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. Q2 2023 Earnings 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 one 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. If you would like to withdraw your question, press star one again. Thank you. Mr. Devin Corr, Head of Investor Relations, you may begin your conference. Thank you, Audra. Good morning, everyone, and thank you for joining us for our Q1 2023 earnings call. With me today are Michael Miebach, our Chief Executive Officer, and Sachin Mehra, our Chief Financial Officer. Following comments from Michael and Sachin, the operator will announce your opportunity to get into the queue for the Q&A session. It is only then that the queue will open for questions. You can access our earnings release, supplemental performance data, and the slide deck that accompany this call in the investor relations section of our website, mastercard.com. 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'd like to remind everyone that today's call will include forward-looking statements regarding Mastercard's future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance are summarized at the end of our earnings release and in our recent SEC filings. A replay of this call will be posted on our website for 30 days. With that, I will now turn the call over to our Chief Executive Officer, Michael Miebach. Thank you, Devin. Good morning, everyone. Starting with the big picture, our momentum continued into the second quarter, with net revenue up 15% and operating income up 16%, both versus a year ago on a non-GAAP currency neutral basis. Once again, demonstrating the strong fundamentals of our business. Consumer spending has remained resilient, with spend on experiences and travel remaining a focus. On a macroeconomic front, we continue to monitor a number of factors. First, the overall labor market remains strong, including wage growth, and consumers continue to be supported by credit and savings. These are key factors of consumer spending. Second, the efforts of central banks to curb inflation are showing signs of progress. Despite this, inflation remains elevated, and we are in a period of tight monetary policy across many countries. Economic growth will continue to vary country by country and sector by sector. Looking at our switched volume trends, domestic volume growth remains healthy. We continue to see strength in TNE, with some recent moderation in both inflation and spend in select international markets. Cross-border travel continues to show strength, reaching 154% of 2019 levels in the second quarter. We remain well positioned to capitalize on this trend with our travel-oriented portfolios and our initiatives in areas like loyalty and marketing. Cross-border card, not present X travel, continues to hold up well. We're monitoring the environment closely and are ready to adjust investment levels as appropriate while maintaining focus on our key strategic priorities. As a reminder, these priorities are, 1, expanding in payments, 2, extending our services, and 3, embracing new networks. First, we're expanding in payments by continuing to win deals with a diverse set of customers, powering growth and acceptance, capturing a prioritized set of new payment flows, and exploring new ways to ensure payment choice by leveraging multiple alternatives, including card rails, ACH, blockchain, and open banking. Back to the top of this list, we are winning deals across the globe through a combination of our innovative products, differentiated services, and our solution selling approach. I'll share a few examples from each region. Let's start in Europe, where we announced a significant win with UniCredit across all card products. We expanded our partnership and put in place a first of its kind, single card, multi-market strategy spanning 13 banks, 12 markets, and 20 million cards. UniCredit selected Mastercard due to our innovative digital capabilities, shared focus on sustainability, and proven ability to support their client needs. In Germany, the previously announced conversion of approximately 10 million of Deutsche Bank's credit and debit cards to Mastercard has now started. These wins build on a prior success in the U.K., where there are now 16 million NatWest Debit Mastercards live in market. When combined with the Santander and first direct migrations, approximately 27 million debit cards have now shifted to Mastercard across these 3 portfolios in the U.K. Turning to North America, Mastercard will partner with Fiserv's Money Network for all U.S. state and federal government benefit and wage disbursement debit programs. Up north, Coast Capital, Canada's largest federal credit union, will be converting their consumer and small business portfolios to Mastercard. The partnership highlights our shared commitment to local communities with issuance through Collabria Financial Services. In addition, we have a new agreement with Tim Hortons, the largest quick service restaurant brand in Canada. Tim Hortons will launch a new Mastercard credit card and will be using a broad set of Mastercard's digital analytics and fraud services and technologies. Our relationship with Santander in Latin America continues to grow. In Mexico, we established a long-term exclusive deal with Openbank, their new digital bank. We also renewed the Fiesta Rewards co-brand credit card, Santander's key offering within their consumer portfolio. In Brazil, we will be Santander's exclusive partner across their commercial portfolio. We've expanded our partnership with fast-growing Sicredi, one of Brazil's largest credit unions. In Asia Pacific, we've extended our relationship with Standard Chartered Bank, which will enable us to grow our consumer credit presence across key markets in the region. We've also expanded our partnership with HSBC through the launch of the TravelOne card in Singapore, Malaysia, and Vietnam. TravelOne will provide instant in-app rewards redemption, powered by the Mastercard Rewards system. With all of these cards, people do need a place to use them. We continue to power growth and acceptance by establishing new partnerships and scaling new technologies. This quarter, we announced partnerships with both Alipay and WeChat Pay to enable international travelers to easily link any Mastercard credit or debit card to Alipay and WeChat Pay digital wallets. The partnership allows visitors to make payments with tens of millions of QR code merchants across China. I just returned from China, where I saw firsthand how this is helping international travelers shop and pay in more places in a simple way. It's like paying like a local, and this will be valuable as inbound cross-border travel to China improves from approximately 50% of 2019 levels in the second quarter. In the online environment, we are scaling our Click to Pay capability to enhance the guest checkout experience. Click to Pay transactions grew over 70% year-over-year in the second quarter, and the technology is now live in 30 markets. In the