Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard Incorporated Q3 2025 Earnings Conference Call. Mr. Devin Corr, Head of Investor Relations, you may begin your conference.

Thank you, Julianne. Good morning, everyone, and thank you for joining us for our third quarter 2025 earnings call. With me today are Michael Miebach, 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 accompany 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 Miebach.

Thanks, Devin. Good morning, everyone. We delivered strong results in the third quarter. Net revenues increased by 15% overall, and net revenue from value-added services and solutions saw a 22% rise compared to a year ago on a non-GAAP currency-neutral basis. Our impressive performance reflects our effective strategy, innovative market leadership, and dedicated execution. We continued to observe robust consumer and business spending during the quarter, with the macroeconomic environment remaining generally favorable. Inflation levels have stabilized, and labor markets are balanced. Financial markets approached record highs, contributing to a wealth effect that encourages spending. Given this backdrop and our diverse business model, we are well-positioned for ongoing success. During the quarter, our streak of wins persisted. Our partnership approach, coupled with our unique payment offerings and value-added services, continues to yield positive outcomes. We secured several co-brand partnerships with major airlines and retailers, including Japan Airlines, Comair in Mexico, and Uni-President Group in Taiwan. Additionally, we have strengthened our relationships with bank partners globally, demonstrating the unique value we offer. In the Nordics, we renewed our strategic partnership with Nordea concerning card issuance and service capabilities. We're pleased to announce that Mastercard will serve as the exclusive network partner for the neobank's U.S. card program, which builds on our extensive partnerships throughout the Americas. Earlier this year, we introduced the Mastercard World Legend card designed for ultra-high net worth individuals. We also launched the Mastercard Collection, which offers a range of globally connected premium benefits and experiences for our World, World Elite, and World Legend cardholders. This distinctive value proposition has helped us secure several key affluent portfolios worldwide, including First Abu Dhabi Bank in the UAE, Saudi Awwal Bank, Saudi National Bank, and Doha Bank in Qatar. In Brazil, we are collaborating with multiple banks, including Itau, Banco do Brasil, C6 Bank, and BTG, to develop new affluent portfolios, reinforcing our strong credit position in that vital market. Shifting focus from our recent successes, we are committed to executing our three strategic priorities to unlock long-term growth. I'll outline each one, starting with consumer payments. The consumer opportunity is vast, with $11 trillion in gross dollar volume and 1.5 trillion transactions still conducted via cash and checks worldwide, along with further potential in China and counter account bill payments. We are targeting these areas by expanding our acceptance in underrepresented sectors and opening closed-loop payment networks. Considering the rental sector, the volume of rental payments globally is substantial. Most payments are currently made through checks or ACH and are regularly recurring. This is a natural focus for us. Through our co-brand and services capabilities, we have successfully achieved large-scale acceptance with partners. This quarter, we partnered with Renti, a rental management platform in New Zealand, which allows card acceptance and offers attractive rewards for their customers opting for Mastercard. This showcases how we deliver value across this ecosystem. Regarding closed-loop payment networks, we have introduced new contactless acceptance in closed-loop transit systems in Italy, Japan, Chile, as well as with the Chengdu and Guangzhou metro systems in China. Overall, we have digitized hundreds of systems in major cities worldwide. The simplicity of a tap-and-go experience effectively influences consumer behavior, and we are observing strong results. It also acts as a transaction multiplier, creating transactions for each ride rather than a single monthly metro card purchase. Volumes have increased as well, with Mastercard gross dollar volume on open-loop transit systems rising by 25% year-over-year on a local currency basis. This shift positively impacts everyday spending categories, which is significant. Additionally, we are driving increased volumes from local stored value digital wallets through the Mastercard network via our partnership with Alipay+, which encompasses 36 e-wallets. We are also expanding cross-border payment solutions to Kakao Pay in South Korea, following previous launches with AlipayHK and GCash. In India, we are partnering with PhonePe to enable users to transact both in person and online using their Mastercard payment credentials. Digital wallets are increasingly collaborating with Mastercard due to the significant value