comments smaller actually so side, mainstay credit. on [ph], the primarily it if PICCs from PXP around point be back growth. the for the flows, continue bifurcated which catering And credit -- second to debit we The to tremendous the

Operator

with Tien-Tsin the Your JPMorgan. next Please from line Huang proceed come of will your question question. with

Tien-Tsin Huang

migrating. it Thank Good in from on check card morning. coming out call I and whole trade you. of balance volume wins to wanted and in the and this losses

gaining done? gains. short migrations Thanks. you you and Bank, trying you better are all course stand not mentioned share all especially in West -- Deutsche and sense where in with there a term in I'm when the the is Given know the the ended said just and update, get out share Wells in of to I

Sachin Mehra

Thanks, Tien-Tsin.

of kind Michael relationships expanding talked talked about these we was everything issuers. about on about and our this with in So conversation earlier

the example think relationship is so gaining the share. in an the which and Wells, expanded with about of the market, these for well reality relationship, increasing taking position are situation. as there And place issuers, the there. right? we that's share with we should Wells I puts say takes new That's new relationship kind So with I of are Again, right, have

optimistic XX Capital market So are which it what right? line From NatWest, we're whether and doing Deutsche about how name I our Wells, standpoint, all like a One, very, Santander the is us the holistic Community we there we helping is these is which said, But with of incrementally XX something the at are and very the shared in drive markets GAAP you takes, it's with following bottom the volumes. puts we again, -- and as we're portfolio growth Investor market Day we we've points we are put the across seeing Day, Investor far. are mentioned which us. our of business Community is data really growing translate you seen share And for at the out market all regions share top so

Michael Miebach

Tien-Tsin, by the asking was to just ask you add, it's none with question. going much these I'm news about should thought happy so pass to appreciated. I of very And I it,

Operator

come line question. ISI. Please will David with Evercore your from the question Togut of Next with proceed

David Togut

but go vaccination Europe you very known see do in physical throughout kind rates growth especially active did ex think and going locations? much. see with unpack how words, more this at year, you was of solid by card-not-present geography, especially the this and is Can be reacceleration playing physical Thank later card-not-present bricks-and-mortar of as other or to do consumer, ex out of the you In consumer a comparisons. very the cross-border travel travel QX, against and this quarter April year, into you return throughout up? in the sale the Cross-border of point you, slow US difficult growth e-com

Sachin Mehra

Sure David.

card-not-present The ex is, a I give terms do you're couple travel cross-border of a some That's there ex you of upon see back, travel. touching mouthful. card-not-present cross-border back things card travel. in which So think reality -- travel on are comes as not that

point right? number a volumes, you've take see The a three, And ex-travel. And is fluctuations you cross-border what's get into So what two, environment cross-border an prior Because in consideration. environment, got crypto rates remember, future of Number card-not-present at are continues a card-not-present thinking things of in to is, happening they for few the the the growth kind and day take a the in these are and crypto on recovery is do result into can't an travel following, so, when of environment, consideration, all manner. you through, ex-travel. to going is comps for the the cross-border of spend up point spend they do end factors were you're influenced about there have by rates are right, pace that. prior level last omnichannel consumer the got physical when be. the Number as that well. year, caused card-not-present as to cross-border they out When COVID can in of to at that, come do which year growth spend three number comps they on which levels And factors ex-travel? these card-not-present what elevated was in might one,

our manner where well. We might card-not-present cross-border strength seeing stay be has ready There going which going through takes you're we changed them in our there. that ex-travel something but more and for expect merchants is I out both and as a they've in some in behavior come reasons the think, we're from strength standpoint, strength support offering just consumer manners, to I largely, we're the mentioned, digital puts to forward see all a and omnichannel that whether capabilities through to actually are it's gone

David Togut

Thanks.

Operator

question. of will the from Your Bank. next Deutsche Please with question come with proceed Bryan Keane line

Bryan Keane

morning. Hi. Good

couple a Just of quick clarifications.

guidance revenue Could you for expense going the and to the On year? net to the XXXX second the And level us and points like objectives Thanks in the that. are trying so fourth third recovery XXXX? the what impact the Just quarters XXXX. for you the quarter, revenue to to this cross-border Russia-Ukraine, I clarify much. heard quantify is then, two of question performance second assuming just targets forward help

Sachin Mehra

Sure, Bryan.

first, your question we're I'll assuming. So, and take Russia what on

earning we we're not a result any Russian have issued Russia, operations related which as revenues in to So suspended of cards.

