Thanks everybody for joining. This is Tien-tsin Huang. I follow the payment sector here at J.P. Morgan, and always excited to have Mastercard with us. Super grateful to get Sachin Mehra, the CFO, with us. We'll do a fireside chat. Devin Corr is here as well, from the IR team. Thank you for being here, both of you.
Thank you, Tien-tsin. Thanks for having us. Always enjoy being here at your conference.
No, it's always fun. I always enjoy the conversation. It's easy. You make it easy, Sachin. We'll have a quick 30 minutes I'm sure to go through the topics of the day. Let's kick it off. You know, of course, you just had the quarter recently, and we talked a lot about, you know, a lot of uncertainty out there in the market. You know, heightened uncertainty I think is the term you used. Can you give us just a sense of what the health of the consumer looks like today on the ground? You have such a great, you know, insight into what the consumer is doing.
Sure.
How would you describe it today?
Happy to do that. Look, I mean, as we mentioned at the earnings call and as I look at even trends post-earnings, the consumer continues to be in actually pretty good shape. What we're seeing from a consumer strength standpoint is holding up nicely. That's true largely being driven by the fact that as I look across the globe, unemployment rates are still very much within the range of all-time lows, that's certainly a contributing factor. Wage growth is something which we're tracking closely, that continues to do well as well. There are a little bit of a headwinds which we see coming through on account of higher inflation, primarily driven by higher energy prices.
When you actually peel back what's going on from an inflation standpoint, you're certainly seeing higher energy prices come through in the nature of the headline inflation number. On other categories of spend, you're actually seeing some level of disinflation which is taking place. There are offsets taking place there as well. All of that being said, when I take low unemployment rates, you know, the fact that wage growth is still at pretty healthy rates, as well as the wealth effect, i.e., the fact that equity markets continue to do well, all of that's translating into a healthy consumer as we see it.
So much so that when I look at our own metrics, and, you know, we've shared with you metrics as it relates to what we saw through the week ending April 28th, and then I've seen what's kind of gone on through the first two weeks of May. I would tell you by and large across our metrics, we're seeing, you know, stable to slightly better trends across the metrics. Now, that includes some of the adjustment which takes place from a timing standpoint, and the timing is something I'd flagged as part of the earnings call which took place in April, i.e., we had seen some headwinds from a timing standpoint in our first four weeks of April. You see the reversal of that come through, by and large, good, strong trends from a consumer health standpoint.
Okay, good. I know that's always important and glad for the update there. Thank you for that. Just thinking about, I know going into the quarter there was a lot of concern around the geopolitical tension, the conflict that's happening in the Middle East, et cetera. I have to ask you here, Sachin, just thinking about that, the conflict here in the Middle East, what are the implications for Mastercard?
Yeah
exposure there. Any update on how that's playing out and any surprise there?
Yeah, look, I mean, I'll go back to the comments I just made from a driver trend standpoint, right? I'd mentioned at the time of the earnings call that the impact of the conflict in the Middle East was primarily showing up across two vectors. One was in our cross-border travel metrics specific to what you're seeing in the nature of inbound into the impacted countries, let's call it the GCC and Israel, right? Outbound from those countries and travel through those countries. 'Cause remember, a lot of those countries actually happen to be transit hubs as well, so there's travel which takes place. Even though my end destination may not be, the GCC country in question, there was previously travel going on which was taking place through there.
Some of that actually is being changed in the nature of travel routing, which is taking place through other countries.
Right.
Right. The reality is the impact of the conflict is very much there, as you saw in our metrics for the first four weeks of April. I wouldn't say that what I'm observing right now from a trend standpoint is outside of our expectations from what I shared with you two weeks ago as part of the earnings. There's the impact of the conflict on that. Beyond that, what you also see is, it goes back to my comment around higher energy prices, oil prices. What that's translating into is a higher nominal value of spend taking place on gas prices. You can have a little bit of an offset coming through on that.
Again, you know, it's a little bit of a give and get, but on the travel side, you're certainly seeing that impact come through on cross-border.