they find in our extensive global acceptance at millions of merchant locations and digital access points. Agentic commerce is on the rise, and we are central to it. With our wide acceptance reach, trusted brand, and service capabilities, we are crucial in establishing a strong foundation for agentic commerce. We are collaborating with key players like OpenAI on their agentic commerce protocol and with Google and Cloudflare to establish industry standards that enhance safety and security. Through Mastercard Agent Pay, we empower agents to carry out transactions over our payment network safely and efficiently. We've already registered agents and prepared tools for seamless onboarding. Our first agentic transaction was completed on our network this quarter, representing a significant milestone in payments, and this is just the beginning. U.S. Bank and Citibank cardholders are now able to utilize Agent Pay, with additional U.S. issuers to be enabled in November and a global rollout expected early next year. Notably, we've made it straightforward for merchants worldwide to take advantage of these benefits, maintaining the trust and security they expect from us today. Our acceptance framework allows any Mastercard merchant to participate without extensive development or integration – a no-code approach. For agentic payments, we offer trust and transparency, supported by the right capabilities and acceptance reach. We are cultivating strong partnerships with mentioned players and many more, including Walmart, to accelerate the embrace of agentic commerce using cards through Mastercard Agent Pay. Our services are already significant and will play an even larger role looking forward. Many within the payments ecosystem are joining forces with Mastercard and our specialized consulting teams to prepare for agentic commerce. Agents, using Mastercard's insight tokens, can provide an even more personalized agentic commerce experience. By leveraging our proprietary data, we will supply agents with predictive insights, enabling better decision-making and recommendations. The evolving landscape of commerce is opening new avenues for our capabilities: more consulting, expanded loyalty programs, enhanced security, and more. The potential for agentic-focused services in both consumer and business contexts is extensive, and we are well positioned to seize these opportunities. Like agentic commerce, we consider stablecoins to be an appealing and expanding opportunity for our network. We support offering consumers and merchants choices in how they transact. Our network has long enabled the purchase and spending of crypto and stablecoins across our acceptance ecosystem. Currently, we have around 130 crypto co-brand card programs active, with rising volumes and transactions. We are broadening our partnerships through new agreements with Consensus on the MetaMask card in the U.S. and with Binance in Brazil. We are also witnessing robust growth in on-ramps, with transactions in Q3 up over 25% at crypto merchants compared to the previous year. Now, let’s discuss commercial and new payment flows. The B2B opportunity is enormous, and we are implementing a targeted strategy to expand our reach. Small businesses remain a top priority. Over the past year, we have increased the availability of small business Mastercards in the market by more than 10%. A crucial part of our growth strategy has involved collaborating with traditional issuing partners such as Carrefour Financial Services in Spain, as well as alternative distributors. This quarter, we partnered with Zaggle, a spend management provider in India, along with Biz2Credit, a small business financing platform in the U.S., and RTS, a U.S. transportation services provider to distribute commercial and small business cards to their clientele. Additionally, we are teaming up with Instacart in the U.S. to issue small business cards that deliver rich rewards and instant payouts through Mastercard Move capabilities. Our virtual cards create advantages for the whole ecosystem. Suppliers receive quicker payments securely and experience streamlined reconciliation. Buyers enhance their working capital and gain improved control over their spending in a safe and straightforward manner. [ BBVR ] will soon provide Mastercard virtual cards to their travel agency clients in Mexico, with plans to extend the service beyond this region to South America and Europe. We are streamlining the use of virtual card capabilities for corporates within their existing workflows, now with over 10 global B2B and T&E platforms engaged, supported by numerous regional partnerships. We are collaborating with issuers, acquirers, and payment facilitators to integrate card payment tools and enhance acceptance within everyday platforms used by buyers and suppliers. We continue to add value for suppliers through simplified reconciliation tools and adaptable B2B economics, offering flexible rates in the travel sector and for domestic business-to-business flows in the U.S. Our U.S. program has nearly doubled its customer participation over the last two