quarter, we added Chile, Bahrain, and Slovakia. NatWest Group became the first bank in the U.K. to go live with Click to Pay push provisioning for cardholders. Shifting to new payment flows, we are making tangible progress in this area. In commercial point-of-sale, we've extended our partnership with Brex to support the international expansion of their commercial portfolios. We expanded our relationship with myPOS, continuing to drive new merchant acceptance across more than 30 European markets, while also migrating their small business debit portfolio to Mastercard. We've established an exclusive partnership with Australian lender Grow Finance to introduce credit cards to their small business customers later this year. In B2B accounts payable, we remain the market leaders in virtual card, and we continue to drive growth by tapping into new use cases. For example, we established an exclusive partnership with EasyTransfer in Greater China. This competitive flip leverages our virtual card capabilities to support cross-border tuition payments for international students. We're also making it easy for buyers and suppliers to integrate virtual cards into the technology platforms they already use. Building on our prior announcements with SAP and Coupa, we've recently partnered with GEP to integrate our virtual card technology into their payables platform. On the supplier side, we launched Mastercard Receivables Manager with Billtrust. The solution streamlines the processing of virtual card transactions with suppliers and automates the integration of reconciliation data into accounts receivable systems. This is a great solution, it builds on partnerships with companies like Boost Payment Solutions, who have been working closely with Mastercard to expand and optimize commercial acceptance. Finally, in new flows, we continue to deploy our disbursement and remittances capabilities in new ways and across new geographies. In the U.S., we partnered with top sports gaming processor, Interchecks, who will make Mastercard Send available to gaming operators for payouts. Careem Pay, one of the largest digital wallets in U.A.E., will use Send to top up their wallets using Mastercard. On the cross-border front, we've partnered with Alfardan Exchange in Qatar to facilitate remittance services and support cross-border travel. Our work in real-time ACH continues to support these new flows. Our historical approach has been to expand our infrastructure reach into new markets. Going forward, we will be focusing on delivering and scaling in the markets we already are serving, while building applications and services in these key locations, in line with our overall strategic and financial objectives. In blockchain, we're introducing the Mastercard Multi-Token Network, MTN. MTN is a set of foundational capabilities designed to make transactions within digital asset and blockchain ecosystems more secure, scalable, and interoperable. We believe in the potential of blockchain technologies. However, regulated money, such as bank deposits and CBDCs, need to be part of the solution, and they should interoperate with traditional systems. We can help with that. MTN is the natural evolution of the work we have already done in this space. The initial sandbox will kick off in the U.K. this summer. Now turning to services. Our services inform decision-making of our customers. They help them create stronger connections and greater loyalty. Payments and services reinforce each other, multiplying our impact and the value we deliver to all our partners. Our services help many drive many of the wins I mentioned earlier. Here are a few additional examples. We recently launched our Consumer Fraud Risk solution, which leverages our latest AI capabilities and the unique network view of real-time payments I just mentioned, to help banks predict and prevent payment scams. AI is a foundational technology used across our business, it has been a game changer in helping identify such fraud patterns. We've partnered with nine U.K. banks, including Barclays, Lloyds Bank, Halifax, Bank of Scotland, NatWest, Monzo, and TSB, to stop scam payments before funds leave a victim's account. TSB, one of the first banks to adopt the solution, indicated that it has already dramatically increased its fraud detection since deploying the capability. We're combining our loyalty, consulting, analytics, and identity services in different ways to help our customers capitalize on the travel recovery. This quarter, we extended our broad-based partnership with Expedia Group. Together, we will combine Mastercard's loyalty solution with Expedia's extensive travel supply to enable Mastercard cardholders to book travel using loyalty points. We also partnered with Thomas Cook in India to issue prepaid cards for international travel. The proposition includes cardholder access to over 450 cross-border travel offers through Mastercard Travel Rewards. Earlier this month, I met with our partners at Deutsche Bank and Lufthansa in Frankfurt. We resigned our long-standing partnerships with Lufthansa Group for its Miles & More loyalty program, and welcomed Deutsche Bank as the new issuing partner. In this enhanced relationship, you'll see a combination of our loyalty solutions, personalization capabilities, and digital user experiences help the partnership take off to the next level using airline speak. We're also leveraging our personalization and Test & Learn capabilities to help our partners across the ecosystem enhance the customer experience and improve acquisition and conversion rates. For example, we combined Dynamic Yield's personalization capabilities with our marketing services to drive digital customer acquisition for Ecobank in Nigeria. In addition, HP Inc. has partnered with us to deploy personalized pack-in content for their consumers across Canada and Europe. On the merchant side, we are working with 7-Eleven in Australia, using our Test & Learn capabilities to support the rollout of new store concepts and evolve its food and beverage offerings. Our third strategic priority area is embracing new networks with a focus on open banking and digital identity. We continue to make progress in open banking and established a series of new and expanded collaborations this quarter, including ones with Freddie Mac, Allwyn, based out of France, and Dapi in the UAE. These entities will leverage our smart and consumer permission data to drive increased financial inclusion and make digital interactions simpler and safer. Turning to digital identity, we're driving adoption across several new verticals, including travel, ticketing, retail, and financial institutions. Travel provider FlightHub is using our identity solutions to help travelers book their new next adventure. Sports teams across the U.S., including the New Jersey Devils, use these solutions to enable fans to buy tickets while reducing fraud on ticketing platforms. Major League Baseball used our new detect technology to ensure that All-Star votes were authentic for