Mastercard Incorporated

Please only press star 1 once to queue up for a question, as pressing star 1 multiple times may affect your position in the queue. If you would like to withdraw your question, press star 1 again. Thank you. Mr. Devencore, Head of Investor Relations, you may begin your conference.

Thank you, Audra. Good morning, everyone, and thank you for joining us for our first quarter 2025 earnings call. With me today are Michael Meebok, our Chief Executive Officer, and Sachin Mehra, our Chief Financial Officer. Following comments from 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, as set forth in more detail in 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. Information about the factors that could affect 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 for 30 days. With that, I will now turn the call over to our Chief Executive Officer, Michael Meba.

Thank you, Devin. Good morning, everyone. Before I dive into the specifics from the quarter, a few themes stand out for me. First, we delivered a fantastic first quarter. Net revenues were up 17% and adjusted net income up 13% versus a year ago, as always on a non-GAAP currency neutral basis. Second, we are successfully executing against the significant secular opportunity in payments. It's a core part of our growth algorithm and an opportunity in any economic environment. Third, we are at the forefront of digital transformation, delivering a diverse set of solutions that address the evolving needs of our customers, capabilities that make payments simple, smart, and more secure, and services that go beyond our rails and beyond payments. Now let's get into the details. We're operating in an uncertain environment. Consumer and business sentiment has weakened, primarily due to concerns surrounding the impact from tariffs and geopolitical tensions. On the other hand, so far this year, the fundamentals that support consumer spending have been solid, and our drivers are generally stable. No matter what, it remains clear that we have intentionally embedded resiliency. We have a well-diversified business, both from a geographic and product perspective, as well as across a wide range of discretionary and non-discretionary spend categories. We closely manage our expenses and have levers to pull if needed. And we remain focused on executing against our short, medium, and long-term objectives. There's a substantial opportunity for us to drive sustainable growth across consumer payments, commercial new payment flows, and value-added services and solutions. That's what I will focus on today. Starting with consumer payments. Our innovations, including contactless capabilities and tokenization, have become a foundation for payments in today's digital economy. Today, 73% of all in-person switch transactions are contactless, and approximately 35% of all our switch transactions are tokenized. These technologies will continue to play an important role as we move forward into the next phase of digital commerce, such as agentic AI. We announced MasterCard AgentPay that leverages our agentic tokens, as well as franchise rules, fraud, and cybersecurity solutions. Combined, these will help partners like Microsoft facilitate safe, frictionless, and programmable transactions across AI platforms. We will also work with companies like OpenAI to deliver smarter, more secure, and more personalized agentic payments. The launch of AgentPay is an important step in redefining commerce in the AI era. We are thrilled with these collaborations as we work together to scale and build trust in agentic commerce. We also continue to advance crypto payments with an end-to-end approach. We're collaborating with cryptocurrency platforms to allow consumers to spend their cryptocurrencies, including stablecoins, at more than 150 million MasterCard acceptance locations worldwide. Kraken, OKEx, and Bleep are among our newest card issuance partners, helping to connect the crypto economy to everyday spending. And behind the scenes, we have enabled stablecoin settlement on the MasterCard network itself. We're working with FinTech Acquire a new way to enable the option to settle payments and stable coins for their merchants. And we help make these payments secure with CryptoSecure, now actively monitoring risks for hundreds of issuers globally. This is in addition to our work on blockchain technology to unlock faster and more transparent cross-border B2B payments with our multi-token network, which we discussed last quarter. Our consumer payment technologies also enable us to further capture the significant secular opportunity and expand into new markets. China, for example. As we approach the one-year anniversary of the first locally switched transaction, we launched domestic on-soil tokenization capabilities. These were developed through our joint venture to make online transactions more safe and secure. Additionally, we're working to scale commercial as well as consumer payments. Over the last year, we have launched 10 new small business programs. We also continue to win and renew partnerships around the globe to drive growth in consumer payments. CIMB Niaga Indonesia's second largest private bank has chosen to transition their international branded consumer card portfolio to MasterCard. We have embarked on this long-term partnership to help enhance customer acquisition and experiences through analytics and technology. We're also expanding our partnership with one of the leading regional financial groups in Latin America, Grupo Pro America, across eight countries. In addition to incremental card issuance, they will utilize our consulting and data analytic capabilities to drive growth. Such strategic partnership also play an important role unlocking cash and new consumers. There's tremendous secular opportunity in Africa. One way we unlock it is by partnering with mobile network operators across the continent. For example, we're partnering with MTN Mobile Money in Uganda to give their subscribers the option to pay using card credentials without the need for a physical card or a bank account. And in the UAE, we're partnering with Al Etihad Payments to launch co-batch debit and prepaid cards with the domestic scheme Jawan. This gives us access to a new set of consumers and flows in this large, high-growth market. Travel remains an important vertical and one where we are seeing continued success. Our acceptance footprint and robust service offerings are key to capturing this category of spend. This quarter, we launched a new debit co-brand card with Windham Rewards. And we renewed our credit co-brand partnership with Spirit Airlines with an additional agreement to launch a new debit program with them in the future. Putting it all together, we are partnering in creative ways to win share and capture the secular shift. Our decades-long innovation in payments has placed us at the forefront of today's digital commerce. And now we're positioned to lead tomorrow's advancements, such as agentic AI and crypto, as I mentioned earlier. Commercial new payment flows represent another large addressable market opportunity. This quarter, we launched two commercial point-of-sale solutions. Each combine our product capabilities in a modular way to meet the specific needs of varied businesses. Our business builder product combines commercial cards and tools to help entrepreneurial clients launch and scale their ventures. B1 Bank will be among the first issuers to offer the program. developed Mid-Market