years. Given this success, we are scaling flexible rate programs globally. Next, regarding Mastercard Move: Our disbursement and remittance solutions continue to perform strongly, evidenced by over 35% transaction growth this past quarter. To drive further adoption, we are integrating Mastercard Move into leading core banking platforms, including Infosys this quarter. We are making headway in key EMEA markets through our partnerships with Worldpay and STC Bank. In China, we have created more opportunities for consumers to make outbound remittances across our extensive network. In June, we announced embedding stablecoins into Mastercard Move capabilities to support disbursements, remittances, and B2B transactions. This includes prefunding with stablecoins and sending stablecoins globally, which can be converted to any local currency or used to support stablecoin transactions. We are diligently pursuing this roadmap, now equipped with prefunding capabilities established with customers in Europe, the Middle East, and Africa, including PaySend this quarter. Moving to our third strategic focus, services. We have developed a comprehensive services portfolio that includes security, consumer engagement, and business insights. Our services differentiate our payment network and provide significant value to our customers beyond mere transactions. We are actively driving growth by deepening our existing customer relationships, diversifying into new customer segments, and pursuing innovative solutions. We have extended our market presence and share of wallet among our bank customers, establishing strategic relationships with retail banks while expanding marketing, loyalty, and security offerings across our customers. For instance, we have built on a productive partnership with Rogers Bank in Canada by expanding our collaboration with Rogers Communications to provide fraud prevention and payment gateway solutions. Additionally, they are a launch partner for our newly announced Mastercard merchant cloud offering, which I will detail further. Moreover, we are broadening our client base across merchants, governments, and digital players. Notable examples this quarter include the Polish Ministry of Digital Affairs using Recorded Future’s Threat Intelligence capability and Equifax in Australia leveraging our open finance capabilities to improve lending practices for underserved consumers. Furthermore, we continue to innovate to penetrate and expand within the $165 billion serviceable market highlighted at last year’s Investor Day. We are consistently innovating within the payments space. Last month, we introduced on-demand decisioning, a customizable rules engine that offers issuers enhanced flexibility and control over payment authorizations. This is a prime example of how our network supports issuers in optimizing payment portfolios and enhancing user experience promptly and efficiently. For the merchant community, we launched a merchant cloud offering—Mastercard's integrated acceptance, gateway tokenization, fraud, and insight solutions through one platform. Partners can now easily incorporate these services into their solutions or sell them directly to their customers, showcasing how we effectively deliver innovation at scale. We are extending our value beyond transactions by utilizing insights derived from our extensive data repositories. By merging Mastercard's payment expertise and global network visibility with Recorded Future's superior cyber threat intelligence capabilities, we have recently announced Mastercard Threat Intelligence. Issuers and acquirers utilizing this service can proactively identify cyber threats to prevent payment fraud. Mastercard Threat Intelligence complements our existing cybersecurity intelligence, fraud scoring, and defense functionalities. In closing, we recently introduced Mastercard Commerce Media, a digital media network aimed at making advertising more personalized, relevant, and effective. Advertisers face increasing pressure to demonstrate that every dollar spent yields tangible outcomes. Mastercard Commerce Media uniquely aids advertisers in delivering tailored offers to the right consumers at the right moments through our proprietary spending insights. After offering an opportunity, we can evaluate the effectiveness of each advertisement by directly linking it to actual purchases made. By building on our existing loyalty programs and technologies, we can connect with the 500 million enrolled permissioned consumers and 25,000 merchant advertisers from day one. As you can see, we are relentlessly committed to delivering value to our customers, which is why they consistently choose Mastercard. With that, I'll conclude. We've had another robust quarter and see significant opportunities ahead. The fundamentals of our business remain strong. I am very optimistic about Mastercard's future. Our proven growth strategy, unique solutions, and ongoing innovation position us to succeed as we have demonstrated repeatedly. It's an exhilarating time in payments, and Mastercard is leading the way. Sachin, it's your turn.