this year's All-Star game. In retail, we partnered with IKEA, who's using Ekata to help reduce friction and fraud. Financial institutions like Greenwood, a digital banking platform for Black and LatinX communities, are using our capabilities to authenticate consumers in real time, making financial empowerment a reality for more people. In summary, we delivered another strong quarter of revenue and earnings growth, supported by resilient consumer spending, particularly in travel and experiences. Our strong deal momentum continues with new wins and expanded relationships, powered by our services across a range of partners, including UniCredit, Fiserv, Tim Hortons, Brex, and many more. Our differentiated capabilities, diversified business model, and focused strategy positions us well to capitalize on this significant opportunity ahead. Sachin, over to you. Thanks, Michael Miebach. Turning 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 15%, reflecting resilient consumer spending and the continued recovery of cross-border travel, as well as the continued growth in our value-added services and solutions. Operating expenses increased 13%, including a minimal impact from acquisitions. Operating income was up 16%, including a minimal impact from acquisitions. Net income and EPS increased 11% and 14%, respectively, both reflecting a sizable discrete tax expense this quarter related to foreign tax legislation enacted in Brazil. EPS of $2.89 includes a $0.22 reduction due to the discrete tax expense I just mentioned, and a $0.08 contribution from share repurchases. During the quarter, we repurchased $2.4 billion worth of stock and an additional $497 million through July 24th, 2023. Let's turn to page 4, where you can see the operational metrics for the second quarter. Worldwide gross dollar volume, or GDV, increased by 12% year-over-year on a local currency basis. In the U.S., GDV increased by 6%, with credit growth of 8% and debit growth of 3%. Outside of the U.S., volume increased 16%, with credit growth of 14% and debit growth of 17%. Of note, we have now completed the NatWest debit migration in the U.K. Overall, cross-border volume increased 24% globally for the quarter on a local currency basis, reflecting continued improvement in travel-related cross-border spending. While this is sequentially lower versus Q1, this is due to tougher comps as we opened up post-Omicron last year. When you look at the trend versus 2019, you see continued strength. For example, cross-border travel is at 154% of 2019 levels in second quarter, which is up 6 PPT from the prior quarter. On the same basis, cross-border card not present excluding travel, continues to hold up well in relation to 2019 levels, up 2 PPT from the prior quarter to 210%. Turning to page 5, switch transactions grew 17% year-over-year in second quarter. Both card present and card not present growth rates remained strong. Card present growth was aided in part by increases in contactless penetration, as contactless now represents over 60% of all in-person switched purchase transactions. In addition, card growth was 8%. Globally, there are 3.2 billion Mastercard and Maestro branded cards issued. Turning to slide 6, for a look into our net revenues for the second quarter, which came in above our expectations. As a reminder, earlier this year, we revised our disaggregated revenue disclosure. Net revenues are now broken down into two new categories: payment network and value-added services and solutions. Getting into the numbers described on a currency neutral basis. Payment network net revenue increased 14%, primarily driven by domestic and cross-border transaction and volume growth, and also includes growth in rebates and incentives. Payment network net revenue was higher than anticipated, primarily due to higher revenues related to FX volatility and the timing of planned deal activity. Value-added services and solutions net revenue increased 16%, primarily due to the continued healthy growth of our cyber and intelligence solutions, driven by our underlying driver growth and the demand for our fraud and security solutions, and strong demand for consulting and marketing services, which was partially offset by other solutions. Let's turn to page 7 to discuss key metrics related to the payment network, again, described on a currency neutral basis, unless otherwise noted. Looking quickly at each key metric. Domestic assessments were up 11%, while worldwide GDV grew 12%. The difference is primarily driven by mix. Cross-border assessments increased 29%, while cross-border volumes increased 24%. The 5 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 assessments were up 16%, while switch transactions grew 17%. The one PPT difference is primarily due to lower revenues related to FX volatility versus the prior year. Other network assessments related to licensing, implementation, and other franchise fees were $270 million this quarter. As a reminder, these other network assessments may fluctuate from period to period. Moving on to page eight, you can see that on a non-GAAP currency neutral basis, excluding special items, total adjusted operating expenses increased 13%, primarily due to increased spending on personnel to support the continued execution of our strategic initiatives. Now, turning to page nine, let me first comment on the operating metrics trends in the second quarter. Versus 2019, overall spending has remained resilient. When viewed year-over-year on a sequential basis, we are seeing some moderation in both inflation and spend in select international markets, as well as more difficult comps. As it relates to the first 3 weeks of July, our metrics are holding up well, generally in line with second quarter when indexed to 2019. Just for your information, we have included all the data points from this schedule, excluding activity from Russian-issued cards from current and prior periods in the appendix. Turning to page 10, I wanted to share our thoughts on the remainder of the year. Let me start by saying that our business fundamentals continue to remain strong as overall consumer spending remains healthy, and we continue to deepen our relationships with partners across the globe. Domestic spending patterns have broadly normalized post-pandemic. Cross-border travel continues to grow at a healthy pace, now above 150% of 2019 levels. While the travel recovery has progressed well in most regions, there remain pockets of opportunity, notably into and out of China. We remain well-positioned to capitalize on this continued growth with our travel-oriented portfolios and related service offerings. Cross-border card not present, ex travel, continues to hold up well. While we are monitoring a number of macro and geopolitical factors, our base case scenario for the year continues to assume consumer spending remains resilient, buoyed by strong labor market, and reflects current spending dynamics and the ongoing recovery of cross-border travel. For the year, our outlook is broadly unchanged. We