Yeah, with all of these puts and takes, Sachin, as you're putting together the full year guide, what really matters? What would you emphasize to us? I know the mix is changing. You got some pricing dynamics as well. How would you summarize it for us?
Here's how I'd summarize it.
Yeah.
It's very much in line with what I shared with you two weeks ago. We, when we shared with you our full-year guide two weeks ago, that was very consistent with what we shared with you at the start of the year, right? We kind of held our full-year guide at what we call the high end of low double digits on a currency-neutral basis, excluding the impact of inorganic activity, right?
Yeah.
That's what, you know, we had kind of shared with you. The reason there are these puts and takes is obviously for the reasons we've talked about, which is the conflict. Remember, we had a very solid Q1. We have an assumption which we shared with you when we gave you that guide for the full year, which was around the impacts of the conflict being most pronounced in Q2, and then there being a progressive recovery in Q3 and Q4, right? The most important message I'd like to leave you with is we are an incredibly diversified business. I know people are hyper-focused on cross-border travel. The reality is we have a lot of levers in our business, and you've seen this through COVID, and you've seen this post-COVID.
The business tends to grow, depending on which levers are actually in favor or not. For example, as a company, we have 40% of our revenues coming from services. Our services capabilities continue to be in very strong demand, right? You saw the performance for our value-added services and solutions in the Q1. You know, everything I'm hearing from our customer base, from our sales teams is that continues to be in very strong demand, right? Holistically, I feel pretty good about where we are from a guide standpoint. Obviously, I have no idea what happens from, you know, whether the impact of the conflict gets worse or better between now and the end of the year.
Based on the assumptions I've shared with you, I feel very good about the diversified nature of our business lending to what we've shared from a guide standpoint. The other point I'll share with you is we've shared you've seen our Q1 performance. You've seen our guidance for the Q2. What that naturally implies is that you will see an uptick in terms of what our performance will be in the second half of the year, just because that's just simple math would suggest that to be the case.
I would say, if you went back to last year, you saw that we had tailwinds from FX volatility, which were most pronounced in the Q2, which creates for a tougher comp this year in the Q2, already reflected in the guidance I shared with you, just to be clear, right? You also had tailwinds on FX volatility in Q1 of last year and Q3 of last year. In Q4, that was pretty normalized. My point to you is from a cadence standpoint, as you're thinking about Q3 and Q4, think about the acceleration in the second half being more back-end loaded into Q4 is the other piece I'd share with you.
Okay. No, thanks for going through that. I know it's annoying probably to focus in on.
No, it's good.
some of the things, you know, the diversity of the business, of course, is what matters most, and there's been a lot of cycles and we've seen that. I do think before we get into some of the other, the services and some of the other, the growth pieces, Sachin, this, the balance of trade, the competitiveness of the network business, we've been getting a lot of questions on that. Same question there. How would you characterize the competitive environment today? Have you seen any changes in terms of how deals are coming together?
Short answer is no.
Okay.
You know, we operate in a competitive environment. We've always operated in a competitive environment. I haven't seen a remarkable change in terms of either to the upside or the downside, as it relates to the competitive environment. I suspect part of the reason you're asking that question and getting that question is around rebates and incentives.
Right
What you see in the nature of rebates and incentives. You've got to remember, at the end of the day, rebates and incentives are part of what is the playbook to drive net revenue yield accretion. I think this is really, really important for all of us to understand, right? The idea is for the right kinds of portfolios, which have the right growth potential, where we have the ability to deliver services, we want to pay rebates and incentives to bring that volume onto the system. When you bring that volume onto the system, you have the ability to grow the portfolio at a faster pace, deliver more services to drive that net revenue yield accretion I was just talking about.
Anybody who's tracking our net revenue yield accretion will see that we have been growing net revenue yield, notwithstanding the fact that rebates and incentives are growing faster than where volumes are growing. I think that's really, really important to understand because we cannot miss the larger plot. The larger plot being we've got to drive overall net revenue growth, including services revenue growth. Services revenue growth is highly enabled by what we do on the payment network and winning the right kind of volume there. That's kind of point number one, I'd say, from a competitive environment standpoint. The second point I'd make is rebates and incentives tend to fluctuate quarter to quarter. I say that it's a function of what the pipeline of deals is. It's a function of how volumes are coming onto the system.
