Mastercard Incorporated (MA) Earnings Call Transcript & Summary

We're excited to have Mastercard and CFO, Sachin Mehra, who will go through our fireside chat questions. I'm Bryan Keane. I head up the U.S. research side for fintech here at Citi and we're excited to have you Sachin. So thanks for being here.

Thanks for having me, Bryan.

I guess, Given the fact that Mastercard sees so much of volume and see so much a consumer, we have to start there. Can you just share with us what you're seeing in terms of the macro environment any recent consumer spending trends that you're seeing?

Sure. So first, good morning, everyone, and thank you for being here. Look, to your question on macro trends, as we mentioned in our last earnings call, we continue to see pretty healthy trends as it relates to both consumer spending as well as business spending. And you can see that in the key metrics we've shared with you as part of our Q3 earnings call, where all of our key metrics are growing at a healthy clip with a consistent trend. And you saw that through the third quarter. You saw that through the first four weeks of October that we actually shared some metrics when adjusted for the rolloff of the Capital One debit portfolio. And I guess what I'll say is as I look at the data for the first two weeks of November, those trends very much continue to be intact. So the consumer is still healthy. We continue to see good spending taking place as it relates to our business overall. And then when I think about the consumer, and I think about affluent versus mass, just like we mentioned on the earnings call, both affluent and mass show pretty consistent and good trends as it relates to how they're spending. So all in all, I would say good and healthy consumer spending trends. Obviously, we're tracking very closely as it relates to what's going on from a geopolitical standpoint, what's going on from a trade policy standpoint, what's going on of overall macroeconomic standpoint, and we'll continue to be vigilant, but so far, so good.

There's extra concern and some data that's showing up that lower demographic may be showing some signs of weakness. Are you seeing any of that?

No, it's just like I said, right? Like I said, the data we saw through Q3 as well as the first four weeks of October shows us -- and again, I'll caveat and say, we don't get to see income levels for consumers, right? What we get to see is what kind of products they're using and what kind of average spend they've got on the product. And when we compare the trends from a trend standpoint, they're holding up pretty well, both across affluent and mass market.

Got it. Let's talk about some of the hot trends. Obviously, agentic commerce is generating a few headlines and stablecoins, of course. So Mastercard has been active on the agentic commerce front with the launch of Agent Pay. Can you just describe for us Agent Pay and what your strategy is and differentiation for Mastercard?