Thanks, Michael. Let's turn to Page 3, which shows our financial performance for the third quarter on a currency-neutral basis, excluding replicable special items and the impact of gains and losses on our equity investments. Net revenue was up 15%, reflecting continued growth in our payment network and our value-added services and solutions. Acquisitions contributed 1 ppt to this growth. Operating expenses increased 14%, including a 4 ppt increase from acquisitions. Operating income was up 15%, which includes a 1 ppt headwind from acquisitions. Net income and EPS increased 8% and 11%, respectively, driven primarily by the strong operating income growth, partially offset by a higher effective tax rate due to Pillar 2 and a change in our geographic mix of earnings. The tax rate in the quarter was higher than expected due to a discrete tax expense. EPS was $4.38, which includes a $0.10 contribution from share repurchases. During the quarter, we repurchased $3.3 billion worth of stock, and an additional $1.2 billion through October 27, 2025. Now turning to Page 4. Let's first look at some of our key volume drivers for the third quarter on a local currency basis. Worldwide gross dollar volume (GDV) increased by 9% year-over-year. In the U.S., GDV increased by 7% with credit growth of 7% and debit growth of 7%. Outside of the U.S., volume increased 10% with credit growth of 10% and debit growth of 9%. Overall, cross-border volume increased 15% globally for the quarter, reflecting continued growth in both travel and non-travel related cross-border spending. Turning to Page 5, switched transactions grew 10% year-over-year in Q3. We continue to see an increase in contactless penetration, which in Q3 stood at 77% of all in-person switched purchase transactions. This is up 6 ppt since the same period last year. In addition, card growth was 6%. Globally, there are 3.6 billion Mastercard and Maestro-branded cards issued. Turning to Slide 6 for a look into our net revenue growth rates for the third quarter discussed on a currency-neutral basis. Payment Network net revenue increased 10%, primarily driven by domestic and cross-border transaction and volume growth. It also includes growth in rebates and incentives. Value-added services and solutions net revenue increased 22%. Acquisitions contributed approximately 3 ppt to this growth. The remaining 19% increase was primarily driven by growth in our underlying drivers, strong demand across security, digital and authentication solutions, consumer acquisition and engagement services, and business and market insights and pricing. Now, let's turn to Page 7 to discuss key metrics related to the Payment Network. Again, all growth rates are described on a currency-neutral basis, unless otherwise noted. Looking quickly at each key metric. Domestic assessments were up 6%, while worldwide GDV grew 9%. The 3 ppt difference is primarily driven by mix. Cross-border assessments increased 16%, while cross-border volumes increased 15%. The 1 ppt difference is driven by pricing in international markets, partially offset by mix. Transaction processing assessments were up 15%, while switch transactions grew 10%. On an unrounded basis, the 4 ppt difference is primarily due to favorable mix as well as some benefit from pricing and revenue from FX volatility. Other network assessments were $255 million this quarter. Moving on to Page 8, you can see that on a non-GAAP currency-neutral basis, excluding special items, total adjusted operating expenses increased 14%, which includes a 4 ppt impact from acquisitions. Excluding acquisitions, the growth of total adjusted operating expenses was primarily driven by increased spending to support various strategic initiatives, including investing in our infrastructure, geographic expansion, enhancing and delivering our products and services, and