Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard Inc. Q4 and full year 2022 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press Star followed by the number 1 on your telephone keypad. Please only press Star 1 once to queue up for a question, as pressing Star 1 multiple times may affect your position in the queue. If you would like to withdraw your question, press Star 1 again. Mr. Warren Kneeshaw, Head of Investor Relations, you may begin your conference. Thank you, Audra. Good morning, everyone, and thank you for joining us for our fourth quarter 2022 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, we'll open up the call for the Q&A session. 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'll now turn the call over to our Chief Executive Officer, Michael Miebach. Thank you, Warren. Good morning, everyone. Let's get right into it. Starting with the big picture, consumer spending has remained resilient, and we are very well-positioned to capitalize on the growth opportunities ahead. We closed out the year with strong financial results and several notable wins. Quarter four net revenues were up 17% and adjusted operating income up 19%, both versus a year ago, as always on a non-GAAP currency neutral basis, excluding special items. While the macroeconomic and geopolitical environment remains uncertain, we are keeping a close eye on a variety of positive and negative factors. The broadly resilient labor market with low unemployment and rising wages, coupled with elevated consumer savings levels are key drivers of consumer spending. We're also tracking efforts by the central banks to curb inflation, along with moderating energy prices and the reopening of China, so still lots of moving pieces. From an overall consumer spending standpoint, we expect the consumer to be relatively resilient. Spending patterns have largely normalized relative to the effects of the pandemic, with the notable exception of China. In terms of switched volumes, domestic volumes in the fourth quarter remained steady relative to 2019 levels, with some slight moderation in the U.S. related to lower gas prices recently. Cross-border travel continued to recover in quarter four, with inbound travel either flat or up in every region sequentially relative to 2019 levels. As of the first three weeks of January, inbound cross-border travel to all regions is now above 2019 levels. We will continue to monitor the economic environment closely. Should the outlook change, we're prepared to move quickly to adjust our spending levels as we have done in the past. In the meantime, we continue to focus on the things we can control. This starts with our three strategic priorities: expanding in payments, extending our services, and embracing new networks. Here are some examples of how we are progressing in each of these. Starting with payments, we won substantial new business this quarter. Our innovative products, differentiated services, and partnership approach enabled us to secure major portfolio flips, extend relationships, and launch new programs with banks, co-brand partners, and transit systems around the world. I am very excited about our expanded partnership with Citizens to become their exclusive payments provider across all product portfolios in the United States. We will shift their debit portfolio to Mastercard. We will maintain exclusivity on credit and commercial. Citizens selected Mastercard based on our digital assets, open banking capabilities, and safety and security tools. We have also extended and enhanced our long-term partnership with Citi. It solidifies Mastercard as Citi's exclusive global partner for Citi-branded consumer credit, debit, and small business cards. We look forward to continuing to partner to deliver digital initiatives, new technologies, and innovative payment solutions together. We've extended our long-standing relationship with Bank of America across their consumer and small business debit and credit lines of business. They are great partners. We're especially proud to continue as the lead brand for all newly issued small business cards. Our positive momentum with Chase continued this quarter as well. Building up on our recent co-brand, commercial, and Pay-by-Bank partnership announcements, we are excited to announce that we have renewed the Chase Freedom Flex portfolio. Turning to the U.K., we recently extended our credit deal with NatWest Group for consumer and commercial. We're partnering with BELBİM and Istanbul Transportation to convert over 17 million closed loop cards to Mastercards and add 24,000 new acceptance locations across the city. We've partnered with QNB Finansbank and Trendyol, a large e-commerce marketplace in Turkey, with over 30 million customers to launch a new Mastercard co-brand credit product. Now, an important driver of our success in core payments is our ability to deliver innovation and thought leadership. We are designing and deploying innovation solutions at scale. As a result, are the clear partner of choice for our customers. Three recent examples include our work in installments, tokenization, and Click to Pay. Starting off with installments. SoFi launched Pay in 4, becoming the first bank in the U.S. to launch within the Mastercard Installments program. SoFi valued the broad acceptance, strong consumer protections, and permission-based open banking capabilities that all make Mastercard Installments unique. We've got a strong pipeline for Mastercard Installments and plan to add several additional programs across multiple regions throughout the year. Turning to tokenization, we surpassed 2 billion tokenized transactions per month, and for the year, we are up 38%. We're currently enabling digital transactions in over 110 countries. Tokenization helps keep the ecosystem safe and secure across a wide range of use cases. One example that I think is particularly cool is the work we are doing with in-car payments. We're working with car manufacturers and fintechs to integrate payments using our tokenization platform and biometric authentication capabilities. Think about the simplicity it brings for paying for gas, tolls, charging, or entertainment right from your car. This is a great example of Mastercard working with partners to drive the convergence of the Internet of Things, 5G, and addressing consumer demand for cool digital experiences. It also highlights how we're expanding the reach and the value of our acceptance network through new channels to support new use cases. This is just the beginning. Watch for more to come in this space. On Click to Pay, we partner with Adyen to launch Click to Pay on their global payment platform, recognizing the value that it brings to guest checkout to millions of online shoppers. Adyen joins more than 20 other payment service providers around the world, bringing