Sure. So look, I mean, we're excited about the work we are doing in the agentic space, particularly as it relates to Agent Pay. If you just step back and you think about where the world is going from a commerce standpoint, right, there used to be an environment in which many, many years ago that there was primarily face-to-face transactions, which took place. That still exists, but then there was a migration of volume which took place to the e-commerce environment, where there was actual commerce occurring by individuals in that e-commerce environment. And the theory now is that we will go into an environment where individuals will delegate authority to agents to close that commerce transaction. We believe we have a very important role to play there, and that's about establishing trust in the ecosystem. And establishing trust means making sure that the consumers feel like they have a safe and secure environment to pay in that the merchants feel like it's legitimate transactions which are coming down the pike. And everyone in the ecosystem feels like we can bring the power of the network to these agentic payments as it happens. So more specifically, the role we play would be one of basically creating registration for agents to make sure that there's legitimacy to the agents which are out there. It's around authenticating consumers, having given authority for the purchase transaction to take place. It's about bringing our fraud capabilities and our fraud management environment, which we've been investing very heavily in as a company to those agentic payments to provide that level of trust, which we need to provide. And last but not the least, it is about bringing our franchise rules which is around dispute resolution, which is around making sure that consumers get the same protections in an agentive payment environment as they do in an e-commerce environment today. And we're doing all of this while working with ecosystem partners which means working with our issuing banks, working with the agent creators, working with the merchant community who cares deeply about ensuring that the agents which are out there or will likely be out there shopping are legit agents as opposed to some rogue bots, which are out there shopping on their websites. So there's a very important part we're going to play in terms of establishing trust. A few other thoughts on this. Number one is we are already live with Agent Pay with a few issuers here in the U.S. We've already conducted our first Agent Pay transaction. We have been on record stating that we will be live with all our U.S. issuers yet this year on a agentic payments. In other words, making them ready to go from agentic payment standpoint, and the plan is to roll out across the rest of the globe in 2026 as part of this journey. I oftentimes get asked the question as it relates to agentic payments as to, "Well, is this the new thing of the future?" Well, the reality is consumers will ultimately decide whether they want to delegate authority to agents to actually crystalize -- close out that commerce transaction. What's really important for us is to make that choice available to consumers. That's how we have always been a company which leans into trends, and we want to be the payment rails over which -- if consumers elect to go there, then we want to be the payment rails that they use to go down that path. To your point about what's the opportunity for Mastercard and how we can kind of differentiate ourselves. Look, we've been investing for decades now on a full range of assets across our services portfolio. Everything from our safety and security capabilities, our tokenization capabilities, which is a very important part of establishing trust in the Agent Pay experience. Our loyalty platforms, we believe we can bring some real value to agentic payments by bringing those services to bear as part of the journey of the rollout. We also view agentic payments as potentially being incremental from a transaction standpoint. And just to bring this home, the way we think about it is, today, as an individual, when you go into an e-commerce website to do shopping, you tend -- let's say I'm going to buy a pair of shoes. I go, I buy a pair of shoes, I oftentimes get offered a whole bunch of other stuff that the merchant wants to sell me. And I might decide, "Okay, you know what, I'm going to also buy socks and I'm going to buy a hat, and I'm going to buy a T-shirt". Well, guess what, in the agenetic payment world, what likely will happen is the agent will buy the shoes, where the shoes are best served to be bought from, we'll buy the hat from another merchant where they're best served to be bought from. So what that does is what moves away is what today might be one transaction for $200, which is taking place at an e-commerce website will likely transition to that same $200 being spent over multiple transactions. And as you know, our revenue model, we make basis points in volume, and we make sense for transaction. So more the number of transactions, the greater the opportunity is there, in addition to being able to deliver more services. So we're excited about this trend. Again, the consumer will decide as to what the pace of adoption is going to be.

What about on yield? Is there any change in yields for the economics of these transactions?

Again, it will come down. Ultimately, the yield is a combination of what you earn on the payment leg, which we expect to be no different than what would be normally an e-commerce kind of transaction. And then it's how successful are we in terms of delivering incremental services, which tend to be what acts as the incremental element to drive higher yields. And we think there's tremendous potential from a delivery or services standpoint. And part of the reason is as you move away from that face-to-face engagement to one more level to move where a consumer is not really closing the transaction, but an agent is, there's a greater need for establishing trust, putting out security solutions, which are there, providing insights. All of these things are services we've been investing in for some time, which gives us opportunities from a yield standpoint going forward.

Yes. The other one would be stablecoins. How do you think about some of the risks and opportunities posed by stablecoins? That was obviously a big craze during the summer here, but still, there's still a lot of interest on stablecoins and what might the implications be for Mastercard?

Yes. Look, I mean, I think stablecoins are very exciting. It's something we've been leaning into for some time now. We see it clearly as an incremental opportunity for Mastercard we see it across and we're realizing that opportunity today. So this is not a theoretical it will come in the future kind of thing. The way we're realizing that opportunity today is through what we call the on-ramp and the off-ramp. And let me just spend two minutes explaining what the on-ramp and the off-ramp is. The on-ramp is when individuals use their Mastercard credentials to purchase stablecoins and crypto. So they're using Mastercard cards to purchase stablecoins and crypto. That's incremental volume and incremental transactions from Mastercard, and that's definitely accretive from a revenue standpoint. That's kind of point number one. In fact, in our Q3 earnings call, we talked about how Q3 year-to-date, we have seen 25% year-over-year growth in terms of these on-ramp kind of volumes there. And then again, then there's the off-ramp piece and the off-ramp piece is around partnering with stablecoin providers to launch co-brand programs. And we have approximately 130 such program which are live in the market and are growing at a healthy clip. And the purpose here is to give you as a consumer who has stranded cash sitting in your stablecoin wallet which you wish to use the ability to use it everywhere Mastercard is accepted. And we're seeing good traction. And that's again, incremental volume for MasterCard. So as I think about the stablecoin space, we certainly will play a part on on-ramp and off-ramp but we'll do more. For example, with MasterCard Move, which is our ability to actually send money back and forth, both across borders as well as domestically, we're enabling MasterCard Move to allow for stablecoin settlements because what we think about as stablecoins is it's one more currency in which we want to allow settlement to take place. So great opportunity. It's something we see us participating in on a going-forward basis. And I think as we see the world evolve, what we're starting to see is more and more banks, financial institutions, fintechs are expressing an interest to issue stablecoins. And as that proliferation of different stablecoins takes place, there's a greater and greater need for interoperability and the orchestration layer, which is what we as a network do. So we feel like there's a real opportunity for us to participate in this ecosystem on a going forward basis.