advertising and marketing. Total adjusted operating expenses were lower than expected this quarter, primarily due to the timing of expenses between the third and fourth quarter. Turning to Page 9, let me comment on the operating metric trends. Starting with Q3, all our switch metrics are generally in line with Q2 and remained strong. As we look to the first four weeks of October, our metrics continue to remain strong, generally in line with the third quarter. Of note, U.S. switched volumes saw a sequential decline, primarily due to the expected Capital One debit migration as well as some tougher comps related to weather impacts in 2024. Overall, we continue to see healthy consumer and business spending. Turning to Page 10, I wanted to share our thoughts for the remainder of the year. The headline is that our business remains strong, and consumer and business spending remains healthy. We delivered another strong quarter. The macroeconomic environment is supportive with balanced unemployment rates, wage growth continuing to outpace the rate of inflation for the most part, and the wealth effect remaining intact. That said, there continues to be some ongoing geopolitical and economic uncertainty. We remain well positioned for the opportunities ahead, driven by a resilient and diversified business model, the significant opportunity for further secular shift to digital forms of payment, and strong demand for our value-added services and solutions. We remain laser-focused on executing against our strategy and remaining at the forefront of payments and services, as demonstrated by the innovative new solutions that Michael just highlighted. We do this while maintaining a disciplined capital planning approach. Now turning to our expectations for the fourth quarter. We assume continued healthy consumer and business spending. We expect year-over-year net revenue growth to be at the high end of a low double-digit range on a currency-neutral basis, excluding acquisitions. As mentioned last quarter, our rebates and incentives as a percentage of our payment network assessments is expected to be higher in the second half of 2025. We continue to see Q4 having the highest contra percentage relative to the other quarters, primarily driven by timing within the year and normal seasonality. For the quarter, acquisitions are forecasted to add 1 to 1.5 ppt to the net revenue growth rate, and we expect a tailwind of 4 to 4.5 ppt from foreign exchange for the quarter. From an operating expense standpoint, we expect Q4 growth to be at the low double digits range versus a year ago. Again, on a currency-neutral basis, excluding acquisitions and special items. Acquisitions are forecasted to add 4 to 5 ppt to this OpEx growth, while we expect an approximately 2 ppt headwind from foreign exchange for the quarter. Now turning to the full year 2025. We continue to expect net revenues to grow at the low teens range on a currency-neutral basis, excluding acquisitions. Acquisitions are expected to add 1 to 1.5 ppt to this growth rate for the year, and we estimate a tailwind of 1 to 2 ppt from foreign exchange. From an operating expense standpoint, we continue to expect growth to be at the low end of a low double-digits range versus a year ago, on a currency-neutral basis, excluding acquisitions and special items. Acquisitions are forecasted to increase the OpEx growth rate for the year by 4 to 5 ppt, while we expect a headwind of 0 to 1 ppt from foreign exchange. Other items to keep in mind on other income and expenses in Q4, we expect an expense of approximately $110 million. This excludes gains and losses on our equity investments, which are excluded from our non-GAAP metrics. We expect our non-GAAP tax rate to be around 21% for Q4 and between 20.5% and 21% for the full year. And with that, I will turn the call back over to Devin.