Click to Pay to thousands of merchants globally. The focus on innovation and partnership is also a critical part of our strategy to penetrate the prioritized set of new flows that we outlined at our 2021 Investor Day. We continue to make solid progress. Here are some of examples how we're driving growth in each area. First, disbursements and remittances. Mastercard Send and our cross-border services capabilities are solving for an expanding set of use cases across multiple geographies. For example, we partner with social marketplace platform, Poshmark, to enable seller payouts. For cross-border payments, we've teamed up with Paysend to broaden our global reach and expand the ability to send international payments across card brands. Second, we're deploying digital capabilities to displace cash and check-based commercial payments at the point of sale. Huge opportunity. In France, we signed an agreement with Société Générale to develop their corporate card book. In South Korea, we partnered with KakaoBank and Samsung Cards to launch new debit and credit co-brand offerings for small businesses. The third flow is B2B accounts payable and payments. Our virtual card capabilities provide an effective digital solution to address the working capital, process efficiency, and data challenges that are prevalent in B2B. We are the global leader in virtual card. We're seeing rapid growth in this space. We're bolstering our position through new partnerships and capabilities. For example, we announced plans to partner with Sabre and Conferma Pay to accelerate the use of virtual cards for B2B travel payments. We also signed an agreement with Fintech Partner Extend to offer virtual mobile corporate cards in the U.S. and Canada. Finally, on the consumer bill payment front, we are focused on deploying market-specific solutions to meet unique needs of consumers and businesses. For example, in Norway, we are powering the eFaktura service, which is used by the vast majority of citizens to pay their bills. In 2022, we hit a milestone as over 200 million digitally invoices were sent using eFaktura. As you can see, we're making significant progress expanding in payments. We are excited about the opportunity in front of us. Now, turning to the 2nd of our 3 strategic priorities, services. Services provide differentiation and diversification for Mastercard. Our strategy is to leverage our services to drive growth in the core and to expand into new segments and use cases. We're making steady progress on both and have significant opportunity for future growth. Our services continue to drive growth in the core, as evidenced by our wins and extensions with Citizens, Citi, NatWest, and others, as I mentioned earlier. 1 example of a service that enhances the value of payments is Consumer Clarity. The service provides cardholders with merchant details and digital receipts to reduce disputes, no chargeback costs, and improve the consumer experience. We recently partnered with TSYS, who will offer Consumer Clarity to over 25 million cardholders in the U.S. and the U.K. In 2022, we signed up over 50 financial institutions and merchant partners for Consumer Clarity, including large issuers like Itaú in Brazil. We're also expanding our services to new segments and new use cases, including governments, retailers, digital partners, and financial institutions. This quarter, we partnered with research and consulting firms, including Ifo and CIMA in Germany, as well as the Barbados Ministry of Tourism and International Transport to provide governments with detailed insight into tourism and retail spending trends. We engage with retailers like Lowe's, who are leveraging our Test & Learn capabilities to conduct analytics on their core business. We partner with large fintechs like Monzo in the UK to advise on product development strategies. We are deploying our personalization solutions, which we acquired through Dynamic Yield, across a range of retail and financial institutions, including Carrefour Argentina, Hype, Cencosud, to enhance and scale their personalization efforts. I'm very encouraged by the continued momentum in our services growth strategy and the differentiation and diversification that these capabilities bring. I'll now move on to our third strategic priority, which is embracing new networks, namely open banking and digital identity. This quarter, I'd like to highlight an example of how our open banking capabilities have come together with our other strategic priorities to offer a new solution. As I mentioned earlier, in Q4, JPMorgan Payments and Mastercard announced an innovative Pay-by-Bank solution. The solution utilizes the Mastercard open banking platform to modernize existing ACH payments and allow customers to pay bills from their bank account in a frictionless manner. Pay-by-Bank offers choice and provides a simple and secure experience for billers and merchants, as well as consumers by enhancing existing ACH transactions. This deal is a manifestation of our multi-risk strategy. It expands our addressable market via open banking capabilities, and it deepens our relationship with JPMorgan Chase. We're actively working with them to take the solution to market this year. We also continue to make great progress with open banking in Europe. Mastercard is connected to more than 3,000 banks and financial institutions across 18 markets to power their open banking efforts. This quarter, we partner with Secure Trust Bank in the UK, who will leverage our open banking capabilities to provide safe and convenient ways for their customers to repay retail loans directly from their bank account. In summary, we delivered another strong quarter of revenue and earnings growth, aided by a resilient consumer and a continued recovery in cross-border travel. In payments, we won substantial new business this quarter, including Citizens. We're expanding our differentiated services and embracing new networks, including leveraging our open banking capabilities to power solutions like JPMorgan's Pay-by-Bank. With all that, we're well-positioned for the opportunities ahead, and we'll manage the business with agility should the macroeconomic outlook change. Sachin, over to you. Thanks, Michael. Turning now to page 3, which shows our financial performance for the quarter on a currency-neutral basis, excluding special items and the impact of gains and losses on our equity investments. Net revenue was up 17%, supported by resilient consumer spending and the continued recovery of cross-border travel relative to 2019 levels. Acquisitions contributed 1 PPT to this growth. Operating expenses increased 13%, including a 3 PPT increase from acquisitions. Operating income was up 19%, which includes a 1 PPT decrease related to acquisitions. Net income was up 16%, which includes a 2 PPT decrease