expect net revenue growth for the full year 2023 to remain in the low teens range on a currency neutral basis, excluding acquisitions and special items. As a reminder, this growth rate would have been approximately 1.5 PPT higher if you exclude Russia-related revenues from 2022. Foreign exchange is expected to be a tailwind of 1 PPT for the year, and we expect a minimal impact from acquisitions. Our expectations for operating expense for the year are also unchanged, with growth expected to be at the high end of a high single-digit rate on a currency neutral basis, excluding acquisitions and special items. Acquisitions are forecasted to add about 1 PPT to this growth, and foreign exchange is expected to be a headwind of approximately 0-1 PPT for the year. As Michael mentioned, we are prepared to proactively adjust our operating expenses if we see meaningful changes to top-line growth. With respect to the third quarter, year-over-year net revenue is expected to grow at a low double-digit rate, again, on a currency neutral basis, excluding acquisitions and special items. Coming off a strong second quarter, this sequentially reflects a lower anticipated contribution to growth from revenues related to FX volatility. Foreign exchange is expected to be a tailwind of approximately 3 PPT, and acquisitions are not expected to have much of an impact for the quarter. From an operating expense standpoint, we expect Q3 growth to be at the high 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 approximately 0-1 PPT to this growth, and foreign exchange is expected to be a headwind of approximately 1-2 PPT. Other items to keep in mind: First, on the other income and expense line, we forecast an expense of approximately $90 million for Q3. This excludes gains and losses on our equity investments, which are excluded from our non-GAAP metrics. Second, we expect a non-GAAP tax rate of between 18% and 19% for Q3 and Q4 based on the current geographic mix of our business and the recent U.S. tax guidance that allows for more tax credits to be claimed related to 2022 and 2023. With that, I will turn the call back over to Devin. Thank you, Sachin. Audra, we are now ready to begin the question and answer session. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one 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 take our first question from Tien-Tsin Huang at J.P. Morgan. Hi, good morning. Good to talk to you guys. Just wanted to ask on the UniCredit, that was a nice one, just outside of the top 10 it looks like in Europe. You mentioned a multi-market strategy is what they're going after, and I heard sustainability also as a reason for the win. I'm just curious, as thinking about this as a case study, is this a new trend? Why are they employing this strategy now in the wake of, you know, a lot of the macro uncertainty, open banking, and there's a lot of talk about Pan-European schemes and whatnot. I just wanted to study this a little bit and if there's any comments on timing and pricing as well. Thanks. Right, Tien-Tsin, thanks for the question. This is a fantastic win. We're excited about that. As I laid out, it's very unique. This is a Pan-European bank, cutting across 13 banks and 12 markets, it's a wide strategy, therefore, a single card, multi market, and it cuts across a lot of our digital capabilities. I think the breadth of our offering on the digital-first site, as well as our services, are a key aspect of us winning this particular portfolio. The sustainability part, we see this across a whole range of customers who are all looking at climate as the question of the century to solve, what can it be done, the consumption question in the context of payments. There's so many angles to it. Our Priceless Planet Coalition coalition, you know, on tree planting and so forth plays into that. That is, you know, particularly important to UniCredit. Here again, we had a meeting of the minds. In the end, it comes down to as part of the migration, and you've alluded to this in your question, do we stand ready to serve their needs from day one, as the migration starts? We've proven this with Deutsche Bank, we've proven it with NatWest, and so forth. This is something that is not new to us. We're excited to see this unfold, you know, over the, the, the near future. That's great. Thank you, Michael. We'll go next to Harshita Rawat at Bernstein. Good morning. Thank you for taking my question. Michael, I want to ask about FedNow, which is now finally launched. I know you've commented on this before in very early days, and you're far from any sort of ubiquity or potential retail payments use cases, but you've had also a lot of experience working alongside real-time payments rails, owning some of them. How are you thinking about FedNow and the risk and opportunities from Mastercard? Thank you. Thanks, Harshita. Yeah, we're all monitoring what FedNow is doing. They are now going live, this is clearly a milestone, a good opportunity to look at this topic again. Yeah, our view on this really hasn't changed. In the end, it comes down to what problem are you trying to solve? What are merchants looking for? Merchants are looking for reach to consumers, scale matters. What are consumers looking for? Consumers are looking for safe ways to pay in a predictable fashion, you know, ubiquity available. Those are all factors that, you know, that haven't changed with this, with this launch. We built that acceptance. We have a brand, the two interlocking circles that represent trust, that addresses a lot of what merchants and consumers are looking for, and we strengthen the proposition over years. Contactless, Tap on Phone, Buy Now, Pay Later, Mastercard Installments, Click to Pay, and so forth. That's good. The Mastercard debit proposition is strong, and we keep evolving that, so it's well understood. FedNow is launching. As we look at that, we will obviously continue to compete and offer our services to our banking and issuing partners. At the same time, in our experience, to your question, we have stayed close to these systems in various other countries, in the end, ending up partnering with most of them. Here we'll have to see where it goes. live, going live doesn't mean that it is broadly available yet. It is early days, as you said. You know, it doesn't have features, it doesn't have a consumer, platform as such. You can't access it through your mobile banking app. All of that is what our solution today provides. We have to see where it goes. Head-on competition, but a mindset of partnership where and where it makes sense for us, and where this goes. It is important to say that we do have solutions for these systems. If you look at the Chase Pay-by-Bank solution that we put into the market, that's exactly, you know, leveraging these kind of flows that would run across these systems, generally, P2P-focused. Some non-card penetration verticals run across these, you know, these particular systems, so we see it as an opportunity, and Chase Pay-by-Bank app will