It's a function of what we estimate volume assumptions to be for our customers. Oftentimes what'll happen is, remember, we have fixed incentives and we have variable incentives. Fixed incentives are amortized on a straight line basis over the life of the deal. Variable incentives are incentives which are accrued based on what our estimates are of what volumes come on. At any given time, we'll make estimates on volumes, and we'll accrue those incentives from a variable standpoint. But every quarter, we true up that to reflect actual performance. If, for example, last year, right, there was a true-up to the positive on rebates and incentives, let's pick a quarter, in the Q1 or the Q2, it's going to create for a tougher comp in any 1 given quarter.
I would suggest that you don't hyper-focus on rebates and incentives in any one given quarter, but rather take a view on the bigger picture. The bigger picture being, are we doing the right thing in terms of driving net revenue yield accretion, which is what we're very focused on.
Right. That's the punchline. Net revenue yield is up. Even ex services, I think it's up. You're getting the performance I think you want. Look, had to ask the question. Thinking about growth algorithm, I know we obsess over volume growth, you went through a lot of the volume dynamics already. Would you encourage us to look at it maybe a little bit differently from a growth algorithm standpoint? Are there new forces of growth that are coming in that are maybe more important, whether it be to yield or to net revenue or gross revenue?
I think the pillars of growth that we've outlined for you as an investment community and for which we are executing on are still very sound. We've got to continue to do that, which is continue to drive growth in our consumer payments, in our commercial new payment flows, in our value-added service and solutions. Got to drive that secular shift, which is the digitization of flows. I think the interesting things which we are working on today, which don't necessarily manifest themselves in meaningful revenue contribution today, are around the new and different we're doing in the stablecoin space. Let me broaden that out and call it the digital asset space and what we're doing in agentic payments. Literally, this is Mastercard's playbook, and it has been Mastercard's playbook for a while.
We'll execute on everything we're talking about in terms of the here and now, but we're also investing in what is going to be drivers of growth for decades to come, and that's what we're doing right now. To answer your question, we've got to be able to deliver on the opportunity we see today, which is around, you know, consumer payments, commercial, and the value-added service and solutions which we've got in our portfolio, but continue to invest in the new and different which we see. You know, for us, there's a very important role we can play in digital assets. There's a very important role we can play in agentic payments that we're actually very focused on to deliver that long-term growth.
You mentioned agentic, so I'll ask on that. It's a perfect tech conference type question. It does feel like it's an extension of e-commerce in a lot of ways, and we've written about that. You've built a foundation around tokenization, we do think Mastercard will for sure participate. How do you see it evolving within the ecosystem? I know there's a lot of debate around protocols. You're playing a role in that, Sachin.
Yeah.
you know, what should we be tracking to see how this takes off, giving it is early?
Look, I'm going to actually comment with the following, which is we're not going to pick winners and losers. We're going to let consumers decide what is their preferred method of actually shopping. If they want to use agents going forward, we want to be the preferred payment rails if that's what consumers decide to do. That's kind of the starting point. That's the philosophy we as a company have adopted for decades now. That's kind of point number one. Point number two is, as we think about agentic payments, You talked about protocols, right? You have to think about this as there's the commerce layer and then there's the payments layer. There are protocols around the commerce layer.
This is where this requires protocols to be established between the folks who are developing the agents with the merchant community, right, in order to get access to the merchant catalog. Then there's the payments layer and the payments protocols, which is what we define as a network. There has to be interoperability between the protocols we define in the payments layer with that in the commerce layer, which is exactly what we've been doing. Now our issuers are fully enabled for agentic payments across the globe. What do we do? We establish trust. Why is trust a necessity in agentic payments? It is because as a consumer and as a merchant, we need to have payments which are well authenticated, point number one.
