Mastercard Incorporated

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2020 MasterCard, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Warren Misha, Head of Investor Relations. Thank you. Please go ahead, sir.

Thank you, Casey, and good morning, everyone. And thank you for joining us for our third quarter 2020 earnings call. We hope you are all safe and sound. With me today are Audrey Banga, our Chief Executive Officer, Michael Meebok, our President, and Sachin Mehra, our Chief Financial Officer. Following comments from Ajay, Michael, and Sachin, the operator will announce your opportunity to get into the queue for the Q&A session. It is only then that the queue will open for questions. You can access our earnings release, supplemental performance data, and the slide deck that accompanied this call in the investor relations section of our website, MasterCard.com. Additionally, the release was furnished with the SEC earlier this morning. Our comments today regarding our financial results will be on a non-GAAP currency neutral basis unless otherwise noted. Both the release and the slide deck include reconciliations of non-GAAP measures to GAAP reported amounts. Finally, to set forth in more detail on our earnings release, I would like to remind everyone that today's call will include forward-looking statements regarding MasterCard's future performance. Actual performance could differ materially from these forward-looking statements. future performance are summarized at the end of our earnings release and in our recent SEC filings. A replay of this call will be posted on our website. With that, I will now turn the call over to our Chief Executive Officer, Ajay Banga.

Thank you, Warren. Good morning, everybody. We are now a few quarters into the pandemic, and while individuals and businesses and society at large continue to face many challenges, we are also seeing some positive trends. both in terms of the trajectory of spending and the acceleration of digital payments that we are helping enable. For example, our spending pulse estimates for quarter three show U.S. retail sales up 1.8% versus a year ago X auto, X gas. We're also seeing positive numbers in countries like the United Kingdom. Looking at the trends, volumes improved throughout the third quarter. In fact, if you exclude travel and entertainment, which has been particularly hard hit, our switched volume growth rates in September was similar to what we saw before the pandemic in Q4 of 2019. Using our four-phase framework, we have seen markets go through the containment and stabilization phases, and now we believe that most markets are in the normalization phase domestically with some approaching growth. And so consistent with this, we have seen our revenue going in the right direction this quarter, as year-over-year currency neutral growth was three percentage points better than last quarter, and the domestic spending trends so far in October continue to remain steady. Now, we've seen some improvement in domestic travel in the quarter, including spending in categories such as lodging and restaurants. Cross-border travel, however, remains constrained, And while we have seen some improvement in travel within the EU during the quarter, cross-border travel outside the EU has shown only limited recovery. We believe travel will improve as consumer confidence recovers as a result of improved testing and safety protocols being put in place, medical advances occurring, and as border restrictions are lifted and there is increased international coordination of travel cross-corridors. When cross-border travel does improve, we will be very well positioned to capitalize on that recovery. So overall, we see signs of improvement. But we're not out of the woods yet. As we are seeing in places like Europe, restrictions being put back in place. As I said in the past, progress through the phases may not be linear, it's going to take some time, and it will be positively impacted by the broad availability of successful therapeutics and vaccines. During this time, we remain focused on the things we can control, continue to execute against our strategy, invest in our business for the longer term, and manage our expenses in a disciplined way. Our digital technologies help us drive the secular shift to electronic forms of payment. They support our broad range of customers, banks, fintechs, new banks, and merchants. We are growing our core payment capabilities in credit, debit, prepaid, and commercial with new and renewed deals. Our services, which are helping our customers and consumers adapt to the changing environment, are continuing to grow well, and they provide meaningful differentiation and revenue diversification. And our multi-layered capabilities are providing choice to customers and consumers by addressing a wide range of payment flows. So with that, let me turn the call over to Michael. Thanks, Ajay.