related to acquisitions. EPS was up 19% year-over-year to $2.65, which includes a $0.06 contribution from share repurchases. During the quarter, we repurchased $2.4 billion worth of stock and an additional $590 million through January 23, 2023. Let's turn to page 4, where you can see the operational metrics for the fourth quarter. Worldwide gross dollar volume or GDV increased by 8% year-over-year on a local currency basis. On the same basis, if you exclude Russia from the prior period, GDV increased by 14%. In the U.S., GDV increased by 7% with credit growth of 14%, reflecting in part the recovery of spending on travel. Debit increased 1%. Excluding the impact of the roll-off of a previously discussed customer agreement, debit increased approximately 5%. Outside of the U.S., volume increased 8%, with credit growth of 9% and debit growth of 7%. Cross-border volume was up 31% globally for the quarter, reflecting continued improvement in travel-related cross-border spending. Turning now to page 5, switch transactions grew 8% year-over-year in Q four. Excluding Russia from the prior year, switch transactions grew 18% year-over-year in Q four. Card present and card not present growth rates remained strong. Card present growth was aided in part by increases in contactless penetration in all regions when excluding Russia. Contactless now re-represents 56% of all in-person switched purchase transactions. Card growth was 5% or 9% if we exclude cards issued by Russian banks from the prior year card count. Globally, there are 3.1 billion Mastercard and Maestro branded cards issued. Let's turn to page 6 for highlights on the revenue line items, again described on a currency neutral basis unless otherwise noted. The increase in net revenue of 17% was primarily driven by domestic and cross-border transaction and volume growth, as well as growth in services, partially offset by growth in rebates and incentives. Acquisitions contributed 1 PPT to this growth. Looking quickly at the individual revenue line items, domestic assessments were up 6% while worldwide gross dollar volume grew 8%. The difference is primarily driven by mix. Cross-border volume fees increased 40% while cross-border volumes increased 31%. The 9 PPT difference is primarily due to favorable mix as higher yielding ex-intra Europe cross-border volumes grew faster than intra-Europe cross-border volumes this quarter. Transaction processing fees were up 16%, while switch transactions grew 8%. The 8 PPT difference is primarily due to favorable mix, FX-related revenues, and pricing. Other revenues were up 16%, including a 1 PPT contribution from acquisitions. The remaining growth was driven primarily by our cyber and intelligence and data and services solutions. Rebates and incentives were up 18%, reflecting the strong growth in volumes and transactions and new and renewed deal activity. Moving on to page 7, you can see that on a non-GAAP currency neutral basis, excluding special items, total adjusted operating expenses increased 13%, including a 3 PPT impact from acquisitions. Excluding acquisitions, the remaining increase was primarily due to higher personnel costs to support the continued execution of our strategic initiatives, partially offset by lower advertising and marketing costs. Turning to page 8, let's discuss the operating metrics for the first 3 weeks of January compared to Q4, 2022. Each of these metrics, with the exception of cross-border card-not-present, excluding travel, were favorably impacted by the lapping of the slower growth that occurred in January 2022 related to the Omicron variant. Switched volumes grew 21% year-over-year, up 7 PPT versus Q4. Switch transactions grew 12% year-over-year, up 4 PPT versus Q4. Cross-border volumes grew 42% year-over-year, up 11 PPT versus Q4, driven by cross-border travel growth of 84% year-over-year, up 25 PPT versus Q4. Cross-border card-not-present, excluding travel, grew 10% year-over-year, up 2 PPT from Q4. A couple of administrative notes. For your reference to help you understand the trends in the business, ex-Russia, we have suspended... where we suspended operations in March 2022, we have included an appendix later in this deck to show all the data points from this schedule if you excluded activity from Russian-issued cards from prior periods. Additionally, as the impacts of the pandemic recede, going forward, we will no longer provide operating metric levels as a percentage of 2019. Turning now to page 9, I wanted to share our thoughts on the upcoming year. Let me start by saying that I believe that we are well-positioned to address the significant growth opportunities at hand. We have established a clear set of strategic priorities and are making steady progress against each of them. This is evidenced by the many wins across the products and services Michael has discussed on this call and over time. On the macroeconomic front, as Michael laid out, we are monitoring a number of both positive and negative factors. We do expect consumer spending to hold up relatively well in this environment, driven in part by the strong labor market. It is important to remember that we are coming off a year of strong growth as we lap the effects of the pandemic, and we expect our go-forward growth rates to moderate accordingly. From a cross-border travel standpoint, most regions have recovered and are well above 2019 levels in Q4. The exception is Asia, where there is still room to improve with the China reopening. Just a little further context here. China represented about 1% of inbound cross-border travel volumes pre-pandemic in 2019. In Q4, this volume was at approximately 20% of Q4, 2019 levels. Similarly, China represented about 2% of outbound cross-border travel volumes pre-pandemic in 2019. In Q4, this volume was at about 50% of Q4, 2019 levels. With this in mind, our base case scenario for the full year 2023 is for net revenues to grow at the high end of a low double-digit rate on a currency-neutral basis, excluding acquisitions and special items. This growth rate would be higher by approximately 1.5 PPT if you exclude Russia-related revenues from 2022. Acquisitions are forecasted to have a minimal impact to this growth rate, while foreign exchange is expected to be a tailwind of approximately 1 PPT for the year, primarily due to the recent strengthening of the euro relative to the US dollar. In terms of operating expenses, we will continue to carefully manage our expenses as we invest in our payments, services, and new network priorities to drive short and long-term growth. For the year, we expect operating expenses to grow at the high end of a high single-digit rate on a currency-neutral basis, excluding acquisitions and special items. Acquisitions are forecast to add about half of a PPT to this growth, while foreign exchange is expected