A：The highlights of MasterCard's Q1 2026 earnings include a 12% growth in net revenue and a 15% increase in net income year over year. The economic foundation remains supportive with healthy consumer and business spending, although geopolitical tensions have impacted cross-order travel. The company's strong execution and resilient network contributed to these results.

A：MasterCard's network supports the digital economy by providing unparalleled global reach with hundreds of millions of acceptance locations and digital assets across over 50 currencies. The network's scale drives data availability, security, and faster transaction settlements, and it also includes core card network upgrades, best-in-class technology, and innovative services and solutions that leverage data from the network and AI.

A：MasterCard has introduced several recent key innovations, including Gentes commerce and stablecoins. They are engaged in shaping the future of gente commerce with major partners like Google, Microsoft, and OpenAI. Additionally, they have launched Verifiable Intent, a tamper-resistant record of user authorization for AI agents. MasterCard has also partnered with Cross Mint to enable secure transactions for AI agents, with plans to expand to the open cloud platform.

A：MasterCard is expanding its consumer payment services through partnerships and new offerings. In Q1, they announced an expanded partnership with Westpac in Australia and a new deal with CIB in Egypt, which includes the conversion of an affluent portfolio and the issuance of over 5 million new MasterCards. Additionally, they are launching new World Legend card offerings in various regions, including North America, Latin America, and Asia, reinforcing the importance of offering payment choice.

A：MasterCard has made progress in commercial and new payment flows by scaling their one credential solution and issuing the US Amazon Small Business Coe Brandin Card, which will transition to MasterCard. The company is focusing on leveraging their strengths and continuing to lead in segments such as small business, where they have a substantial presence in the US GDP.

A：MasterCard has added multiple new U.S. partners in the segment, including FLEXX, which enables card-based and invoice payments for wholesale food distributors. The company is extending its capabilities outside of the U.S., securing a digital fleet and in-car payment system operator in Europe.

A：The recent agreements with high note in the U.S. Travel Services, Juniper in Europe, and Bola in Brazil further secure commercial travel as an area of strength for MasterCard.

A：Demand remains high for value-added services and solutions, and MasterCard continues to drive strong growth using curated data to deliver differentiated products alongside its payment network. The company announced a new foundational generative AI model that leverages Nvidia capabilities and vast datasets to anticipate behaviors and predict cardholder spending.

A：MasterCard has modernized dispute resolution with unique network tools powered by Esska that help connect issuers and merchants post-transaction. Ethical products grew around 25% year over year, with offerings like Checkout Do Com embedding ethical alerts into the global digital experience and enabling direct merchant enrollment in pre-charged back dispute resolutions.

A：MasterCard has acquired Recorded Future in 2024 to enhance its cybersecurity measures, and it has launched MasterCard Threat Intelligence, integrating capabilities from both companies. More than 500 customers are already using the product, which has helped partners take down malicious domains impacting thousands of eCommerce websites.

A：MasterCard powers various use cases in open finance, including account opening, smarter lending, and simple account-to-account payments for small businesses. The company continues to see traction in healthcare, with Optum Financial expanding its services. MasterCard Open Finance is used by Webster Bank for identity verification and account linking, making onboarding increasingly seamless for its HSA members.

A：MasterCard's consulting and marketing services have grown, powered by payments expertise and unique data. These services enable highly targeted in-driver actions that generate measurable ROI. The company has seen a high customer return rate, with an increase in service usage by more than 20% year over year.

A：MasterCard's first quarter financial performance included net revenue up 12%, operating expenses up 9%, and operating income up 13%. Net income and EPS increased 15% and 18%, respectively, with strong operating income growth. The company repurchased 4 billion worth of stock, with an additional 1.7 billion through April 27, 2026, and accelerated its share buybacks.

A：In the first quarter, worldwide gross dollar volume (GDP) increased by 7% year over year in the U.S. with 4% GDP growth and credit growth of 8%. Excluding the impact from the migration of the Capital One debit portfolio, U.S. debit GDP growth would have been 7%. Crossed theordor volume increased 13% globally, reflecting continued growth in both travel and non-travel related cross-border activities.