be one of those ways to going after that. We've done similar kind of solutions in the U.K. and Europe and so forth. More to come. We'll stay very close. At this point in time, I think we have the better solution in the market. Very helpful. Thanks. We'll go next to Sanjay Sakhrani at KBW. Thanks. Good morning. you know, I had a question on the Fed routing rules, on debit. I guess the card-not-present transactions went through in July. I'm just curious sort of how you see the opportunity there. it would seem like you're in a good position to take some share. Right. You know, the clarification came, two networks available as of first of July. We put that in place, and we said we would, and we're ready to do that. It's still early days. We have to see where that goes, as you rightly said, Sanjay, Sanjay, we stand ready to compete. You know, that is certainly we will look for the opportunity, and I'm sure we will find it. Great. Thanks. Next, we'll go to Lisa Ellis at MoffettNathanson. Hi, good morning. Thanks for taking my question. Hey, Michael, in the prepared remarks, you highlighted that with Mastercard's real-time ACH strategy, you're sort of in a phase of transitioning from building out infrastructure to focusing more on building applications and services. Just kind of taking a step back, you know, it's always been a big differentiator for Mastercard that you own infrastructure and fast ACH with Vocalink and Nets Corporate Services. Can you just comment a bit on the movie over the last, you know, six or seven years? Like, how has that helped differentiate Mastercard in the, you know, in terms of being able to capture account-to-account network payments, you know, new flows, et cetera? Thank you. Thanks, Lisa. Real-time payments, when the rise of real-time payments started, 2016, 2017, and so forth, and we invested into Vocalink, it was clear at the time that we wanted to be in the infrastructure application services. There was a bit of a logic. At the time, we needed the street cred, and we needed the talent so we can participate in this trend from day one. That was the, that was the first season of the movie, so to say, to stick with your analogy. Where we are today, we built out a enviable and unique position in real-time payments, having a footprint in 13 of the top 50 GDP countries where we run and partially operate real-time payment infrastructure. You know, our strategy was we will be in the markets that matter. We don't want to be in the markets that don't matter. We feel we've reached that point. Now it's really to drive up scale and use that infrastructure position. The business in itself of running these systems in these markets is attractive enough. As we pointed out, we're gonna focus on building out a set of applications and services on top of that. You recall from the prepared remark where I talked about the scam, the anti-scam solution in the U.K. with these nine U.K. banks. That's a fantastic example of how our expertise in these markets has positioned us to rally nine banks around a table to come up with a market-wide solution. Not everything that we will do will be market-wide solutions. There will be individual customer solutions, but we feel we have muscle in this space. It's not gonna go away. All these government payment systems out there, more and more real-time payment solutions will come up, and I think we will be in demand. Because we've done it for a long time, we'll have a seat at the table. Thank you. We'll move next to Darrin Peller at Wolfe Research. Hey, thanks, guys. Could we touch on value-added services for a moment? I mean, it's been a good tailwind for some time. I think it grew just about 1 point below transactions this time around, and you mentioned strength in cyber and some other categories, offset by that were offsetting others. I'd be curious to get a little more detail as to what were the strengths and weaknesses of value-added services now, including the other. Then, more importantly, just how much room do you think you have across those different categories to keep that growth alive and cross-sell well into your meaningful payments business? Right. Let me start, and then Sachin can add a bit around the various dynamics around growth rates and so forth. As I said in prepared remarks, payments and services complement each other. You know, the strategy is a combination of both and then we extend that into new networks. That's the starting point. We remain convinced that that is a key reason that all those wins I just talked about earlier, are happening. Central to our strategy, our services in aggregate continue to grow faster than the core. We continue to diversify our revenue base. We like that. We want to continue to do that. There's a whole range of services to choose from, huh? You know, we could do lots of things. We have pruned our strategy when it comes to processing because we didn't feel that was such a differentiator. We felt that cybersecurity in a world that is rapidly digitizing is just, you know, gonna drive the biggest demand, and we're seeing that coming through in the numbers when I look into our C&I business, which grow at a very healthy clip. If you think about our D&S and data analytics business here, you know, we keep on building out the value chain. It's a vertically integrated value chain. We have where you have Test & Learn, we have loyalty, and you go all the way into personalization. That is before, after, during the transaction, helping our customers run a better business. I don't see an end to the demand. In fact, that is key to our segment diversification strategy. Running at a healthy clip, I don't see any moderation here, where this will continue to grow, and you should see us continue to build out across the key aspects of services in cybersecurity and data analytics insights. We love this business, and we'll continue to nourish it. Hey, Darrin, it's Sachin. Good morning. A couple of additional thoughts. Michael kind of covered off the strengths we continue to see in our value-added services and solutions, and that's indeed the case. You got to remember that growth rates move around quarter to quarter on this area. We should all focus on the longer-term trends out here. As it relates specifically to second quarter, when you look at growth rates for value-added services and solutions in second quarter of 16%, I assume you're looking at the sequential trend out there. One point to keep in mind is that there was a 1 PPT drop in second quarter on account of acquisitions, so Q1 had the impact of acquisitions. second quarter doesn't have it because it kind of lapsed that acquisition period. That's 1 piece. Specifically in my comments, I talked about that the strength in cyber intelligence as well as in some of our data and services capabilities was offset by other solutions. It's really all about what the growth rate trends are for cyber and intelligence and data and services relative to growth rates and things like real-time ACH, especially on the infrastructure