Got it. I have to ask about Capital One. I know you guys don't typically dive into any one particular deal. But since it's come up quite a bit, I was hoping you could just talk us through the cadence of the Capital One debit migration to Discover and the impact on the financials?

Okay, sure. So a couple of thoughts. First, Capital One is a great partner. And everything we've heard in terms of our dialogues with them continues to be one of an excellent partnership on a going-forward basis. I'll start there. Number two, they are one amongst many issuers who we deal with. So we have a fairly diversified portfolio. But since you're asking the question as it relates to the implications, it's like I said on the Q3 earnings call, the conversion of the Capital One debit portfolio is underway. It's something which started in Q3. We expect that conversion to carry on through Q4 of this year and into the early part of next year. So that's kind of the way it's going to play out. As it relates to the revenue impact, what I shared at the Q3 earnings call was that as you lose volume, you tend to lose revenue so is the volume, which is the normal thing which would happen. But I also did mention that there are certain contractual obligations which are due to us, which will act as a partial offset through 2026 to that lost revenue, which is there. So really, I mean, the way I kind of think about this is the debit portfolio will roll off, that's well understood. That's already comprehended and everything I shared in terms of our thoughts for 2025 in terms of our net revenue growth, et cetera. But the more important thing I would say is that the partnership continues to be strong. And on credit, we continue to be doing a lot of good work with Capital One, and we expect that will be the case going forward.

Yes. I was going to ask a couple of those things. On '26, you have those contractual obligations, kind of term fees, that's the way I think about it at least, but maybe that's not the right term. But you have that offsetting that? And then will there be a little bit of a bigger headwind in fiscal year '27 once those roll off?

Yes. But I mean math would suggest to the extent you've got lost revenue happening in 2026 associated with the roll-off of cards, which has been partially offset by these contractual obligations. You don't have the benefit of those contractual obligations, '27. So if you're doing a year-over-year compare, that would be the case.

Yes. But it's not going to be material?

Look, I mean, in the context of Mastercard, the loss of the debit portfolio is a very small portion of the total Mastercard in the first place. In fact, one of the things I shared with you at one of our earnings calls was in 2025, we expected the net revenue impact to be not material, right? And then when I think about this on a going forward basis, I think there's publicly available information as it relates to what the size of the debit portfolio is. And I think you can very well do the math as to what the impact is. Again, it's a partial offset from the contractual obligations in '26.

Right. What are your expectations like credit portfolio? We keep hearing mixed things that they like to move the credit portfolio. I don't know how you guys think about that.

It's, again, like I said, I mean, everything we're having in nature of dialogues with them shows a very strong cadence of dialogues on credit. We continue to be partnering with them on that. And nothing I've heard would suggest that, that changes.

Got it. I know it's not massively material, but the whole that Capital One creates. There's always wins and losses in every portfolio. I'm just thinking on the flip side. Is there anything in '26 or '27 that might be coming in to help fill some of the Capital One hole?

Well, I mean, if there's stuff coming in, it would be what we've been -- we've already announced that I would share with you. The reality is our teams are active. They continue to have a very strong pipeline, and we continue to engage with several partners in different ways. So I kind of view this as business as usual independent of whether the loss was there or not there of the debit portfolio, we'd be out there trying to win new business, and that's what we'll continue to do going forward.

