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    MA
    Earnings call· Mar 2026(Q1 FY26)

    Mastercard Q1 FY26 earnings call MA

    Apr 30, 2026 Source

    Executive summary

    Mastercard Q1 FY26 — Strong Start with Diversified Growth and Strategic Innovation

    Mastercard delivered a strong Q1 FY26, showcasing the resilience of its diversified network and strategic execution across consumer payments, commercial flows, and value-added services. Despite geopolitical headwinds impacting cross-border travel, the company is leveraging innovation in agentic commerce and digital assets, alongside robust partnerships, to drive sustained growth. Management remains confident in its full-year outlook, anticipating a gradual recovery in affected areas through the second half.

    Highlights

    5

    • Net revenue increased 12% year-over-year on a non-GAAP currency-neutral basis.

    • Net income grew 15% and EPS increased 18% year-over-year.

    • Value-Added Services & Solutions net revenue increased 18%, driven by strong demand.

    • Overall cross-border volume increased 13% globally, reflecting continued growth in travel and non-travel spending.

    • Repurchased $4 billion worth of stock in Q1, contributing $0.10 to EPS.

    Concerns

    4

    • Geopolitical tensions, particularly the Middle East conflict, put pressure on cross-border travel, impacting Q1 and expected to be largest in Q2.

    • Q2 FY26 net revenue growth is expected at the low end of a low double-digit range, partly due to the conflict.

    • Q2 FY26 operating expense growth is also expected at the low end of a low double-digit range.

    • Q2 FY26 other income and expense is projected to be $150 million, higher sequentially due to one-time items not repeating, lower cash, higher debt, and a disposition impact.

    Guidance & targets

    13
    CategoryTargetConfidence
    Q2 FY26 Net Revenue Growth
    low end of low double digits range
    high materiality
    High
    Q2 FY26 Net Revenue FX Tailwind
    1 to 2 ppt
    medium materiality
    High
    Q2 FY26 Operating Expense Growth
    low end of low double digits range
    high materiality
    High
    Q2 FY26 Operating Expense Disposition Benefit
    0 to 1 ppt
    low materiality
    High
    Q2 FY26 Operating Expense FX Headwind
    0 to 1 ppt
    low materiality
    High
    Q2 FY26 Other Income and Expense
    $150 million expense
    medium materiality
    High
    Q2 FY26 Non-GAAP Tax Rate
    20% to 21%
    low materiality
    High
    Full Year FY26 Net Revenue Growth
    high end of a low double-digit range
    high materiality
    High
    Full Year FY26 Net Revenue FX Tailwind
    1.5 ppt
    medium materiality
    High
    Full Year FY26 Operating Expense Growth
    low double digits range
    high materiality
    High
    Full Year FY26 Operating Expense Disposition Tailwind
    0.5 to 1 ppt
    low materiality
    High
    Full Year FY26 Operating Expense FX Headwind
    0.5 to 1 ppt
    low materiality
    High
    Full Year FY26 Non-GAAP Tax Rate
    20% to 21%
    low materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Payment Network
    Growth primarily driven by domestic and cross-border transaction and volume growth, including growth in rebates and incentives. The 5 ppt difference between cross-border assessments and cross-border volumes is due to pricing in international markets. The 6 ppt difference between transaction processing assessments and switched transactions is due to favorable mix and pricing, offset by lower revenue from FX volatility.
    Domestic assessments: Up 6%Cross-border assessments: Up 18%Transaction processing assessments: Up 15%
    		—8%——
    Value-Added Services & Solutions
    Growth primarily driven by underlying drivers, strong demand across security solutions, digital and authentication, business and market insights, and consumer acquisition and engagement and pricing. This growth was organic, with no incremental impact from acquisitions in Q1.
    		—18%——

    Operational metrics

    19
    EPS contribution from share repurchases
    $0.10
    Q1 FY26

    Driven by accelerated pace of buybacks given current valuation levels and strong conviction in long-term growth potential.

    Share repurchases
    $4 billion
    Q1 FY26

    Additional $1.7 billion repurchased through April 27, 2026.

    U.S. debit GDV growth excluding Capital One migration
    7%
    Q1 FY26

    Reported U.S. debit GDV growth was 1%. The migration of the Capital One debit portfolio is basically complete.

    Switched transactions growth excluding Capital One migration
    10%
    Q1 FY26

    Reported switched transactions grew 9% year-over-year. Growth was generally in line with Q4 FY25 on a like-for-like basis.

    Contactless penetration
    78%Up 5 ppt YoY
    Q1 FY26

    As a percentage of all in-person switched purchase transactions.

    Cards in force
    3.7 billionUp 5%
    Q1 FY26

    Mastercard and Maestro-branded cards issued globally.

    Cross-border card not present ex-travel growth
    18%
    Q1 FY26

    Remained strong.