Thank you, Sachin. Thank you, Michael. Julianne, you may now open up the call for questions.

This question comes from Bryan Bergin from TD Cowen.

I wanted to ask on U.S. payment volume growth. So, steady overall activity is evident here. But just curious on the surface, are you seeing any evidence of downward trends or differing consumer cohort behavior? And then just any early views on potential holiday spend?

Sure, Bryan. I'll take that question. Look, I mean, drivers continue to hold up really well. You can see that in our metrics, true in the third quarter, and it continues to be the case in the first four weeks of October as it relates to different segments of the population. When we do our analysis based on looks of the various products we have out in the market, which serve the affluent population versus the mass market population, as well as when we look at the amount of spend across different categories of products that we have, what we're seeing is continued steady growth, both across affluent and mass market, true in the U.S., and true across the globe. Overall, the consumer continues to spend, and everything we're seeing so far is manifesting itself in the drivers which we're talking about right here.

And you can expect that consumers at different income levels make different decisions on their spending, discretionary versus non-discretionary. What matters for us is that it has to be carded, and that plays in, and that adds up to the resilient trends that Sachin just talked about.

Our next question comes from Darrin Peller from Wolfe Research.

All right. Nice results. When I look at VASS at 22% growth, I think it was a few points from Recorded Future also. If you could just remind us exactly, but just maybe revisit the underlying drivers that are supporting that kind of growth and whether those are sustainable over the next 12 to 18 months. Additionally, what is driving it? How much could tokenization drive into agentic going forward? And just a quick follow-up also on the Capital One discovery side. I know you mentioned you included it in the guide. I think that was the debit side. Is there anything on credit you're seeing? A little more color on that would be great.

All right. So Darrin, let me start on the VASS side. We took great care in curating the VASS portfolio over the better part of the last decade. We were keen to find a portfolio mix that is anchored in underlying trends. So digitization, more data, increased need for security, and more insights to run a business better. You've heard us say that a thousand times, and it continues to be very true. When I look at the demand for cybersecurity with the rising fraud landscape and more fraud vectors out there, that just continues to power on. We step right into that with a series of innovations. I mentioned Mastercard Threat Intelligence earlier in my prepared remarks. To your question about Recorded Future, Sachin can discuss the specifics there. That is our data combined with Recorded Future's Threat Intelligence, creating a powerful synergy. There are many companies out there that provide security solutions, but no amount of spending can outmatch the threat landscape. Threat Intelligence enables targeted spending on cybersecurity, and that is a powerful proposition for our customers. One example is how we help our customers enhance their businesses, drive their top line, and improve consumer engagement through personalization, data, and insights matter more than ever before. We have a comprehensive set of solutions. Earlier, I talked about our loyalty components, which are increasingly significant. I believe we are aligned with the right trends. I don't see any disruption in terms of demand. Our challenge is to continue innovating. I mentioned several new innovations, which underscore that our innovation capabilities are robust.

Yes. And Darrin, I'll just add to what Michael just discussed on VASS, but I'll also comment on your Capital One question. First, in the third quarter, we saw VASS grow 22%, with three points of that driven by the acquisitions of Recorded Future and Minna. So, we had organic growth of approximately 19%. The key drivers of growth on VASS come across the board. At the Investor Day, we shared that roughly 60% of our VASS revenues are network linked. So, the underlying growth in drivers and the secular shift contribute to VASS growth as well. Secondly, as Michael noted, we continue to introduce new products while penetrating existing products in areas such as security solutions and consumer engagement. These all contribute to our overall growth rate. Finally, pricing is tied to the value we deliver. As we launch new products in the market, we ensure we price for that value. This adds to our overall formula for services growth. Services growth represents a long-term opportunity, not just this year, but for years to come, and this is vital for our overall business growth.

I think there was one other aspect in your rather long question, Darrin. You also asked about tokenization. Let me address that separately. On the tokenization front, we are handling billions of transactions monthly, and that has scaled tremendously. We started building a suite of services around tokenization, and we began pricing for it due to the rising demand, which differentiates us further from local payment networks and alternatives. Demand for our services remains strong.

Our next question comes from James Faucette from Morgan Stanley.

I wanted to ask about the evolution and enablement that Mastercard is providing for agentic commerce. Can you talk a little bit about how Mastercard is accelerating this, and any unique threats or legal issues we should consider when tracking this growth and its contribution?

All right. This is a significant development. There are two lenses to consider. The first is behavioral change, fueled by generative AI and bots, leading to shifting search behaviors. Consumers are increasingly moving their searches towards their favorite chatbots. This behavior shift changes how transactions work, integrating agents into the process. This introduction adds complexity, including questions around legalities and security. To navigate these complexities, we must ensure that the bot in question meets Mastercard's safety and security standards. That's what we're doing with Mastercard Agent Pay, where we enable certified bots to facilitate transactions over our payment network. We are addressing these challenges while maintaining the core competencies we have today, and we are developing solutions to ensure a trustworthy and efficient transaction process. Another consideration is the merchant realm. We developed a merchant framework to engage merchants effectively and simplify their experiences. Our goal is to prepare them for these new transaction flows in a no-code approach, which we’ve learned is essential for merchant adoption and ease of use. Security and authentication remain a priority as we strengthen consumer trust in this evolving landscape. The legal and regulatory frameworks will evolve over time, and our services are designed to support that evolution, making this a considerable opportunity for us.