A：Switch transactions grew 9% year over year, and contactless penetration was at 78% of all in-person switched purchase transactions, up five percentage points since the same period last year. Additionally, car growth was 5%, with 3.7 billion MasterCard and Maestro branded cards issued.

A：Payment network net revenue increased 8% driven by domestic and cross-border transaction and volume growth. The revenue also includes growth in rebates and incentives, value-added services and solutions.

A：The timing of holidays, specifically Ramadan and Easter, impacted the growth rates of MasterCard's operating metrics in the first quarter and the first four weeks of April. March saw the benefits from the timing, while February and April experienced a negative impact.

A：Overall cross-border metrics showed a 13% growth in the first quarter, with cross-border card not present X travel growing at 18%.

A：The company's base case assumes underlying consumer spending remains healthy outside of the impact of the conflict in the Middle East, with the conflict assumed to end in Q2. The impact from the conflict is expected to be largest in Q2 and to progressively recover through the second half of the year.

A：For Q2, net revenue growth is expected to be at the low end of the low double digits range on a currency-neutral basis, excluding inorganic activity. For the full year, net revenue growth is expected to be at the high end of a low double digits range on a currency-neutral basis, excluding inorganic activity.

A：Q2 operating expense growth is expected to be at the low end of the low double digits range versus a year ago, again on a currency-neutral basis, excluding inorganic activity.

A：The higher sequential expense in Q2 is primarily driven by lower cash balances and higher debt levels in the second quarter, seasonally lower cash balances, an accelerated pace of share repurchases, and a one-time unfavorable impact from a disposition.

A：The expected non-GAAP tax rate is in the range of 20% to 21% for both Q2 and the full year.

A：The strategy has evolved to focus more on services that can be applied to these payments, particularly in light of changing franchise rules in the payments space. Cybersecurity is particularly in focus due to rising account-based fraud and scams. The company is continuing to grow in existing geographies like the U.S., the U.K., China, and the Philippines, where the business operates at scale and profitability.

A：The specific impact of the conflict in the Middle East is assumed to be most pronounced in cross-border travel, which is expected to be most impacted in the second quarter. There is an assumption of a gradual recovery in cross-border travel in Q3 and Q4 if the conflict ends in Q2. The offset to this impact is the company's belief that the full year guidance remains unchanged on a currency-neutral basis.

A：The primary driver of the increase in the full year guide is a change in FX assumptions for the year.

A：The impact of the conflict has been an offsetting factor, particularly in Q2, which had the highest levels of FX volatility creating significant headwinds.

A：In Q2, the highest levels of FX volatility create the biggest headwind, with some headwind in Q3 but less than in Q2. Q4 had more normalized levels of FX volatility.

A：The value added services and solutions segment, which represents roughly 40% of the company's revenues, delivered 18% currency-neutral growth in the first quarter. There is strong demand for these capabilities and the company plans to continue focusing on execution based on the provided assumptions and guidance.

A：The company has been using insights from data to understand shifting spending patterns and has a website up for customers to view these insights. This allows the company to proactively engage and drive full value for customers.

A：Portfolio shifts are having a lasting impact on the company's performance, with varying migration schedules for different portfolios, particularly impacting the travel industry due to its higher exposure to portfolios with more travel-related activity.

A：The deceleration in switch transaction growth is primarily due to the mix of the portfolio, specifically the geographic mix and average ticket size variations. Exclusion of Russia, a low average ticket size market, significantly impacted growth rates.

A：The company is focused on driving greater switch transaction growth, which generates revenue and provides data for value-added services. Despite having one of the largest proportions of switch transactions (now north of 70%), the company remains focused on this area for its revenue generation and data delivery capabilities.

A：The company is benefiting from the shift towards domestic payment systems by leveraging its digital capabilities, which are difficult to replicate and scale. This strategy is winning volumes and providing security and safety benefits to countries looking to establish their own payment systems.

A：The war is an external factor that is outside of the company's control and has resulted in a decrease in growth rate in Q2. The company is working with customers to find opportunities to support them during this time. In impacted regions like GCC and Israel, the company experiences roughly a 6% reduction in cross-border volumes.