level. When we talk about other solutions, think about it in the context of things like real-time ACH, which tend to grow at a lower pace there. Historically, what we had spoken about was just services. Now, we're talking about value-added services and solutions. When we think about services in the historical context, in second quarter, that services growth rate was more like 18%. Just for a reference point for you on that. Understood. Very helpful. Thanks. We'll move next to Timothy Chiodo at Credit Suisse. Great. Thank you for taking the question. I wanna dig in a little bit on another business that is important to your, both your volume and your revenue growth algorithm over the medium term, which will be Mastercard Send. You touched a little bit on some of the cross-border use cases. I believe many of the initial use cases were much more domestic, but it's evolving over time. Maybe you could just dig in a little bit more to some of the cross-border use cases that are really gaining traction. Right. Timothy, let me start off with that. Our Send business, domestic and cross-border together, that's how we look at it. There's a big chunk in there, which is cross-border disbursement remittances, as you rightly said. The way that we go after that is by adding new geographies. I gave you 3 markets that we've added this year, Chile, Bahrain, and Slovakia. There is, you know, tremendous reach, unparalleled reach in what we have in our cross-border proposition, 100 countries around the world. There's new ways to go after it, and that is the use cases. Earlier, when I was talking about gaming, gaming payouts, some of that is domestic, some of that is international. The whole workers' remittances piece, Al Fardan and Qatar, those are important corridors. We very specifically go after these corridors, Middle East into South Asia and so forth. It's pretty methodical. You know, there's another way that which I haven't talked about on how to accelerate this business, and this is how we make it easier for customers to onboard with us. Cross-Border Services Express, which is kind of prepackaged solution around cross-border payments, is another way for us to accelerate this business. New geographies, new use cases, corridor-specific, great methodology. I think we have the right kind of assets here across our HomeSend integration, across our Transfast acquisition, the Mastercard propriety system, and our card reach. All in, this is growing at a very healthy pace, and we like that business a lot. We are experts in cross-border, as you know, on the card side, and we're building that out here, over here in cross remittances and disbursements. Excellent. Thank you for taking the question. We'll go to our next question from Rayna Kumar at UBS. Good morning, Michael and Sachin. Thanks for taking my question. Both of you in the past have discussed how B2B remains a large opportunity for Mastercard. Can you talk about what trends you're seeing in B2B payments in this macro environment, how you're progressing against capturing the TAM, and if you're seeing any slowdown in corporate spending as companies potentially tighten their budgets? Thank you, Rayna. I'm noticing there's a lot of questions coming from me. It means that there isn't a lot of questions in the numbers, which is fantastic. I love to talk about B2B. Yeah, let me take the lens, Rayna, that's a little bit broader here on commercial overall. I feel like I'm repeating myself here, but, you know, we're choosing priorities because they are growing at a healthy clip. Is the story for commercial, growing at a healthy clip. This is, you know, we're seeing a quarter-over-quarter year on quarter two year-over-year growth above the consumer side. There's particular strength in our international markets business... We've sustained elevated levels of growth, when we compare this back to 2019, all the noise of COVID out of it. You know, we have two main focuses in this area. One is commercial point of sale, and the other one is our B2B accounts payable business. Commercial point of sale, now, this is a tremendous total market opportunity, massive TAM out there, and it's lightly penetrated by cards today. You know, the way we look at this is this isn't really about building new systems. This is about penetrating with the tools that we have today, targeting SMEs and corporate T&E, purchasing, fleet, all of that, with our existing capabilities that we have, plus our complementary, you know, solutions like Smart Data and Easy Savings and so forth. A lot of cash and checks out there, a lot of opportunity with cards that we have today. We leverage that. We built out a separate vertical in the company. We're focusing hard, and we're seeing the growth rewarding us for that. On the B2B side, this is accounts payable, trusted relationships. This is invoice payments and so forth. This is an even larger TAM with a lot of clear pain points. Companies are looking to automate these processes, digitize these processes, get rid of the paper, and virtual cards is a solution that works tremendously well. We, as I called it out earlier, we are the leaders in virtual cards, but the solution isn't perfect. We invest a lot of energy through our product teams to make it better and better. What I was saying earlier on Receivable Manager, this is a way to automate the acceptance of virtual card payments, build it into the accounts receivable system, automate it through, get the benefits of virtual cards without some of the manual processes that we had to go through over the past year. This is a real breakthrough. This business is gonna be hugely important for us going forward. We called it out in November 2021 at our strategy day. It's one of our biggest growth opportunities. We feel we're ahead in the market, and we're seeing the healthy growth, and that will be remaining a focus for us. We'll go next to Ashwin Shirvaikar at Citi. Hey, good quarter, guys. Michael, since you said Sachin's not getting enough questions, maybe I'll ask a numbers question. Yes, please. I, I wanted to figure out sort of the cadence of OpEx, you know, 3Q versus 4Q. It sort of looks like it looks like you're kinda exiting the year a little bit higher than the 3Q levels in terms of growth. What's causing that as well as, you know... I, I know, I know your cadence of spending tends to be longer term in nature, but are there product or service call-outs in terms of the types of investments that you're making that's most pertinent now? Hey, Ashwin, good morning. you know, look, what we've shared with you is our thoughts around what we think operating expenses look like in the third quarter, right? I've given you what the full year numbers or what our expectations for the full year numbers are. I think you can kinda back into what our operating expense growth rate is gonna be or is expected to be in the fourth quarter. There's nothing unusual going on from an OpEx standpoint in Q4. honestly, I would tell you if you look at it on a year-over-year