Okay. Great. At your Investor Day in November of '24, you guys outlined three strategic priorities. It was the consumer payments, commercial and new payment flows and value-added services. Starting with the consumer payments piece. You guys have obviously done a great job of driving the secular shift from cash to electronic over the years. There's some concern that maybe we're running out of runway there. Maybe you can just help discuss the opportunity remains in the consumer payments and how you're going after it?

Sure. It's again, as we mentioned at Investor Day last year in November, right, we continue to see tremendous opportunity from a runway standpoint. And I'm not talking about a couple of years' worth of opportunity on the secular trends, which is what you're alluding to is -- what is the secular opportunity, which remains in terms of converting cash and check to electronic forms of payment. We see tremendous opportunity given our global footprint in terms of tapping into that. And we see that across volume as in the dollar value of spend as well as the number of transactions. In fact, I would tell you the penetration rate on the number of transactions, which have been digitized is lower than that of volume. And so our focus is to continue to tap into that volume opportunity but also accelerate on the number of transactions, which remain to be digitized. And we're doing that in a whole host of ways. So for example, let's take something like transit. We've been leaning in heavily to create what were previously closed-loop transit environments to open-loop transit environments. Specific examples would be think about the London tube system. Historically, that used to be where a consumer went and used their Oyster card. So what they would do is they would use their credit, debit card to buy 20 pounds worth of an Oyster card, right? Then you use your Oyster card to do 10 rides. What that would mean is it was one card transaction for 20 pounds, just simplistically said. When they've gone open loop, which they have, right, now a consumer can use their Mastercard credentials every time they go through. That is still 20 pounds being spent, but it's 10 transactions. So that's a great example of how we're penetrating into that transaction opportunity. And there are many such examples which are there. So that's one area I would tell you from a secular trend standpoint. There are many countries across the globe where cash is still the predominant way of being -- of how consumers transact. You go to a developed market like Japan. In Japan, there's a ton of cash, which still continues to be there. We're super focused on driving there, right? Germany, the other country where there's a bunch of cash. So we see tremendous opportunity. And even in the U.S., people oftentimes will say, well, the U.S. opportunity is kind of halved. The reality is the U.S. continues to grow at a very healthy clip, and we're tapping into areas such as rent, areas such as utilities, which historically have been challenged from an acceptance standpoint, we're making good headway there to actually get digital forms of payment. And our card credentials as being the method for payment there. So I'm very encouraged with the opportunity in consumer payments. And while we're on the topic of consumer payments, what I'll mention to you is our company remains very focused on also optimizing what is currently on guard rails. And by that, I mean the following. If, for example, with all our analytics, we are able to identify that there's a certain portfolio, there's a certain strata of cards where the average spend per card is lower than what the benchmark is, we'll work hard with the issuing bank in question to get them up to snuff. So the exciting thing is winning a new portfolio. That's what everybody talks about. To me, that's really interesting. But what's really interesting is what do you do with that portfolio after you win it? And this is where optimization comes in. How can you get the issuer's portfolio to outperform what market benchmarks are? This is where we use our services to drive hard on the consumer side. For example, on cross-border, people ask, how is it that you guys are growing cross-border at such a healthy clip? Well, it takes a lot of effort. It's -- yes, it's winning the right portfolio, it's winning fast-growing portfolios, but it's also about helping ourselves grow those portfolios at a rapid pace by getting our loyalty platforms in place to work with merchants to make Mastercard the preferred payment mechanism on that. All of this lends to that consumer payments opportunity, right? Last thing I'll mention is around tokenization, right? As you know, we've seen significant progress in terms of adoption of tokenization across the ecosystem. We talked about how in Q1, roughly 35% of our transactions are tokenized, we have mentioned that, that's the case. That's a pretty good kind of space to be in because tokenization means more volume going over our system means safer and secure volumes going around our systems. And very importantly, what tokenization does, and we've seen this, is tokenization tends to improve approval rates anywhere between 300 and 600 basis points. Higher approval rates mean more volume going over the system. So a ton of work going on in the consumer payment space, I remain super excited about the potential over the long term on that.