to be a 1 PPT headwind for the year. Turning now to the first quarter. Year-over-year net revenue growth is expected to be at the low end of a low double-digit rate, again, on a currency-neutral basis, excluding acquisitions and special items, and reflects generally resilient consumer spending. A couple of points to note. Q1 will be the last quarter in which we experience the lapping effect of our decision to suspend operations in Russia in Q1 of 2022. We expect cross-border volume growth in Q1 2023 to be elevated as a result of the effects of Omicron in Q1 2022. Acquisitions are forecast to add about a half a PPT to this growth, while foreign exchange is expected to be a headwind of 2 PPT for the quarter. From an operating expense standpoint, we expect Q1 operating expense growth to be at the low end of a high single-digit rate versus a year ago on a currency-neutral basis, excluding acquisitions and special items. Acquisitions are forecast to add about 2 PPT to this growth, while foreign exchange is expected to be a tailwind of approximately 1 PPT for the quarter. Other items to keep in mind. On the other income and expense line, we are at an expense run rate of approximately $100 million per quarter given the prevailing interest rates and debt levels. This excludes gains and losses on our equity investments, which are excluded from our non-GAAP metrics. Finally, we expect a non-GAAP tax rate of approximately 18% in Q1 and 18%-18.5% for the year based on the current geographic mix of our business. With that, I will turn the call back over to Warren. Thank you, Sachin. Operator, we're now ready for the Q&A session. Thank you. At this time, I would like to remind everyone in order to ask a question, press star then 1 on your telephone keypad. Please only press star one once to queue up for a question as pressing star one multiple times may affect your position in the queue. We'll go first to Harshita Rawat at Bernstein. Thank you. Good morning. Michael, Sachin, I want to ask about Pay-by-Bank. Over the years, you've developed and acquired capabilities for Pay-by-Bank in different countries. You talked about this new partnership with JPMorgan, but a skeptic could also argue that Pay-by-Bank is a risk to cards longer term, and there's some precedent in certain countries. Can you talk about the push and pull forces here and also maybe touch upon where does Pay-by-Bank being used versus cards, and how is Mastercard able to participate in those transactions? Thank you. Right. Harshita, let me start off on that. The way we think about this is in the end it is about delivering choice to consumers, choice to merchants, and choice to banks, and we are therefore in all relevant ways to pay. It's also true that the card ecosystem over the years has driven tremendous value. It is a prevalent way to pay for many use cases. On the side we have alternative payment methods emerging, and we look at those as options to go after new use cases. That's exactly what happened here in the context of our partnership with JPMorgan. This is focused on existing ACH payments which are not bringing the value to the biller or the consumer that they are looking for. Very specifically what we're doing here, the issue with some of these account to account payments is you never really know what balance is on the account. Our open banking capabilities are really providing a payment success factor here that tells the biller this is a good time to debit this particular account. A true value brought that somebody is willing to pay for, in this case, the biller/the merchant. A good example of where there can be value created in alternative payment tools, while this doesn't take away from the power that cards are bringing to consumers and merchants. We see this as coexistence. Where this is going over time, we don't quite know, but our multi-rail strategy positions us well to play in either field. Thank you. Thanks, Harshita. We'll move next to Darrin Peller at Wolfe Research. Hey guys. Thanks. Nice job on the quarter end of the year. When we look ahead, and we're looking at the trends you're showing us for January, even despite easier comps on Omicron, it does look like you have pretty conservative assumptions built into the guide for the year for top line growth of low double digits. Just given the trends we're seeing even beyond for January, but ex Russia, you anniversary that after March and the numbers go materially higher growth rates. Can you just tell us if there's some building blocks like around what you're assuming on macro from today's macro activity going forward and maybe rebates incentives? Is that a factor here? Thanks again, guys. Sure, Darrin. Good morning. Let me provide you a little bit of color here. Look, I mean, what we've generally assumed in our, in our base assumptions that I mentioned, when I was delivering my prepared remarks is resilient consumer spending through 2023. I mean, we see a resilient consumer today, and we're seeing a generally resilient consumer spending pattern going forward in our base case. The other thing which we've contemplated is as we mentioned from a cross-border standpoint, and particularly cross-border travel standpoint, the vast majority of the regions have now reached that state where they are kind of growing and growing at a healthy pace, but they're not growing at an accelerating pace. Let me give you a little bit of color here. You remember, as we are coming out of COVID, right? Inter-Europe came back from, first cross-border standpoint. After that we saw several inter markets come back from a cross-border standpoint, U.S., U.K., Canada, Latin America, all of those. All of those are growing at a healthy pace, and we're assuming they'll continue to grow at a healthy pace, but not at an accelerating pace. The one area where we are assuming a, an increase in terms of growth is around Asia Pacific. I mean, Asia Pacific has been a lagger in terms of recovery of cross-border travel, and we're expecting that there will be with the borders recently opening in several markets in AP that there will be some level of recovery which will come through there when you index back to 2019. That's kind of generally been the base case we've kinda assumed., look, I mean, it to be perfectly honest with you, I think the reality is we've got things which are helping us from a share win standpoint. We've got strong consumer spending. Our services capabilities continue to grow at a healthy pace. All of that is built into our guide as we go forward. Also remember that in 2022, we did have elevated levels of FX volatility, which were there in the market, which actually supported the growth rate which we had in 2022. It's hard to predict what that looks like on a going forward basis. We do our best assumptions on that from an FX volatility