basis, growth rates, you know, you, when you back into those numbers, you'll see there's nothing really unusual going on there. broadly speaking, on OpEx, here's what I would say. You know, we continue to remain focused on driving our operating expenses in what matters. It's the strategic priorities. It's making sure we're channeling our capital in the appropriate manner to drive growth both in the short, medium, and long term, and that's what we'll continue to do. As you know, we are a people business to a large extent because a lot of what we do from a tech development standpoint is around people. A lot of what we do from a sales standpoint is around people, so that's what we invest in. So when you see growth rates in terms of operating expenses, I tend to call out personnel as one of the line items essentially for that reason alone, which is the growth comes from people, and people are the ones who actually bring the assets that are there for... which allow us to deliver that revenue. Really, nothing unusual going on from an OpEx standpoint, you know, as we exit the year. Okay, great. Thank you. Yeah, we keep top and bottom line growth in mind, but, you know, there is a tremendous opportunity ahead of us right now. We are using this tailwind that we're currently seeing to continue to invest. You see the list of wins, the growth momentum in B2B, the growth momentum in services. This is the time to continue to, you know, nourish that business and invest, and you will see us do that in a very prudent and disciplined fashion. Understood. Thank you. We'll go next to Dan Dolev at Mizuho. Hey, guys. Thank you so much for taking my question. I appreciate it. Just a quick question on the guidance. Like, you know, obviously, results were very strong. You know, you exceeded, your, second quarter guidance on revenue. Like, what was the thought process of, you know, not boosting the guidance for the year? Thank you. Dan, a couple of thoughts here. One, you know, again, remember, we share guidance in terms of ranges, and that's what we've shared out here as well, right? You know, when you think about ranges, you know, that's what they are in essence. Point number two is, you know, some of the beat, which we had in second quarter, as I mentioned in my prepared remarks, was driven by what we call timing of deal activity. We still expect to be active in the markets. We still expect to vigorously compete in these markets, I kind of intentionally mention that as timing only because we do expect that as the year progresses, we will continue to be active in the market. You know, I think you should take that into consideration as well. My only other comment I'd make is in, in Q1, we had modestly increased our thoughts relative to what we had shared right at the start of the year. When you bring all of that together, right, that's kind of our thinking behind what we've shared from a full year guidance standpoint. Got it. Well. Thank you so much. Sure. We'll go next to Robert Napoli at William Blair. Thank you. Good morning. On open banking, Mastercard's been pretty aggressive in investing in open banking, I'd just like some additional thoughts maybe on how that's progressing, how open banking maybe fits into other strategies like embedded in finance and banking as a service? Right. Open banking, as you know, we specifically call that out as one of two opportunities in new networks. The trend is here to stay. That's pretty clear. This whole notion of, you know, people get to use their data footprint to avail better financial services, there's a lot more regulation coming around that. PSD3 in Europe is coming out. This train has left the station. That's good. We're on it. You know, the way we look at it is, we have to move beyond connectivity. We had a good start. We're well connected here in the U.S. through our Finicity asset and in Europe through our Aiia assets. We're very busy now building use cases on top of that, and this is where we think the future is going. Initial demand of Finicity was very clearly in lending-oriented use cases, and asset verification use cases. That is where the demand is today. To Sachin's earlier point, where do we invest? We invest where we see the demand and the near-term demand. That is the, that is where we're optimizing. You're already starting to see as we're going beyond these lending use cases, with our solutions like our Pay by Bank with Chase solution here in the U.S. This is using a Payment Success Indicator, which is using open banking data to tell a biller, "This is a good time when there is balance on an account, please now bill." That is what the Payment Success Indicator does. That is powered by Mastercard's open banking technology. Near-term use case is clear. That's working connectivity. We're well positioned with our two assets, and we're very busy building out use cases. Obviously, we're excited to see Pay-by-Bank with Chase launch in the third quarter, as we said to you. Thank you. We'll take our next question from excuse me, David Togut with Evercore ISI. Thank you. Good morning. Cross-border volume growth remains very strong. On slide 9, clearly there's a deceleration from April growth through June, especially in cross-border travel. My question is, for the second half, what growth rate in cross-border volume is embedded in your guidance? If you could go a little bit under the hood, what do you see in cross-border travel volumes? You know, maybe a little more texture in what you're seeing by country. In Europe, you gave kind of overall data and some thoughts on China. Sure, David. A couple of thoughts first. Let's start at the highest level, which is the value prop of cross-border travel still remains incredibly strong. We've got a strong value prop. We have a strong presence in the market. As you'll remember, as we were going through COVID, when everybody had stopped traveling, we've used that as an opportunity to continue to bolster our position in cross-border, and that's, you know, paying dividends right now. The fact that we were building portfolios and winning portfolios at that point in time is helping us actually drive strong growth in cross-border, broadly speaking, but also in travel. Specifically to your question around trends, I think you're looking at year-over-year growth rates. When you are looking at what the cross-border travel trajectory is, month-over-month, the declines you were talking about, I'd encourage you to look at the right-hand side of slide 9, which talks about the numbers indexed to 2019. There you could see actually there's an accelerating trend in cross-border travel. Said differently, you can see that in Q1, our cross-border travel as a percentage of 2019, was 148%. In second quarter, that was 154%. In the first 3 weeks of July, that's 157%. The reason that's important is because the year-over-year growth rates are getting impacted by tougher comps from last year, and I think that's important to actually keep in mind. You know, in terms of regional color, I would