Accelerator to address the critical needs of the largest and fastest-growing commercial segment, mid-market. It combines our digital payment technology rewards and security solutions with custom-selected features like cash flow and expense management tools. We're working with citizens to bring this to market in the United States with plans to scale globally. Beyond commercial point-of-sale solutions, we are working to unlock the substantial invoice payment opportunity by enhancing our capabilities. We entered into a new partnership with CorePay to enhance our current corporate cross-border payment solutions with industry-leading currency risk management and integrated large ticket capabilities. This will give our financial institution partners a simple connection to a comprehensive suite of cross-border payment offerings regardless of ticket size and geography. At the same time, the partnership expands the distribution reach of MasterCard Move. And this goes to a broader set of small and mid-sized businesses, including the existing CorePay customers. Finally, we extended our agreement for CorePay to exclusively offer MasterCard virtual card programs to its customers. Furthermore, we're extending our leadership in virtual cards by making it easier for businesses to access and deploy. We launched B2B Rate Manager, to equip Mastercard virtual card issuers with a faster and more scalable way to implement and use flexible interchange rates. We're also streamlining the onboarding process for issuers to deliver embedded virtual card technology into partner platforms that end corporates use every day, such as HRS and Cvent. To further scale, we continue to embed our virtual card technology into widely used platforms. ERP software company Odoo, in collaboration with Stripe, will exclusively issue MasterCard corporate cards integrated into Odoo's expense module, available for their users in more than 20 countries. We're also seeing strong demand for our MasterCard move capabilities, with transaction growth up more than 35% year-over-year this quarter. This solution has extensive reach and broad applicability to meet the ever-growing needs of customers and businesses. Let's look at some of the most interesting use cases here. In the person-to-person space, we now facilitate domestic transfers by simply tapping your phone, partnering with Samsung, to power their new wallet P2P offering. And we support near real-time person-to-person cross-border remittances, adding partners like MoneyGram, Instapay Technologies, and Curfax this quarter. MasterCard Move also enables disbursements like gig economy wage payouts to offer more flexibility and speed to businesses and individuals. Checkout.com is using MasterCard Move to help enable disbursement and payment use cases for the gig economy as well as for insurance and healthcare merchants. And our technology can also speed up purchase return payments within minutes rather than days or weeks, which is clearly something we can all benefit from. WorldPay is now using this with multiple UK merchants to deliver faster refunds. Across commercial point of sale, invoice payments, and MasterCard move, we are expanding across use cases while making it easier and more attractive to use our solutions. The third pillar of our strategy is services and solutions. We've made targeted investments in diversified solutions in high-growth areas. As we said at the Investor Day last year, approximately 85 percent of our value-added services and solutions revenues are recurring in nature, providing a stable baseline for growth. And we are well positioned for future growth as we continue to scale by further penetrating existing customers and targeting new buying centers and new services. We are leveraging one-to-many distribution with global technology partners who can embed our services as part of their value proposition. Galileo will enable ethical alerts for most of their card portfolios and integrate our open banking-powered capabilities onto their platform. Global cybersecurity company Viking Cloud will distribute our risk scoring and cybersecurity remediation capabilities to further enable their small business clients to protect against cybercrime. And financial crime prevention company Fitze is extending their use of Mastercard's consumer fraud risk solution It's already live in the UK with 14 major banks, and this partnership streamlines our ability to scale account-to-account fraud solutions to new markets globally. To further penetrate existing customers, we bring differentiated solutions that drive impact throughout their value chain. This can be across consumer onboarding, activation, and usage, all the while making payments safe and secure. Our services help balance a positive, frictionless consumer onboarding experience with ensuring consumers are who they say they are. Tangerine Bank in Canada is using our account opening identity solutions to do just that. In bringing our identity attributes and open banking solutions together, we have helped Experience enhance their digital checking account offerings within Experience Smart Money. Once those customers are onboarded, our assets can support their ongoing engagement and loyalty, resulting in improved customer satisfaction. For example, we help power Sam's Club's loyalty rewards program. And we're working with First Abu Dhabi Bank to develop an AI-powered concierge integrated into the bank's MasterCard offers platform. This innovative solution will help customers discover and access card offers and benefits in a contextual manner. Additionally, our business and market insight services help our customers with portfolio optimizations. We've combined our consulting expertise, analytics, insights to help customers like Intesa Sao Paulo to optimize the program performance. We also provide tools to protect our customers and the ecosystem more broadly. Last year, we enhanced our AI-powered decision intelligence to supercharge our fraud scoring and detection rates, and it's working, detecting more than 40% more fraud versus quarter one last year. On the cybersecurity front, Recorded Future just unveiled malware intelligence. It's a new capability enabling proactive threat prevention for any business using real-time AI-powered intelligence insights. These are just two examples how we deploy AI. Taking a step back, AI is deeply ingrained in our business. We have access to an enormous amount of data And this uniquely positions us to enhance our AI's performance, resulting in greater accuracy and reliability. And we're deploying AI to enable many solutions in market today. In fact, in 2024, AI enabled approximately one in three of our products within value-added services and solutions. Simply put, our services are focused on areas that truly matter to our customers, both in payments and beyond. And we're intentionally investing in areas like AI-powered threat intelligence that are ripe with opportunities for growth. Today, I've shared numerous wins, new partnerships, and new product innovations. The execution is evident, and our momentum continues. So I want to wrap up with some key takeaways for you. We delivered another quarter of very strong results. We're monitoring the macro environment and prepared to adjust as needed. We have a broad set of solutions that drive value for our customers. We have a strong, resilient, and diversified business model. And most importantly, we are focused on delivering our strategy and growth for the long term. Sachin, over to you.