Number two, where the intent of the consumer is well recorded, which is where we have, you know, put out there the Verifiable Intent product to allow for that intent to be recorded, and for a registration process for agents in order for that shopping experience to take place in a safe and secure manner. You asked the question as to how we see this evolving. I would argue that that's entirely gonna be determined by consumers. Our view is you will first see human-assisted agentic payments before you will see autonomous agentic payments. I see this as a multi-step process as opposed to all of a sudden a consumer waking up in the morning and saying, "I no longer want to actually be involved in purchasing what I really need.
I'm gonna let some agent make that happen for me. I think what'll happen is the search and discover process, folks will leverage the agents for, as they have been and will continue to do. As it relates to closing a commerce transaction, I think human beings will be involved initially to delegate the authority after they see the shopping basket to the agent to make that final transaction happen. Over time, that'll move into more of an autonomous environment, which is why that trust layer is really, really important. This is why we're very focused on delivering on exactly that. The second piece I'd mention is how, you know, people will oftentimes ask the question on agentic payments, is this just $1 of volume moving from what would have been traditional e-commerce into what is an agentic payment, right?
The reality is, yes, there will be some amount of that. There will be what would have been an e-commerce transaction, which should have gone over card rails, which will go into agentic payments, which will also go over card rails. What it does do is it creates three new opportunities. Number 1, it creates for the potential for multiplication of transactions. The reason it does is because agents will not necessarily be emotionally attached to shopping from the same merchant.
They will look to find what is the most optimal answer. You might end up buying shoes from one merchant and socks from another merchant and a hat from a third merchant if there's an agent which is doing that transaction, compared to a human being who might buy all three from the same merchant, which might result in one transaction. Remember, Mastercard earns revenue both on basis points on volume and cents per transaction, so more transactions result in more revenue for Mastercard. That's number one. Number two, you have the ability to de-derive greater amounts of revenue from delivering more services.
Because as you move away from the more physical interaction which takes place between two human beings when a commerce transaction takes place to now, what is transactions purely taking place between agents, there's a greater need for established trust, there's a greater need for preventing fraud, things of that sort. Greater ability for us to deliver more services to generate revenue. The third piece is around tokenization, which you talked about, Tien-tsin Huang.
which is, every agentic transaction will be a tokenized transaction, so you have a real opportunity there as well.
Yeah. Feel very good that with tokenization and network tokens being deployed, that you'll play a role there. That's the external view on AI and agentic commerce. Thanks for going through that. What about leveraging AI internally, right, at Mastercard? You and I haven't talked about that at length, and I gotta share, we did some benchmarking, Sachin. I don't know if you saw that, but when we scored all of our coverage companies across gross profit or net revenue per employee, Mastercard scored very highly already, so naturally a very productive base already. What else can be done from an AI standpoint, sitting in your seat as CFO? If you're dealing with Michael, what are his priorities on AI?
Look, hyper-focused on doing it the right way, and doing it the right way is important because you wanna do AI not for the sake of doing AI, but because you actually truly believe you can deliver productivity gains and good returns on investment. Here's what I tell you as it relates to Mastercard is, you know, doing a bunch of work leveraging AI around the cost side of the equation. It's certainly happening on the coding side with the engineers. As you know, we do a bunch of work from an engineering standpoint. We're leveraging AI for coding. We're also using it for call center operations. We're using it in the finance operation, for example, for forecasting and things of that sort. There are going to be use cases which are there. I gotta be candid with you.
Right now, all of that's only resulting in the following answer when you ask the question, which is, "Yes, Sachin, we are making investments in AI where we see a lot of benefit. It's resulting in productivity gains." I say, "Translate productivity gains in terms of what is my return on investment," and that is something which still needs to be done. Said differently, what people are saying, as in the employee base is bringing out, is, "We can do more with less, but we can't quite quantify for you what more with less looks like.
Okay? This is important because as a CFO, if I'm sitting in the seat I am, I want to see a return on investment as well, as opposed to someone just telling me, "I would have normally come and asked you in theory for more people, but now I'm not gonna ask you for more people because I'm leveraging AI." I see the value of this. That's why we're investing in it, but I think we've gotta take the next click forward, and I don't think Mastercard's unique in this. I've spoken to a bunch of my peers, across the finance community. Most of us are in the same place, which is it's around we're seeing the productivity gains. We haven't quite seen the delivery in terms of lower costs come to the bottom line quite yet, right? That's kind of point number one.