A：The company believes that stablecoins and tokenized money will be an important part of the financial ecosystem and occupy a meaningful part of money movement in the future. Use cases include B2B global payouts and funding personal wallets, among others.

A：The company has received regulatory clarity which is not holding them back, and they are moving forward with healthy growth in crypto, including stablecoins. The timing of certain events is considered an unlock moment that will bring momentum as the world grows at a higher speed. The future will involve more coins and non-pro-deniable denominated assets, emphasizing the need for interoperability, trust, licensing, and meeting clients' needs. BVN K is seen as a leader in this space.

A：BVN K is positioned to drive interoperability and trust in the digital assets space, which includes stablecoins and tokenized bank deposits. The significance of BVN K is underlined by customer conversations where there is a high level of interest and a desire to collaborate on how they can work together. The company is leveraging its technology to facilitate transactions and provide services that are comparable to regular transactions.

A：The volume for MasterCard's agent pay is still in the early stages, and there have been some surprises regarding actual activity and demand. The activity is closely related to commerce-oriented protocols and the need to facilitate transactions and deliver familiar experiences to users. The company has faced challenges such as disputes and the need for verifiable intent, which has been addressed with Google to become a standard. The urgency is to bring trust and establish standards, with the potential for new use cases to spread and increase transaction opportunities, especially in the B2B space.

A：The decrease in cross-border travel growth is primarily driven by three factors: conflict, portfolio shifts, and the timing of Easter and Ramadan. Conflict is not considered the biggest factor; rather, it is one of the key contributors. Portfolio shifts and the specific timing of religious holidays are also significant contributors. The company notes that conflict is outside of their control and does not expect it to be a long-term challenge to the cross-border value proposition.

A：MasterCard has a clear approach to portfolio wins and losses, aiming to win the right kinds of portfolios. They maintain discipline in this area, with more wins being reported and occasionally some moving away from them, which is part of the portfolio shift dynamics. Portfolio shifts do impact the company's performance, but they are managed within the strategy.

A：There is an increasing focus on AI in the context of fraud detection, with AI not being a new concept but rather accelerating in importance. MasterCard's acquisition of Recorded Future, which specializes in general cybersecurity for smaller businesses, expands their fraud management capabilities to a multi-player strategy. This acquisition is especially relevant in a world where companies struggle to defend against all threat vectors. MasterCard's aim is to provide reliable information to customers on their biggest risks and where they need to invest. With the combination of MasterCard data and Recorded Future data, the company is well-positioned to offer insights in an era of geopolitical tensions and asymmetrical warfare.

A：The integration of Recorded Future into MasterCard's offerings has been synergistic, with a significant demand for their products such as MasterCard threat intelligence, malware intelligence, and autonomous threat operations. The acquisition was closed in December 2024, and it has already been running successfully. The company expects security solutions to be a continued significant growth driver, as there is a strong and immediate need for these services in the market.

A：The competitive intensity around deals has not changed dramatically. The company's stance is to win deals and the current mindset has been consistent for years, focusing on transactions and capitalizing on secular opportunities to drive growth.

A：The company assesses whether it has relevant market share and is well-positioned in the market. They also consider whether growing their business in a new geography aligns with their strategy and make these kinds of judgments as part of their growth strategy.

A：MasterCard sees stablecoins as a significant net new growth opportunity and aims to deepen its capabilities through acquisitions to facilitate value exchanges over digital assets. The company anticipates driving interoperability and building new services which will increase value for MasterCard going forward.

A：The economic impact of stablecoins for MasterCard is significant and represents a net new growth opportunity. The company plans to generate revenue through a basis points on volume revenue model, which is part of the broader digital asset market that MasterCard does not currently participate in.

A：The key drivers of the increase in transaction processing costs are the value delivered to the market and planned pricing, which are already contemplated in the guidance shared. The company plans to deliver specific pricing for the value planned and does not expect to give specific numbers for Q3 and Q4, but assures that the guidance already includes the anticipated value delivery.

A：To drive future growth, MasterCard is focusing on several categories of acceptance including geographic penetration, domestic schemes, closed-loop transactions, underpenetrated verticals, and driving VCN acceptance. These strategies help in creating new acceptance points and growing the network.