Yes. We had a merchant dinner last night. And one of the things they talked about the most is approval rates of rates like how did they get the transaction done is one of the most -- you don't think about that, but that's the most important thing to them. And obviously, tokenization can help spur that option for them. I want to turn to the commercial business. I think that was the second strategic priority. Obviously, large untapped opportunity. It's kind of been dangling out there for a while. Can you maybe explain the strategy there? And what might be different to help unlock that opportunity now?

Yes. Look, I mean, I think the commercial opportunity is -- it's not only sizable, but it's actually exciting in terms of delivering in the here and now. So let's kind of put some metrics out there, which might be helpful to kind of just frame the opportunity. Last year at Investor Day, we had shared with you that the addressable market in commercial is approximately $80 trillion as we see it. That is broken up into about $17 trillion of that addressable market at what we call the commercial point of sale and $63 trillion in invoice payments just to kind of frame what's there. Of that $17 trillion, which is in commercial point of sale, roughly $1 trillion as an industry has been carded so far. So there's this tremendous runway. And if I -- the best analogy I'd give you is this probably is what consumer payments look like a few decades ago. And then our invoice payments, what we've seen is $63 trillion, roughly $2 trillion of that is carded so far. The here and now is around commercial point of sale, and that's what we're realizing today. And that's around our SME proposition. That's around our T&E propositions, that's around our P-card propositions. So in 2024, at the end of 2024, commercial volumes stood at about 13% of our overall GDV, which is our overall volumes as a company. It grew at about 11%. It grew faster than the market for Mastercard. So we're tapping into it by winning on market share. We're tapping into it by opening up new acceptance verticals to tap into that secular opportunity. And the way we're going about doing it is open up new acceptance get cards in the hands of the small business owners and very importantly, drive differentiation by bringing our platforms to bear to serve the specific needs of what the commercial opportunity is going after. So for example, A small business owner might not care so much about a cashback proposition. A consumer might care about a cashback proposition. A small business owner might care more about are you giving me an expense reporting solution, which is what we deliver as part of our small business proposition. Small business owner might care about, "Hey, by the way, when I go and I use my card when I go for business travel and I rent a car, can I get an always-on discount at the car rental company?" we bring that through our Easy Savings platform. You drive differentiation in that way. And so we work with our issuers, we work with the acceptance universe to drive that. And I continue to see tremendous opportunity in that commercial point of sale in the here and now. On invoice payments, we're tapping into it with our virtual cloud capabilities. It is growing at a very healthy clip. The opportunity is sizable. But the problem statement there is also one which will take time to solve. So this is not something where overnight, we're going to suddenly see an inflection curve, which comes in where suddenly you're going to see tons of people move on to virtual card payments. It's going to require building blocks. It's going to require us to work on a vertical-by-vertical basis like we've done in travel, like we've done in transportation, like we've done in logistics, like we've done in media. We're going to keep banging away at this because we think there's tremendous opportunity with them. Which is why, going back to your first question, Bryan, I continue to see for the company, tremendous opportunity on the secular trends across both consumer and commercial. And it's not about, "Oh, it's all going to get realized in the next three years". This is building blocks for decades to come.

Yes. No, that's great. VASS has obviously been a big grower for you guys. I think it's now over 40% of revenue of the combined. Can you talk about the algorithm for services inside VASS and can it continue to grow at the rates it's growing at?