That's on the cost side. Let's not forget, we have been in the AI space delivering revenue for the better part of a decade, right? We have about a third of our value-added service and solutions products, right, leverage AI, both predictive and generative AI.
That's really important because at the end of the day, you remember we talked about the growth on value-added service and solutions? That's been enabled by our investments in AI, initially in predictive AI, now in generative AI, which is really paying rich dividends, I would argue. Frankly, for a company like Mastercard, I wanna lean in both on the cost side and the revenue side, but I'm hyper-focused on making sure we're doing the right kind of investments for AI to deliver the right kind of products and capabilities to generate that growth on the revenue side of the equation.
Okay. Good. Makes a lot of sense. Thoughtful. Let's pivot a little bit to digital assets and stablecoins. You asked about it. I mean, a lot has changed, obviously, since Michael was here last year. We talked about it. You guys made an acquisition with BVNK. What's the thesis on buying that versus building something or organically? Have your views changed on stablecoin in the last six months or so?
Look, I think for stablecoins, we see this as a net incremental opportunity, particularly as it relates to B2B flows, P2P flows, and me to me. Me to me is basically me loading my digital wallet. Our view is that there will be consumers, again, who will want a certain portion of their assets, which will be in some sort of digital asset, whether it's stablecoins or otherwise.
However, there is going to be a proliferation of digital assets. You might see tokenized deposits, as in tokenized bank deposits. You might see the likes of USDC, USDT, and more stablecoins to come. What that effectively means is you're going to need a central clearing authority from an interoperability standpoint, because not everybody is gonna be vested in the same digital asset. You might want to send me USDC. I might want to receive USDT. Somebody needs to actually play the role from an interoperability standpoint, and this is where BVNK comes into play. What BVNK does, and again, this acquisition still remains to be closed-
we are expecting for that to happen before the end of the year. It has four main capabilities. It has what we call send, receive, store, and convert, and it's exactly what they sound like. Your ability to send stablecoins/digital assets, your ability to receive stablecoins, digital assets, your ability to convert from one stablecoin to the other stablecoin, and your ability to store. We believe that with these capabilities, as this greater proliferation of digital assets, this is gonna be a very interesting new addressable market for us to go into. Their revenue model is actually quite akin to that of what we do as a payment network. It's basis points on the volume, which is either sent, received, converted, or stored, and that's super important.
Initially, I see this taking place in the cross-border B2B space, but I certainly see opportunities around P2P and me to me as well with BVNK.
Right. B2B is probably the most imminent and measurable one.
It's probably the most imminent. I would argue that I think as time goes along and you start to see remittances take place beyond what is there right now, where a business is, you know, remitting funds to another business, you will see consumer remittances as well taking place. If I'm looking to send money, you know, back home to India, and I want to send it using stablecoins, right, BVNK can play a big role in that, and that would be a P2P transaction where Sachin is sending it to his brother, dad, whoever, right? You know, the proceeds. I could do it in fiat. I do it in fiat, right? I could do it in stablecoins as well, and BVNK can play a role in that.
Okay, good. Let's talk about Value-Added Services and Solutions, or VASS, as we all call it. I mean, a lot of what we've talked about fits within VASS. I think Mastercard was very early culturally, I think, in embracing Value-Added Services and Solutions with some of the things you did earlier with Orbiscom, et cetera. My question is more just as that's evolved, and it's gotten quite large, Sachin, how durable is that growth? That's a very common investor question.
Yeah.
How would you address the durability of that, and where are the biggest sources of growth today coming from within VASS?
Okay, I think it's important actually first step back and think about VASS as not being divorced from the payment network. Because at the end of the day, what we do in our value-added service and solutions, the basic raw material is the data we derive from our payment network. The more that we can do to drive more volume onto the system and get more data, the greater we are enabling ourselves to actually be successful on the VASS side of the equation. They're very closely linked.