standpoint. That's kind of the building blocks as to how we've gone about building our business. The last point I'll make is around rebates and incentives. You asked the question. As you can see... Yeah ... quarter-over-quarter we talk about how we are delivering wins. We are winning with new customers. We are expanding our business with existing customers,. We are building in assumptions from a rebates and incentive standpoint, which would be consistent with what you're seeing in our track record from a winning standpoint as it relates to us. Right. Okay. Thanks a lot, Sachin. Sure. We'll go next to Lisa Ellis at SVB MoffettNathanson. Hey, good morning. Thanks for taking my question. Michael, I wanted to follow up. In your prepared remarks related to new flows, you highlighted the B2B POS payments as a notable opportunity area and highlighted a few new SMB co-brand wins there. Can you just talk a little bit more holistically about this opportunity? Remind us, A, how big it is, and then, B, what's different about it?, what do you have to do differently as Mastercard to capture this opportunity relative to the consumer side? Thank you. Right, Lisa. The opportunity here lies really in taking our existing set of tools, namely, the, from the card ecosystem, very specifically, the virtual card capability, which came through an acquisition many, many years ago that we've now built out and turned ourselves into the leader here. This existing set of tools and a huge opportunity in terms of flows to be addressed and make them more efficient, we're looking at $14 trillion from an opportunity perspective. If you recall what we laid out across the four flows, new flows, this is the one of the large ones here that we quoted. The way to go about this is really to say, "All right, who are the different players that we already have in our ecosystem?" We bring VCNs into. There's a lot of deals with financial institutions, but there's also a lot of deals with partners out of the travel space, and the travel space is really the one that's been most promising for us, and that is coming back right now. This is a near-term opportunity. Cash and checks dominated existing tools, existing partners. This is right for us to go after it, and we're leaning in. Lisa, maybe I can just add a little bit out here, particularly as you, as you think about the virtual card opportunity which Michael just talked about., there's differentiation which is provided by technology, which is what Michael talked about, by virtue of the acquisition which we had with our virtual card capabilities. There's also differentiation in terms of our approach from a go-to-market standpoint. Specifically, when you target flows from a go-to-market standpoint, you go on a vertical by vertical basis. As, we've been very successful in the travel vertical. Part of the reason we've been successful in the travel vertical is having a deep understanding of what it takes at the travel integrator level to be able to embed your technology there so that you are the payment choice, which people will exercise when they have to make those payments. Similarly, as we look at that opportunity going forward, there are several other verticals we're making those similar kinds of advances in. That's specific as it relates to the VCN piece. You also asked about small business and the commercial point of sale opportunity which is there. The reality is we've been winning significant new deals in that small business opportunity, and we see candidly a very sizable market opportunity in commercial point of sale. A large part of that is still in cash and check. The reality is, just like we did in P2M, where we displaced cash and check utilizing digital technologies and innovation, that's kind of the advances we're making also in commercial point of sale. That's how we kind of see and frame the opportunity set across both of these areas. You can hear it helps to have a CFO that used to be the head of our commercial products. Terrific. Thank you. We'll go next to Tien-Tsin Huang at JP Morgan. Hi. Thank you. Good morning to everyone. I wanted to ask just big picture if you would characterize visibility here for us on revenue versus, I guess we can go back to pandemic or pre-pandemic. Just curious on visibility, given you mentioned lots of moving pieces. Then same thing on expenses. You said in the prepared remarks here that you're prepared to adjust investments if necessary. If the base case and the outlook here is to show some operating leverage, can we assume the same operating leverage if revenue weakens relative to expectations? Sorry for the long question. Sure, Tien-Tsin. On your question around revenues, it's like I laid out, right? I mean, at the end of the day we've put our base case together. We've kind of laid out what our assumptions are from a base case standpoint., at the end of the day, we don't have the crystal ball to actually suggest that that is the way things are gonna play out. Based on everything we're seeing in the nature of current trends as well as leading indicators, particularly as it relates to the overall strength of the labor market, we feel pretty good about what we're seeing from a base case standpoint as it relates to the outlook for revenues. , as it relates to one component of revenues which we oftentimes think about is around on an as reported basis versus what it is on a currency neutral basis, very hard to predict where foreign exchange markets go. Again, we've seen recent strengthening of the euro take place, and that's what we've kind of shared with you in terms of our assumptions from an FX standpoint. Then you asked about operating leverage. Look, I mean, the reality is we've always operated with the philosophy of delivering positive operating leverage over the long term. We look at the top line. We look at how our expenses are pulsed against that top line. We have, in the past, demonstrated, our capability to modulate our expenses to the extent we start to see adverse impacts take place on the top line and vice versa. The reality is, what we don't want to do is impact the long-term growth potential of our business. We will continue to invest in our business. With our eye on the long term, we'll be prudent about, not going into spaces or an OPEX standpoint, which are not in demand. Obviously, I'm kinda stating the obvious here. The reality is the philosophy remains unchanged. We will look to deliver positive operating leverage as a company, and we have the tools and the ability to actually modulate expenses if we feel like the top line growth is gonna get impacted over the long term. Perfect. Thank you. We'll go next to Sanjay Sakhrani at KBW. Thanks. Good morning. First off, I'm glad we're getting rid of the relative to 2019 metric for good reason. Just a question on cross-border and sort