Our next question comes from Jason Kupferberg from Wells Fargo.

I wanted to talk a bit more about opening new acceptance channels. On the consumer side, you mentioned rent, which has been targeted for a while but has not taken off significantly. I'm curious about potential catalysts for unlocking those volumes and whether interchange models are changing. Any other emerging acceptance verticals worth discussing as well?

Going into underpenetrated verticals, where ingrained behavior exists, takes time. However, I believe we are making real progress. For example, we've made strides in the U.S. with Bilt, where younger consumers are eager to pay their rents using our solutions. Our rewards loyalty programs and partnership models are key differentiators in this area. We're selective in choosing verticals because they each have unique challenges; for example, we focus on healthcare and tourism, where we've provided multiple updates over recent calls. We aim to leverage our current solutions while tailoring them to create value in those sectors—we see significant market opportunities ahead.

And Jason, regarding M&A, our strategy remains unchanged: our approach is strategy-led. We assess whether to build, buy, or partner based on our needs. For those opportunities where an acquisition makes sense, our pipeline remains robust. We are deliberate in filtering through this pipeline to ensure alignment with our strategic goals. Our focus areas continue to be aligned with services, while we also consider the payment network when necessary.

Our next question comes from Bryan Keane from Citi.

I have two follow-ups. On agentic commerce, Michael, can you help us understand how Mastercard might take share in this space compared to competitors? What differentiates you? Who are you targeting to take share from? And lastly, Sachin, could you clarify the Capital One migration? How much is expected to be lost in 2025 versus 2026? With the contractual obligations, should we expect minimal headwinds in 2026 and perhaps a one-time hit in 2027?

So, regarding the sharing aspect, we have a differentiated proposition for agentic commerce. We expect to be well-positioned with partners looking to enter this space and collaborate with us. Our focus on service extending beyond traditional payments is a major element of this differentiation. As agentic commerce evolves, our presence in diverse markets allows us to strengthen relationships and even deepen our share. This offers us a chance to shift the payment landscape at merchants that might typically compete with local payment networks or solutions.

On Capital One, the migration is underway, and while certain revenue is affected, it's important to recognize we managed this transition and anticipated factors guiding our guidance since we mentioned that this is a well-understood process. Consequently, there will be shifts within that framework, and we implemented strategies to mitigate losses. While we'll see a reduction in numbers on U.S. volumes due to this migration, we remain optimistic due to our multifaceted relationships across our network.

Our next question comes from Harshita Rawat from Bernstein.

Michael, I want to ask about Mastercard Commerce Media. Can you expand upon the announcement? It looks like you're bringing together a lot of assets across offers and loyalty. What kind of early feedback have you received from advertisers? How will it work? The release also addressed a high return on ad spend. Can that be maintained?

Thank you, Harshita. Since our launch of Mastercard Commerce Media, we've engaged heavily with advertisers and publishers. One key challenge we're addressing is proving the attribution of ad spend, and we can now link a specific transaction to an ad, enhancing our value proposition. To effectively deliver tailored ads at the right time, we leverage proprietary spend data and engage with our extensive network. Early feedback has been positive and indicates strong demand for our unique service that transcends traditional payment transactions. This is still early, so while I cannot provide many hard numbers yet, the initial reception indicates significant interest in this new direction.

Our next question comes from Tien-tsin Huang from JPMorgan.

Nice results, of course. Following up on previous questions, can you clarify any recent build projects like the cloud platform and Commerce Media Network? Are these expected to move the needle in VASS? Regarding the buy side, there were press reports about Mastercard's interest in crypto infrastructure; can you comment on that?

Mastercard has excelled in organic innovation and remains focused on leveraging acquisitions whenever they align strategically. The announcements around Commerce Media and our new platforms signal our commitment. We are confident these initiatives will have a positive impact on our VASS performance over time. While I acknowledged rumors surrounding crypto infrastructure, we do not comment on market speculation; however, our portfolio is poised to adapt and respond to emerging trends.