Sure. So look, I mean, VASS was no coincidence. It was a very deliberate part of what we took on as a company to go after because we identified that we have a unique asset in the nature of the data we have, which we can bring to bear. And this happened more than a decade ago when we started to lean in heavily on our value-added services and solutions. You're right. VASS represents approximately 40% of the revenues of the company. It is very fast growing. And our strategy around VASS is it's a fast-growing revenue source. We want to continue to make it stay that way. Number two, it provides us diversification in terms of our revenue stream. So it provides greater resilience in up and down cycles. And we've seen that in COVID, where when payment volumes fell during COVID, VASS actually held up pretty nicely. So that's really important. And last but not the least, VASS provides differentiation. And differentiation is important because in order to win in payments, you've got to have unique services to drive differentiation. And that's how we win share to a large part. So now coming to what are the -- what's the growth algorithm around VASS, right? We mentioned at our Investor Day last year that approximately 60% of VASS revenues is network linked. So it's tied to that underlying growth of the network. So back to your question around the secular trends, if you buy that the secular opportunity continues to exist from Mastercard, you're going to see the benefit of that come through in VASS growth, right, because 60% is network link. On that building block, right, we've got -- so how we've kind of structured it as you've got the underlying payment transaction, you've got VASS, which is attached to that payment transaction, which writes that curve up. We're driving deeper penetration of our existing VASS solutions with our existing customer base, and there's more to go there. At the same time, what we're doing is -- we're building new VASS solutions, which we're attaching to the transaction. So you get the benefit of the number of services per transaction is increasing while the number of transactions are increasing. So that kind of lends to that growth algorithm which I was talking about, right? And last but not the least, it's around expanding the addressable market we're going after. And by that, I mean, is a great example is actually a company we acquired last year called Recorded Future. Recorded Future is the world's largest threat intelligence company. Mastercard historically never participated in the addressable market associated with threat intelligence. With the acquisition of Recorded Future, we have opened up a new addressable market which actually contributes to that growth algorithm, which we're talking about from a VASS standpoint. And I'm happy to go into more detail about Recorded Future if that's of interest. But those are the building blocks, which have been driving the excellent growth we've been seeing around our value-added services.

And is there more new solutions and acquisitions you can add to throw on to VASS in the future?

I know people say history is not a good predictor of the future, but in our case, that has been the case, right? I mean the way we've grown our VASS portfolio has been through a combination of organic build and acquisitions, right? And that's exactly what we have done. If you had asked me that same question five years ago, I would've told you the answer is yes. And now we've demonstrated by doing what we've done in the nature of organic build as well as new acquisitions. And the path forward should be no different which is we'll continue to actually invest in organic build for new solutions and then kind of take it forward. And people ask how -- what informs your decisions as to what spaces you're going to play in. That is informed by our interactions with our clients as to what their needs are, right, make sure we totally understand what their needs are because at the end of the day, the clients are the ones who are telling us what they need. Then we make an assessment as to whether that need is something we're well positioned from a competitive standpoint to deliver on. and whether it is of scale and size from an addressable market standpoint and if it's fast growing. These are important attributes as we're building out that VASS portfolio.

Okay. Great. I was hoping we could spend a minute on last week's announcement on the U.S. merchant settlement. It would be helpful to get your perspective on various components. What it means for Mastercard, also I get the question a lot, what does it mean for Amex and the Honor all Cards rule, maybe you can just walk us through it.

Sure. So it's like the announcement set last week. So you're aware, we had reached a settlement agreement last year that was not approved by the judge last year. There was feedback given as to certain areas, which Judge thought was important that we addressed as part of the settlement agreement, which we've reached now, which we announced last week, we believe we've addressed those new points, right, specifically as it relates to the lowering of the cost of acceptance for merchants where now the interchange reduction is 10 basis points versus what was 7 basis points in the prior agreement, right? And then there are nuances to that, and I'm sure you can pick that up from the press release. And then the second component was around providing greater choice to merchants as to what they wish to accept in the nature of credit products, right? And again, you can see the specifics. We believe what we've delivered in the nature of this agreement with the plaintiffs in question, addresses what the judge was actually asking for from a merchant community standpoint. We think we're providing greater flexibility to the merchants as part of this journey. The merchants have to make the decision as it relates to how they implement this while balancing the interest of the consumer. Because actually, at the end of the day, it's going to be how the consumer reacts to what the merchant does, which is going to influence what the merchant ultimately ends up on.

Yes. I mean, I find it hard to believe that merchants are going to surcharge on certain cards. Then you have Amex, which is obviously known to be a higher MDR than other cards. I just -- it's kind of hard to see. I don't know, in other markets, has there been cases that you've seen how surcharging works and if merchants are going to use that.

Hard to say, right? I mean what what's really important, right, at the end of the day was to ensure that we provide choice to merchants in terms of making their own decisions as it relates to what they wish to accept. Just like today, as it stands, right, the merchant has the right not to accept the card, the merchant has the right to accept only a debit card, the merchant has the right to accept only a credit card or accept both debit and credit. That choice exists today. We just expanded on that choice and said, you now have the ability to choose to accept consumer and not accept commercial, if that's what you choose to do, right? And we've given them the choice to say, if you wish to accept only standard and not premium, you have that choice as well. So this is about making choices and let the merchant decide what is the right thing for their business in the context of the consumers they're serving.