of the operating assumption this year. I know there's a number of different trends that you guys talked about, but there's still a decent amount of pent-up demand. I guess how do you think cross-border travel behaves in a, in a backdrop where macro might get worse from here?, maybe you could use some historical precedent here. Maybe just give us sort of how you're thinking about it. Thanks. Sure. Sanjay, let me share a few thoughts on how we think about cross-border. At the end of the day, there are numerous things which impact how people travel and spend in the cross-border environment. At the outset, what I wanna say is that the fundamentals around the cross-border proposition as delivered by Mastercard actually stand to be very sound, just like they were in the pre-pandemic days. We said this through the pandemic, and it's played out in that manner. Let me get a little bit more specific as it relates to pent-up demand, your question around pent-up demand. Look, the reality is we all know from what we hear on the earnings calls of airlines that capacity is constrained from an airline standpoint. With that constrained capacity and elevated prices, you're seeing that impact come through when you do P times Q, which is price multiplied by quantity, you get kinda what the resultant impact from a spend standpoint is. Fast-forward, as capacity comes back online, one would expect that there will be some level of adjustment in prices because the demand supply equation gets a little bit more in equilibrium. Overall, we're not assuming that that necessarily results in a tailwind because capacity comes back online, right? Because there's gotta be an adjustment which takes place from a price standpoint. Our view, again we hope we're wrong, and we hope cross-border spending kind of goes with more capacity, prices remain elevated and people continue to spend. We've got to take a point of view on that, and that's what we're taking. The other point I'll make is as it relates to what the impact of FX rates is on cross-border and cross-border travel. Well, the reality is what we've seen historically is that when exchange rates move, for example, with the dollar strengthening, with the lag effect, you would tend to see inbound into the U.S. get impacted. That's only natural. It gets more expensive for people coming from different parts of the globe to come into the U.S. What we've also seen is individuals tend to then redirect that cross-border spend to other parts of the globe where they don't feel the impact of that come through. Movements in foreign exchange rates does have an impact on how we think about cross-border going forward. Just to add one point here, Sanjay, that is over the last two years we've been winning portfolios in the space. We've really focused on the space expecting to come back. If you recall, let me just remind everybody here, across airlines, across travel, online travel agencies, across lodging, across other forms of transports like trains, Marriott, Virgin Atlantic, Amtrak, JetBlue, Cathay Pacific, British Airways, and so forth, we have won portfolios, and we've bolstered that in terms of market access through these partners with additional products. There's Mastercard Travel Rewards out there, which is now in 80 countries. We believe into the macro eco-economic environment that Sachin just laid out, we have the better proposition. It remains an exciting space. The pace in which we'll grow, we'll have to see. That is characterized by what Sachin just said. We certainly have a differentiated proposition in that. One last comment I wanna make, Sanjay. Yeah, I'm happy you're excited about metrics, and how we're changing the metrics. From a metrics perspective, I wanna complete, back to Lisa's question earlier. I mentioned the $14 trillion on commercial POS, but there's also $24 trillion on accounts payable, which makes the total opportunity in this combined space $38 trillion. That conversation earlier was an important one, on a very big part of our priorities. Thanks. We'll go next to Jason Kupferberg at Bank of America. Hey, thanks, guys. Really appreciate the China cross-border data you gave there for both inbound and outbound. I think you said that inbound is running at about 20% of 2019 levels in the fourth quarter and outbound at about 50% of 2019 levels in the fourth quarter. Can you give us a sense of how much improvement you're expecting in those metrics in 2023 as the reopening progresses? Separately, can you just make any high-level comments on growth for each of your three strategic pillars in 2023? Thank you. Sure. First, Jason, I'm not gonna share specifics as it relates to how we built our model up for the full year. What I will share with you is as it relates to the recovery of both inbound and outbound for china we have built in some level of recovery as the year progresses. It's our best estimate as to what we expect to happen by virtue of the borders opening and the quarantine requirements being lifted. Suffice it to say that the opportunity is pretty sizable. The fact that we were in Q4 at 20% of 2019 levels from an inbound travel standpoint, cross-border travel standpoint is just suggestive of the fact that if you just think about what's gone on in other regions and how they've recovered and bounced right back and gone well above 2019 levels, there's a significant opportunity both on inbound and outbound as it relates to China. Sorry, the second part of your question, Jason? Just the, three strategic pillars, what you're modeling for revenue growth on those in 2023? Again, I mean, when the strategic priorities, we've got payment services and new networks as Michael's talked about. I mean, I'll give you a general sense. I mean, about from a payment standpoint, we've been doing this for many decades., that is a substantive part of how we deliver our revenue growth. Over the last decade, we've shown you how services have grown and still growing at a healthy pace. In my view, the demand for our services capabilities still remains very strong. You've seen that we've been growing at a faster pace in services relative to the overall growth of our business, I don't think we should assume anything different on a going forward basis. New networks is relatively nascent, really. , again, I would put that into the space of it's growing, it's growing off a small base at a very healthy clip. The reality is, on the overall Mastercard, it's still to have a meaningful impact. That's kind of the best I can share with you on that. Jason, as the model really is one not of separate pillars. This is an integrated business proposition where services differentiates payments. Payments is oftentimes a way to build out a further, a broader set of services and so forth. It kind of goes in a circle, a virtuous circle, I have to say. When