In turn, our ability to deliver value-added service and solutions powers the payment network because our customers who are delivering these value-added service and solutions appreciate what we bring to them and hence move more payment volume to us. I need to frame it that way because your question around sustainability is a function of what your belief is around our ability to drive sustained growth on the payment network. Approximately 60%, we had mentioned at our last investor day, approximately 60% of our VAS revenues are network-linked. By that, I mean linked to the payment network. What that effectively means is, as you see volumes and transactions grow, card-not-present transactions grow on the payment network, we have attached value-added service and solutions to those transactions, you see a natural tailwind come through from that.
That's kind of lever number 1 to drive growth. Lever number two is increasing the number of value-added services which are attached to each transaction. We have very successfully done that, both organically and inorganically, over the past decade or so. We will continue to do more and more of that because we think there's a greater need for it for our customers. That's what we hear from our customers, and we'll continue to do that, right? Lever number three is around driving deeper penetration across our existing customer base. It doesn't mean every customer buys every solution that we've got, even if it's attached to the payment network, right? We will continue to do that as well. Lever number four, and this is all to your question around sustainability of growth, right?
Is around what we do from a consulting and marketing services practice standpoint. This is the 40% call it, which is not network-linked, but still reliant on the network for the data we get from the network, right? Really important because what it does do is it allows us to help sell what are those network-linked services, so that you have that consulting engagement which goes in there and says, "By the way, you have a fraud problem. Let me help you out with a fraud solution," which happens to be a network-linked solution, right? You gotta do that as well as part of the journey. The last piece from a growth algorithm standpoint for VAS is around expanding our addressable market.
The best example I can give you, and the most recent example I can give you, is the recent acquisition we did of a company called Recorded Future, which is in the threat intelligence space. Completely new addressable market, something Mastercard's not participated in, but has huge synergistic value with what we've got and the nature of data across our payment network. It's all of these building blocks which are helping us drive for value. We talked about tokenization earlier. Tokenization is another big contributor to our value-added service and solutions growth. Just as a reference point, approximately 40% of all our transactions are currently tokenized. That's the good news.
The even better news is that means 60% are not tokenized, which means there's tremendous runway which still remains to drive greater amount of tokenization, to deliver services around that tokenization, which is what we charge for, right? Drive greater revenue growth. We see sufficient number of levers here to see how we can drive that sustained growth from a value-added services and solutions standpoint.
Okay, good. I have to ask, what does this mean for margins then, Sachin? I mean, tokenization we're bullish on as well, penetration story, high incremental margins. Compare that to, say, the consulting business that you mentioned, which is a different margin profile. Is there tension there in balancing revenue growth and the margins that we've come to expect from Mastercard?
Well, look, I mean, I think the biggest disservice we can do to our long-term investors is to actually take a short-sighted view around costs to impinge on our growth to drive longer-term revenues for this company. Let me just kind of frame this whole question around margins around that, right? We've got to continue to invest in the business to realize the opportunities which we've just talked about. On your specific question, I think it'd be short-sighted for us not to grow our consulting and marketing services practice if what that does is enables greater growth of the payment network and enables greater growth of what would be our network-linked revenues. We've got to do it, we've got to do it smartly, and that's what we're gonna do. Does it come with higher incremental costs relative to what might be a tokenized transaction, for example?
Sure it does. For us to actually just say, "I'm only going to chase because I've got an artificial threshold which I've set, and as it relates to what I want to deliver from a margin standpoint," I think would be very short-sighted for us as a company.
Buybacks? There's a little bit of a step up in buyback in the last quarter. I think you talked about a greater appetite to take advantage of the share price being where it is. Is this a change? Is this just opportunistic and structural? I'm just trying to better understand the thinking around buybacks versus M&A.
Our capital allocation priorities have not changed from what we've shared with you in the past. We continue to actually prioritize maintaining a strong balance sheet. The first call of capital will be towards reinvesting in the business to realize the growth opportunities. That'll be both organic and inorganic, right? Then to the extent there's, you know, money to be returned thereafter, that will be returned back to the shareholders with a bias towards buybacks. Certainly, we do dividends as well, but, you know, with a bias towards buybacks. We've always said that we'll be opportunistic, and the Q1 would be a prime example of what opportunistic looks like. We continue to have tremendous confidence in the long-term potential for the business.