say that, you know, regions are performing well. You know, look, I mean, the beauty of what we've got at Mastercard is a diversified business model. It's diversified across multiple dimensions, across, you know, payments and services, across products, across channels of sale, across regions. The fact that we've got this presence, strong presence across various regions, helps us in the cross-border side as well. Really, what we're seeing is good, sustained growth in cross-border, both on travel as well as non-travel across the globe. We're seeing accelerating trends in Asia Pacific, which we had very much expected and spoken about. That's what you're seeing coming through in the nature of the numbers here. We still think there are pockets of opportunity on a going-forward basis, in particular, going into China and coming out of China. Just as a reference point, Michael talked about how cross-border travel inbound into China stood at approximately 50% of 2019 levels in second quarter. That just goes to show what the opportunity remaining there is. Conversely, cross-border travel outbound from China was approximately 70% in second quarter. And so that both those numbers will give you an indication of where the opportunities lie on a going-forward basis. As we continue to do what we're doing in terms of you know, winning more portfolios, enriching our proposition, layering services such as our loyalty programs, that just helps us position us well on a going-forward basis. That's the kind of color I'd like to share with you on this. Broadly speaking, I think we're in a very good place, as it relates to cross-border. One thing to add here, that is the current imbalance in the market between demand and supply. There's still an unlock there, as in airline capacity, airport capacity, and all of that will unlock. The combination of the underlying desire to travel, how that trend is coming through, our position, strong position, in the travel industry with our portfolios, Expedia and Lufthansa, just to add two here, this unlock of capacity over time, will be a very good mix. This is an exciting space. People just wanna be out there. We'll go next to Daniel Perlin at RBC. Thanks. Good morning. I just wanted to maybe dig a little deeper on the commentary around this moderation in inflation and spending, Sachin, that you called out. Particularly, you know, what can you tell us about, kind of the downdrafts in average tickets during the current quarter? Maybe more specifically, are you seeing any discernible signs or indications of trade downs from the consumer that would be, you know, high corollaries to slightly weaker consumer spending, as opposed to this resiliency that it sounds like you guys are continuing to talk about? Thank you. Sure, Dan. Couple of thoughts. I mean, it's no surprise, I think you guys are all seeing, you know, that inflation, while still remaining at high levels, has started to moderate, right? You're seeing that come through in terms of the nature of spend, right? We're a nominal value business, at the end of the day, right, inflation, declining inflation quarter-over-quarter will have an impact. That was important to actually call out. I also talked about how there's a moderation in select markets, international markets. The reality is, when you look at markets... This is not broad-based, right? There are select markets where, you know, let's take a market like the U.K.. At the end of the day, rising interest rates, and the high inflation levels ultimately will put a squeeze on, you know, people's ability to spend. That doesn't mean that the consumer isn't necessarily resilient. The consumer remains resilient, on a more holistic basis, but at the margin, right, what you start to see is, as, say, for example, mortgages get reset. When mortgages get reset, they get reset at higher interest rates. What it's doing is it's squeezing the wallet, or share of wallet, which would be available for other discretionary categories of spend. You know, you're gonna see a little bit of that trend come through, which is what we were kind of calling out. All of that's factored into our thinking as we think about the rest of the year, and in my full year guidance. That's really, in essence, what we were kind of thinking about. Again, I'll summarize it by saying there's, you know, recent reductions in inflation, there's a little bit of moderation in select international markets, and really, we haven't seen this as being broad-based. We haven't seen this as something which is, you know, causing concerns for us. It's very much in line with what we've been thinking about from a guidance standpoint. I'll remind you that at the end of the day, cross-border continues to be strong, back to the question which David just asked. Kind of bring that all together, right? We feel good about what the strength of the consumer is. Excellent. Thank you. I think we have time for one more question. We'll take that question from Bryan Keane at Deutsche Bank. Hi, guys. Good morning. Thanks for fitting me in. Sachin, just want to ask about ex-FX volatility and how it impacts the model. I know cross-border assessment revenue growth was above volume, so it had a positive yield. I think in your peers, one of your peers' reports, it was actually negative, and they called out the lack of FX volatility. Just trying to understand how it impacts Mastercard's model. Sure, Bryan. First, you know, when we talk about FX volatility, you see that in our numbers in transaction processing assessments, not in cross-border assessments. It is tied to the activity of auth, clear, and settle, which is why it sits in transaction processing assessments. And what I called out was the higher growth rate in cross-border assessments relative to volume was driven by what we call favorable mix, which is the fact that our inter-volumes, which is everything ex-intra Europe, right, are growing at a faster pace than intra Europe. Inter-volumes tend to be high yielding than, as compared to intra, and that's the reason you had that positive kind of gap between where revenues were in cross-border assessments and where volumes were. Again, the volatility comment I made was tied to transaction processing assessments, which is where it sits. Great. Thank you. Michael, any closing comments? All right. Thanks, Devin. The first thing I wanna say, you should all know that Warren Kneeshaw sits in the other room and is listening to us. This is the first time solo, solo by Devin, we're delighted with this next chapter now. As always, I wanna make a comment about all the people at Mastercard who make this happen, the 30,000 of us. I sent them a note earlier today with the results and said, "You know, this is the value that you guys deliver every day." Just wanted to share that with you. With that, thank you for your support, your questions today, we'll talk to you soon. Take care. Bye bye. Thanks, everyone. This concludes today's conference call. Thank you for your participation. You may now disconnect.