you look at it historically, we gave you a number a couple years ago that services a third of our quarter. It has been growing faster. I gave you an example earlier in my prepared remarks on Consumer Clarity, which is something that is transaction related, and it's growing faster with 50 new issuers. There's a lot of momentum in there. There's also the kind of services that are not related to the underlying payments business. For example, the example I gave you on Test & Learn, where we're working with a set of customers to work on their base core business as in Lowe's, the example that I gave you. Different sets of dynamics, but they go hand in hand, and that is the power of the differentiated and diversified business model that we have. I appreciate it. Thank you, guys. We'll move next to Rayna Kumar at UBS. Rayna, are you on mute? Operator, let's go to the next and try to get Rayna back on the line. Operator, are you there? Yes. We'll go next to Will Nance at Goldman Sachs. Hey, guys. Good morning. Maybe I'll squeeze one last 2019 versus 2019 question before the metrics go away. When we look at some of the kinda moving pieces in December, it seems like across some of the metrics, things seem to take a little bit of a step down on the 2019 stack. Just any color what you're seeing on a regional basis between kind of e-commerce and travel and how those trends have kinda continued into January, maybe excluding some of the impacts of China that you're seeing. Then just a more numerical piece of that question as i appreciate the color you gave on the China metrics on inbound and outbound travel. Just wondering if you have any color on just the overall contribution of China to cross-border volumes. All right. Well, I'll take your questions in order out here. You talked about some color around how we're seeing things shape up in Q4 relative to 2019 levels. We're actually seeing pretty stable levels as it relates to switch volumes, switch transactions and cross-border. In fact, marginally up on each one of them quarter-over-quarter. For example, in switch volumes in Q3 as a percentage of 2019, we are running at 154%. In Q4, we're running at 156%. You can see this in the slide, in the slide deck which we shared with you. , the one thing to just keep in mind is, in the U.S. in Q4, we have seen a little bit of an impact come through from lower gas prices, and that's kind of being reflective, reflected in the numbers you see right here., you asked the question from a regional color standpoint. I'd say there's remarkably consistent growth that we're seeing in most regions. For example, in europe Europe continues to hold up pretty well. Latin America and EMEA are also actually holding up pretty well from a growth standpoint. In Q4, China was impacted to the negative, particularly in its domestic volumes. Again, remember our domestic, we don't generate a lot of revenue from the domestic side, but it was impacted negatively because of the flare up in the COVID situation which took place there. That's one piece to keep in mind. Another piece to keep in mind is that from a India standpoint, now that we're out of the embargo and we've started new issuance, you still have the tail effect of the embargo coming through. Said differently, the fact that you actually for a year were not issuing new cards in India has a resultant impact of accretion of old cards which are taking place, which need to be more than compensated for by issuance of new cards, and that takes time as issuers get ramped up and ready to go. You've seen that come through in Q4 as well. , but beyond that, I would say that We continue to see pretty good and consistent growth relative to 2019 levels across all our metrics here. A step down compared to last year and the year before is of course there because you get the mathematics and the lapping effects and so forth. To 2019, I think that's an instructive view here that tells us that, yes, we're expecting a resilient consumer connect will continue to spend. , Will, you'd asked a question about China, and in my prepared remarks I had shared with you that China inbound, cross-border travel pre-pandemic was roughly 1% of our total, corresponding volumes. Our outbound, the similar metric from an outbound standpoint was about 2%. I know that was the second part of your question. We'll move next to David Togut at Evercore ISI. Thank you. Good morning. Europe continues to be a driver of differentiated growth for Mastercard. For the year ahead, could you talk through some of your assumptions on the biggest opportunities in Europe, Germany, Poland, Italy, when you think about both economic outlook and cash digitization?, we've seen mixed reports six, nine months ago, more concern about Europe given high gas prices. Seems like the outlook has been a little better with lower gas prices and a more mild winter. Any insights would be greatly appreciated. David, let me start off on that., looking at Europe really in three categories, there's the U.K. on one hand, and there's emerging Europe, and then there is continental Central Europe, and slightly different picture on all of them. First of all, starting off with the continent. Here the concern has been around for a while on rising gas prices and energy prices and the impact on the consumer's ability to spend. A combination of fiscal measures to provide cushions to consumers along with energy saving measures along with the gas storage now reaching full capacity has really alleviated some of these concerns. We continue to see a fairly resilient European consumer. That's our base assumption as we look forward. U.K.'s a somewhat different economic outlook, and there might be a little more shaky there, but fundamentally in this market we are seeing a lot of tailwind for us from share gains over the last couple years. That works well for us. Emerging Europe continues to be a dramatic digitization opportunity as we've seen in markets like Russia, which unfortunately is not in our P&L any longer. We have seen very high digitization rates as we're pushing that in these emerging markets. Somewhere in between, there's peculiarities like Germany, where there was a significant digitization opportunity and there still remains, but we caught up a lot in Germany over the last two years, particularly on the contactor side, which is now reaching half of the transactions there. Healthy mix in Europe and very strong share position with opportunities to come through from portfolio wins that we have shared with you over the last couple of years as they go into effect. I'll just add, David, to Michael Miebach's point around the deals which we've recently won and announced. Just to give you a little bit of perspective, we had talked about Santander historically. That migration is in progress, and we're through the bulk of