We continue to believe that, you know, this is a great time to be opportunistic and exercise greater amount of buybacks, and which is exactly what we did as part of the Q1 here. I mean, all I'll say is we'll continue to be opportunistic going forward.
Thinking about M&A though, same thing around being opportunistic. I mean, you've done BVNK, you mentioned Recorded Future. It does feel like there's a little bit more consolidation going on in the space, and valuations I think are still all over the place. There's some inconsistencies.
I think we'll be active on the M&As front. We will continue to stay active, Tien-tsin. I mean, it's all strategy-led. You know, if it makes sense for us to build it, we'll build it. If it's better for us to buy it, that's what we'll do. In the instance of BVNK, I would tell you know, building what BVNK has built will take a long, long, long, long, long time. There is licenses you've got to get in different jurisdictions. There's the technology to bring. It's about the connectivity they've got with the ecosystem, you know, with the other digital asset providers who are out there. I think that's really important to realize that time to market and being there quickly and being there first is important, in which case we won't be shy to acquire companies.
There's been some dispositions too, though, right, Sachin? As you're thinking about the portfolio, is that a more active place to think about maybe more dispositions?
I, you know, again, we've got to be prudent and, you know, good stewards of capital. To the extent, you know, we do acquisitions. There are some which are successful and there are others which are not necessarily paying off the way we would like for them to pay off. In those instances, I think the right thing to do for us would be to actually exit those which don't necessarily make a lot of strategic sense for us, and that's where the disposition piece will come. We'll continue to do that. We've just got to be very prudent in terms of how we're managing the capital of this company, right? Which is what we've always done and we'll continue to do going forward.
Yeah. Fair to say that you're leaning mostly into the VAS category in terms of content addition.
Yeah, look, I mean, you know, you say that. VAS is a definition which is what I call a created definition, right? BVNK, somebody's told me it's infrastructure, right? I say, "All right, well, you can call it what you want. The reality is at the end of the day" I say it's a created definition only because a lot of what we've done in VAS historically used to be part of the payment network.
Yeah.
Right? I think you've got to kind of just think about what we're doing. Yes, we've been very acquisitive on the, what we now call VAS. We'll continue to do that, but we'll also do stuff beyond VAS is I guess my point, where it'll make sense.
Okay, good. We'll close it out just to get your final thoughts. You know, we've talked about a lot of different things. I'm sure you've been doing meetings.
Yep
here and coming into the conference. What would you underline, Sachin? I mean, what do you think the opportunity is maybe misunderstood or underappreciated?
Look, I mean, here's what I'd say. I'd say we're executing, the strategy is sound. I continue to believe that for those who are patient investors, this is a, you know, it's a great space. It's one where we're very well positioned, and I continue to believe that. I can't tell you whether it's underappreciated or not. What I can tell you is that we continue to see tremendous growth opportunities, and we're capitalizing on that, and you're seeing that in the numbers. You know, the funny thing about everything we talk about is every quarter we print numbers. They happen to be better than what, you know, people expect and we've expected, right? Then there's this, 'But all of this can go wrong.' kind of thing.
The reality is yes, but Mastercard's lived in the world of everything can go wrong for the better part of a decade and some, and it actually demonstrated good performance thereafter. I continue to believe we have to keep our head down, continue to focus, continue to drive, pick up the opportunities, but maintain a healthy level of paranoia. I will not tell you that this company is complacent. I will tell you this company has got a healthy level of paranoia, which is understand what's going on in the ecosystem around you and make sure you're leaning in as opposed to turning your back to what's happening in there. Whether it's stablecoins, whether it's agentic payments, you name it. This has been part of the culture of this company, and we'll continue to do that going forward.
The company is active. There's no doubt about that. Thank you for the update, Sachin.
Thanks.
Always enjoy the conversation.
Appreciate it.
Yep, thank you.