Yes. I wanted to ask on capital allocation and M&A. Anything changed there on how you guys want to allocate resources?

Not really. I mean very consistent on this, Bryan. I'll tell you, as it relates to capital allocation, we continue to maintain that maintaining a strong balance sheet is of paramount importance for our company given the role we play as the payment network. And we will continue to reinvest in growth. We continue to see tremendous growth opportunities. We will reinvest in growth for the company to grow the top line and the bottom line of this company, both organically and through M&A, right? And then to the extent there's incremental capital thereafter, continue to return capital to shareholders with a bias towards share buybacks. And we do it both across share buybacks and dividends, and you can see what that mix is, but our bias has been towards share buybacks and largely because it provides us greater flexibility to the extent we wish to actually leverage and capitalize on opportunities which might present themselves on a going forward basis.

One of the acquisitions you guys made, it's Recorded Future, I think it was at the end of 2024. I thought that was an interesting acquisition. Maybe you could just talk a little bit about the progress since you guys have acquired them.

Yes. Super excited to have Recorded Future as part of the Mastercard family. We closed that acquisition in December of last year. We paid $2.65 billion for it. It is the world's largest threat intelligence company. They have 1,900 customers. They operate in north of 70 countries, they serve more than 50% of the Fortune 500 companies out there, very exciting. It's -- this is a great example of expansion of addressable market to drive services revenue, as we talked about. And really, if you just step back and you think about this, the reason we went down this path was because they have unique technology, leveraging AI to be able to pick up signals by scouring the dark web on nefarious activity, which is taking place on the dark web. We have a set of data, which they don't have. They have a set of data we don't have, right? And bringing the power of those data sets together to deliver the synergy products we are delivering right now is incredibly compelling. Just to make this real, I'm going to give you one example. They have the ability to pick up signals in the market of what might be stolen card credentials, which are floating around on the dark web because they're being transacted on the dark web. We have card credentials because that's what we do. We work with issuers with our credentials. The ability to bring that together to step up for our issuers and provide them the capability to say, these credentials are stolen. They're out on the dark web, you should step up authentication to avoid fraud is incredibly powerful. We're getting some really good feedback from our customers on the launch of this capability. So that's a great example of delivering value and then charging for the same. And that's what -- that's just one example of what Recorded Future along with Mastercard.

We're almost out of time, Sachin, so I just want to wrap up thinking about biggest risks and opportunities on the horizon as a CFO? What are you thinking about? What messages are you delivering to the team as you think about the future?

Yes. Look, I mean, from a risk standpoint, I would tell you, the world is evolving really rapidly around us in terms of new technologies which are emerging, right? We've just got to continue to lean in. That's what we've been doing, and we'll continue to do that going forward because to be actually completely oblivious to new technologies is not a good place for us to be. That's not the MO we've kind of adopted, and we will continue to be part and parcel of the solution as opposed to saying this new technology is not going to come and create a threat to us. But the risk here is things that are happening around us, you've got to lean into that, right? The other one is around the regulatory environment, which exists, right? But that's not a new risk. That's the risk which we've kind of dealt with for decades. We -- it's our job to continue to educate the regulators as to the value we bring, which is something we'll continue to do. On the opportunity side, look, I would tell you, you talked about the three growth pillars. I would say there's -- I remain very excited about driving hard across each one of those three growth pillars by making sure we're appropriately allocating capital to drive on the execution and realizing that opportunity. And that's what we're doing. And you're seeing those results come through. You're seeing solid results come through in terms of how we're delivering on both top and bottom line, right? And it's our expectation that with the opportunity set ahead, we have to just keep going after exactly that opportunity, which we've laid out from a three growth pillar standpoint across consumer, commercial and new payment flows and the value-added service and solution.

Okay. With that, Sachin, congratulations on all the solid results and good to see it.

Great. Thank you for having me, Bryan. Thanks very much.