a 9 million card migration there. We expect to be complete by early 2023 on that one. NatWest commenced the issuance of Mastercard debit cards in December of 2021. That's well underway, and we would expect some of that to continue to happen in 2023. The other one we had spoken about historically was Deutsche Bank, and we expect that the migration on one will commence somewhere in the middle of 2023. Just to give you a little bit of sense as to how we're kind of thinking about things. Yeah. Thanks so much for all the great detail. Much appreciated. Sure. We'll move next to Ashwin Shirvaikar at Citi. Thank you, Nicole. Thanks, Sachin. I just wanted to drill into a couple of things, now that we're getting rid of 2019, over the past few years. Looking forward, what has changed in terms of the growth algo? How should we think of that as we think of normalized growth visibility? Then there's a smaller question with regards to specifically for 2023, the spread between VALs and RAVs. How should one think of that? I'm gonna need a little bit more clarity on the second part of your question, but we'll get to that. Let me take the first question first, which is as it relates to the growth algorithm. Just suffice it to say that the fundamentals of our business actually are very, very sound. The growth algorithm, which has actually enabled the strong growth we have delivered pre-pandemic, very much stands sound even today. The reality is if you think about PCE growth, you think about the opportunity for the secular shift to electronic forms of payment. You think about the fact that we're growing market share. You think about how we're delivering on our services capabilities and driving growth from that. Now as we're doing new and different things around new payment flows as well as new networks, that growth algorithm actually is very sound, very stable, very consistent with what we've historically had., that's the way we think about the business for call it not only the near term, but near, medium to long term for Mastercard. Ashwin, I'm not sure I got the second part of your question. Could you repeat that, please? Yeah, I was asking about the cross-border volume spread. How should one think of that as we think of this year? Look, I mean, our cross-border proposition is very sound and stable., I think at the end of the day, like I said, most of the regions are now back to what I would call their stable growth rates as we would normally have seen in the pre-pandemic phase. The one exception is Asia, there's a little bit of opportunity which we have in Asia, which we've contemplated in our calls for 2023. Thank you. We'll move next to Ken Suchoski at Autonomous Research. Hi. Good morning, Michael and Sachin. Thanks for taking the question. I wanted to ask about the cross-border recovery. We see the volumes for cross-border travel are well above 2019 levels., where are you seeing the transactions versus 2019 levels on that same metric? Sachin, you made some interesting comments on price versus units, and I'm just trying to get a sense for how much the cross-border travel volumes are benefiting from inflation and spend per transaction and how much recovery is still left from a number of transaction standpoint. Thank you. Sure, Ken. My comment's actually gonna hold true for not only cross-border, for largely for the business if you think about it, right? our transactions or the growth in our transactions is impacted by our average ticket size. There are puts and takes on the average ticket size, not only on cross-border, but even on domestic, which are influenced by numerous factors, one of which is inflation. The others are the mix between card present and card not present. Because what happens is typically with more card not present, you tend to see a higher average ticket size, which results in lower transaction growth rate. Now that being said, also when you do more card not present, you have the opportunity to deliver more services. When you deliver more services, it allows you to actually have a compensating effect from a revenue standpoint. I think those are two important things to keep in mind. The third, I would say from an average ticket size standpoint, which impacts both cross-border and domestic, is what is the regional mix? Because different countries have different average ticket sizes, which influences what the growth rates are. Specifically on cross-border average ticket, it has been pretty stable year-over-year. Our assumption as we kinda think about this is not knowing perfectly well where inflation's gonna go, and the variables I kinda talked about, those are the things we factor into our assumptions as it relates to transaction growth on a going forward basis. Okay. Thanks, Sachin. Sure. We probably have time for one last question. We'll take that question from David Koning at Baird. Yeah. Hey, guys. thanks. Maybe just to go back a little bit to Q1 guidance. You talked a little bit about this, I know revenue you've got on a non-GAAP basis decelerating something like 5% or so. Every metric, every core metric in January accelerated by kind of 4%-11%. Is there just tougher comps coming on some of those key metrics or is it rebates? Maybe talk to a little bit about the GAAP and kinda what's gonna happen the rest of the quarter. Sure, Dave. couple of thoughts. 1, in Q1, acquisitions contribute less to our Q1 growth than they did to our Q4 growth because you're doing a sequential comparison between Q4 and Q1 in your question there. Number 2, the suspension of operations in Russia has a greater impact in Q1 than it does in Q4. it's just the way the cadence of the revenues are. Two other points I'd point out is Michael talked about the several wins we've got in the active deal activity which is, which has been in play. We've got to contemplate all of that in our, in our Q1 kind of thoughts. The last piece I'd mention is we did have elevated levels of FX volatility in Q4. I don't know where FX volatility is gonna play out. We've done our best assumptions around that, but those would be the contributing factors. Gotcha. Thank you. Sure. Great. Michael, any final comments? Yes. Thanks for your questions. Thanks for your trust. Rayna, we will figure out your questions offline. We couldn't get to those unfortunately. The day will come when there's a call where there's more questions for me than for Sachin. I'm still hopeful, we will get there at some point. What? The story has been resilient consumer. We still see some opportunity in cross-border for Asia. That's the base we're winning. That feels good as we look ahead into 2023, we have 28,000 excited people at Mastercard are gonna deliver on that opportunity. With that, thank you very much and speak to you next quarter. Thank you. This concludes today's conference call. You may now disconnect.