had the relates year, X-K our of rest XXXX. in X% Russia we revenue had we to revenues roughly the an that how for as So mentioned represented put out about it of

in my we've right? assumed remarks, that entirely assuming bit some what to well. in we're implications evolves forward, of a Ukraine the that number uncertainty, an exist again, But of how prepared as not doesn't Point the net that's like I just And X% going in we're the level revenue from little a said standpoint, of are. so, that sure in which is, headwind of And reality as because quarters and Ukraine war there's any two. the

And, an think that's the thoughts. represented our and built way again, of from expenses From you we our kind growth Russia-related standpoint, assumptions operating overall in the kind what expenses. OpEx So some of we expense about of, standpoint, in an it. roughly given X% we've that's

impact have XXXX, our rate we mentioned, down a that we've Russia an growth when from you thoughts shared ex-acquisition basis very to full we down, standpoint. on I have reflect taken OpEx with currency-neutral taken year for our As

Operator

Your Barclays. proceed question. next with line the your come Ramsey question with of Please will from El-Assal

Ramsey El-Assal

my impacts you Good I in a credit for or mean, or model Hi. versus associated us I yields you longer-term any give that could we to was your view post-pandemic of or mix out long-term. do Thank as anything kind longer-term latest the morning. see of the [Indiscernible]. we questions. taking debit if payment different P&Ls you what wondering on consider

Michael Miebach

on Right. Ramsey off me that. start let

as two. seeing the with the engagement been well have structural with two surveys So changes and regular observing transpired we've over are that that we years our that digital mind. consumer on. our notion The customers things last whole number going though Anything couple A of, cash -- consumers' this whole has less number in checks, of changed and is the more one.

go First is, ready to They knock consumers really demand. want pent-up are want they list. bucket there, move out off pandemic. on They to their with the to

back spending increased of lot services. into a there's So

structural in going go it's to out. goods. to years as going balance it's whatever and be said, going It's So to come It's across all a do back balance going works. pickup also only it's the feature just out the around to not that it other have online, to way to Buy Sachin of it's multi-channel. delivered, not services in-store

go will multi-rail basically enable consumers there. right more think strategy comes for and all choices relevant through are choices to down that that I out our

what that's forward. That's see going think the right I positioning. to we're going

period people In granular terms a the that's debit of travel see debit. of back, little a avoid get parts finances. crisis, here. of That if you will We their rewards credit more not kind was There and it, in for coming to credit-oriented on the spend early credit, was particularly over of control want big can around more around a they it. more tailwind the if because

talked the that see to about in and of just new start crypto set You Card. there's space, rewards propositions. whole the Gemini credit rewards the We on a Nexo crypto

on. whole So there's a thing going

the in think going different to these I end, tools. around it's multiplicity be

Operator

question. Your Dolev will of from your Dan with Mizuho. come proceed line question next Please the for

Dan Dolev

there? picture call here? versus just U.S. Thank quarters, look I'm share opportunity your debit, in just few there to last out for If this in competitors. in fundamental more to debit my is U.S. some the at trends very the downward or specific. question versus seeing mean, in debit I and your Again an -- I am credit, over your mix is taking you missing I trend competitor, anything of large there Hi. improve Is

Sachin Mehra

Yes.

So debit the that in obviously Dan, there's fundamentally there impacted which relates put comps. nothing first is to our Growth business. rates are it changing place. as I'll really by out

I you piece. get think that

seeing through previously competitor the in consideration a the is actually started debit we're and that impacting recent comes primarily of is was the U.S., that. probably of you've the you're that which there debit which in think portfolio, and of off metrics go the on got one analysis because I that a rolling our this to in seeing, is obviously, portfolio, detriment which announced, comparative that benefit course year. will getting past which is And the through is into likely that take

some seeing So, that's you're probably of the the divergence. reason

Operator

come next Jeffrey with your Securities. Andrew from Your question Truist with Please will the of proceed line question.

Andrew Jeffrey

see on seems have the I that Good services particular. actually Michael, morning. to deselling Hi. perhaps there little in and just that certainly and Would takes revenues question approaching growth faster taking of the services? have and it's other Ex-acquisition I card expect in value-added growing appreciate growth you Can a is the for the comment value-added kind puts business. bit. a what question. long-term on trajectory

Michael Miebach

questions. excellent Andrew,

is on analytics drives work for and people digital these the digital It's we cyber key As all us. margin trend comes our are structural data – and analytics More the focus It's way. to data of side. that. services growth kept differentiator. businesses know all increase business. More one having online by for data, And back hand solutions love you safe. the here. more It a that the on a inside more It's solutions. insights to new This world be on

here. fundamentally are there sound So trends

that and If you unpacking out is the laid simply do up timing. quarter you this just that you the have numbers just pick

to of We nothing are be there's growth anything expecting that changing business. our rates our said there's – the on

continue. will that So

ahead engaged looked guidance teams services growth. Sachin fully we Our as a are strong gave, in we the that and assume