Our next question comes from Andrew Schmidt from KeyBanc Capital Markets.

I wanted to ask about cross-border. Cross-border volumes have shown remarkable resilience and consistency. Can you comment on sustainability and the drivers we should monitor? Also, within card-not-present and travel categories, are there noteworthy shifts occurring?

Sure, Andrew. To set the stage for cross-border, the value proposition resonates well across consumers and businesses. Cross-border encompasses both consumer and business spend. This value proposition is alive and leveraging those benefits for growth. Winning the right portfolios, such as co-branded partnerships with airlines, is crucial. These contracts help generate consistent cross-border volumes, while agreement on our product offerings extends our reach. Optimization of cross-border volumes is about daily efforts and aligning with acquiring corridors; we stimulate spending to ensure Mastercard remains the preferred choice for travelers. Overall, I will refrain from providing a precise forecast but emphasize that our foundational drivers for cross-border volumes are intact and poised for future growth.

Our next question comes from Tim Chiodo from UBS.

I want to discuss cross-border acceptance. When Mastercard or any competitor seeks to build global acceptance, could you elaborate on the necessary components? Additionally, what are your perspectives on the partnership model versus a self-directed build approach?

You’ve articulated well what it takes to build a global acceptance platform, which is inherently complex and time-consuming. The scale we’ve achieved is substantial; replicating it is challenging. To succeed, global acquirers must navigate local regulations, form relationships with key local players, and create compelling user experiences. Partnerships are essential as we complement the last mile, allowing merchants to build loyalty toward our offerings. Many alternative networks face similar challenges; our position is unique for our established trust, expansive acceptance, and comprehensive services portfolio, which enhances the value for merchants in diverse regions.

To your point regarding acceptance, expanding it is not limited to cross-border only. We are increasing acceptance for both domestic and cross-border channels. With our robust domestic networks in numerous countries, they support increased acceptance for cross-border payments too. As these markets thrive, they enhance our global footprint and underpin our long-term strategies.

Our next question comes from Sanjay Sakhrani from KBW.

On pricing, Sachin, you mentioned it has been a tailwind this year. Can this trend persist into 2026? Regarding the core payments business, do you believe pricing power remains strong? Lastly, as a follow-up on the Capital One data disclosure, can you help us understand the sequential drop in volumes? What should we anticipate moving forward into the fourth quarter and next year?

On Capital One, the conversion is in progress. A reduction in volume is expected but is recognized strategically. To understand the volume drop, it's essential to consider prior quarter growth rates which were strong due to seasonality. The anticipated decrease stems significantly from migration impact. Capital One's move is planned, and we are managing and integrating seamlessly to minimize disruption in the metrics as a whole. Looking forward, we expect these circumstances as part of a normal transitioning process as they complete.

While the Capital One transition is impactful, it's important to keep in mind our U.S. market contains numerous partnerships. Beyond our relationship with Capital One, we have been winning across various sectors globally. When zooming out, it’s clear we’re showing a net positive trend with our offerings; there will be variances, but we excel in overall partnership integrity. It's relevant to maintain that perspective amidst these fluctuations.

Regarding pricing, if we continue delivering value, we should expect continued ability to price that value. As we innovate and expand our offerings, the growth rate of pricing comes from effective competition strategies, particularly in the value-added services and core payment aspect.

Thank you, Michael. Any closing comments?

Yes, I'd love to continue discussing, but we're slightly over time. Thank you for joining the call. We covered a lot of ground this past hour. We appreciate your continued support, and I want to express gratitude to everyone who makes it all happen here at Mastercard, our colleagues. Thank you all, and we will talk again next quarter. Thank you very much, and take care. Bye-bye.

Thanks, everyone.

This concludes today's conference call. Thank you for your participation. You may now disconnect.