Sachin Mehra

you're standpoint might which you in which take Services and on – And actually growth. for to and that markets I'll a models as strong to well color we forward Russia in. one you this your had factor into important add fact thinking want about Ukraine was a few revenue little a talk are that the Russia more because penetrated the it's going things just there from bit just of to about think When Russia revenues, some I relates consideration

lost about revenues think ensuing the quarters. will in to salient other you Because keep regional of higher about size and think I on you're was where in has There's lose cross-border these out pieces through the penetration. important different to want as issuing the line as Also I of And think contactless Again am in the kind so those in I and will as of get all aspects, sharing across number Russia a kind think going-forward cross-border on as you mentioned other remittances Yes market. this Russia to yielding disbursements things about the model play of different average strong market. degree revenues mostly future of these Why mind of are and And That's into the think was quarters. impact shared as impacted all comps various of starts you? issuing. Russia transactions. Russia-related a items. ticket you kind we've the metrics fast-growing about coming point with basis. we volumes you going no the line It earlier. a which high one. services revenue items you Few see come impacts across related into

Operator

with question of come proceed your line Please will Mihalos next Your from with the George question. Cowen.

George Mihalos

to Great. to a benefit being Good Sachin first guys. into time about morning Can – that quarter you I the looking currency volatile in is isolate our out that sort how benefit wanted quarter. next and my was you I taking weeks called thanks XQ? ask Just is volatility it's what which question for three a XQ? you obviously But know are thinking still of results. into

Sachin Mehra

Yes.

high of I but QX. things because kind volatility forth those hard this of and to in mean say. we volatility exchange." standpoint a So holistic knew George, really our unusually assumptions is doing is if at So taken foreign basis for the on our for be out I Michael the end me where foreign going best high a the on job basis we've the forward unusually "Sachin you numbers of standpoint is was point volatility from where day Unusually from go business exchange what are thoughts a reality QX back there one hard help is a going high going it jokes I what the FX is year us. from outlook predict because don't full to you had guess I you called about forward share was net be. revenue. a going these typically volatility talk as forward on our does with mean The this wouldn't with basis volatility. and to QX a outlook Very the

is The other since to has cross-border volumes to with back combined impact. thing of high unusually it's more that keep come volumes much related in mind volatility an that to for as

Warren Kneeshaw

time we think I Jameria, question. have one for more

Operator

Okay.

come will question final of of the your Kupferberg with questions. America. with proceed Our from Please Jason line Bank

Jason Kupferberg

guys. Thanks

in just were expectation of quarter to travel so one, you for relative terms quick to by end levels, a XXX% your of Just the year. at last be expecting cross-border this XXXX

in at April. already XXX% You're

on assumption So what's your updated that?

Sachin Mehra

numbers. and I've of that Jason, XXXX is, mentioned terms trends consumer our compared or of our around the spending trend we're not you end for was spending into to the trajectory how in specific consumer assuming as with quarter guidance looks that built improving revenue second we in it's as the combination year. what the The We've place. I takes a the thoughts of factored number shared in all vis-à-vis what expectations forward. go the improving sharing that We're in like

Jason Kupferberg

directional for get just the year? and incentives rebates Can we the a rest of

Sachin Mehra

have of on following mentioned I think is you deals. which rich the pipeline is, to and incentives rebates So a we

you cross-border you of of execute incentives heard in amounts the of And point as through from this the some we we basis. of business continue in you of terms agreement lower not terms benefit benefit come make to customer the incentive expect that to rebate onetime which recently. We in and QX of had on of through had that going-forward to relating the our benefit improving play that. on should the to wins which trends on last non-renewal I'll is, Obviously, Russian Michael, a impacting get

How on of what cross-border we you a So deals of be what that, into going play? going is to is those net-net of be. dependent deals lot to new recovery I the would And tell are? timing this into the put

Jason Kupferberg

Thank you.

Warren Kneeshaw

Michael? Sachin. Thanks

Michael Miebach

All right.

as for for support always. questions, you the for insightful company. your thanks Thank questions So

me, Omicron for thinking days then Europe. later that in going of and few an get here we're thought we're we a a invasion out Just to have

extend marathon. quarter. that, see much. teams, you the it want world So in to be Mastercard Thank to our Bye-bye. thanks with for And the you And next so around to just everybody never-ending team. a continues it's the I we'll

Operator

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

You may disconnect. now

Mastercard (MA) 28 Apr 222022 Q1 Earnings call transcript