    Value-Added Services & Solutions revenue share
    40%
    Q1 FY26

    Represents roughly 40% of the company's total revenues.

    Ethoca products growth
    25%YoY
    Q1 FY26

    Ethoca products help connect issuers and merchants post transactions for dispute resolution.

    Mastercard Threat Intelligence engaged customers
    500
    Q1 FY26

    Product launched last year, combining Mastercard and Recorded Future capabilities.

    Consulting and marketing services customer return rate
    75%
    2024

    Percentage of customers from 2024 who returned to use services again last year.

    Consulting and marketing services usage increase
    20%YoY
    2024

    Increased usage by returning customers.

    BVNK revenue model
    basis points on volume
    Future

    Revenue model for send, receive, convert, and store services for stablecoins.

    Cross-border volume from GCC and Israel
    1%
    Q1 FY26

    Represents roughly 1% of total cross-border volumes (inbound and outbound).

    Switched transactions proportion
    70%
    Q1 FY26

    North of 70% in the most recent quarter, up from 60% in 2020.

    Friendly fraud cost (US)
    $100 billion
    annually

    Third-party research estimates this cost for issuers and merchants in the U.S.

    Mastercard Move endpoints
    17 billion
    Q1 FY26

    Access to more than 17 billion endpoints for near real-time money movement.

    Value-Added Services & Solutions revenue growth
    22%
    Q4 FY25

    Reported for Q4 of last year, including acquisition impact.

    Rebates and incentives as % of payment network assessments
    slightly lower sequentiallyvs Q1 FY26
    Q2 FY26

    Expected trend for Q2.

    Industry KPIs

    10
    MetricValueDetails
    New flows17 billionendpoints
    Capital returns$4 billionUSD
    Cross border volume13%%
    Payments volume gdv7%%
    Rule changes regulation—
    Client incentives rebatesslightly lower sequentially%
    Cards in force credentials3.7 billioncards
    Net revenue yield take rateincreasing
    Value added services revenue18%%
    Switched processed transactions9%%

    Product announcements

    6
    ProductTypeDetails
    Verifiable Intentlaunch
    Mastercard Agent Paymilestone
    Mastercard One credentiallaunch
    Mastercard Global Commerce Suiteslaunch
    Generative AI modellaunch
    Mastercard Threat Intelligencemilestone

    Deals & partnerships

    24
    BVNKacquisition

    Planned acquisition of BVNK, a blockchain infrastructure platform, to enhance Mastercard's capabilities in digital assets, particularly stablecoins. BVNK brings technology for interoperability, licenses, and compliance tools.

    Session Mdivestiture

    Planned disposition of Session M, Mastercard's loyalty business, acquired a few years ago.

    CIB (Egypt)partnership

    Expanded partnership with CIB in Egypt, including conversion of an affluent portfolio and new market/service expansion.

    Westpac (Australia)partnership

    Renewal and expansion of partnership with Westpac, one of Australia's largest banks.

    Rogers Bankpartnership

    Launched new World Legend cards in North America.

    Safra National Bankpartnership

    Will launch World Legend cards in North America in the coming months.

    United Airlines Canadapartnership

    New co-brand program will move to Mastercard, making Mastercard the network of choice.

    Bancolombiapartnership

    Launching new World Legend portfolios in Latin America.

    Aeromexicopartnership

    Partnering to bring their co-brand to Mastercard.

    HSBC Hong Kongpartnership

    Launching a set of affluent products, including World Legend, in Asia.

    Bank Mandiri (Indonesia)partnership

    Launching a new private banking card in the super affluent segment.

    SoFIpartnership

    Launching Mastercard One credential with its SoFI Smart Card.

    Fiserv and Blossompartnership

    Partnership to make Mastercard One credential more accessible to community banks and credit unions.

    U.S. Amazon / U.S. Bankcustomer contract

    The U.S. Amazon small business co-brand card, issued by U.S. Bank, will move to Mastercard.

    Freepartnership

    Added as a new U.S. fleet partner, enabling card-based invoice payments for wholesale food distributors.

    Ridepartnership

    European digital fleet and in-car payment system operator converting its closed-loop fleet program to open-loop Mastercard.

    High Note (U.S.), Travelsoft (Europe), Juniper (Europe), Bulla (Brazil)customer contract

    Signed new B2B travel payment customers using virtual cards for online travel agency customers.

    Bank of Shanghaipartnership

    Extended connections with Bank of Shanghai through Mastercard Move.

    One Inc.partnership

    Renewed agreement with One Inc. for U.S. insurance disbursement flows.

    Checkout.compartnership

    Will embed Ethoca alerts into their global digital experience, enabling merchants to enroll directly in pre-chargeback dispute resolutions.

    Westpac and Capitecpartnership

    Will leverage network-agnostic services and subscription management capabilities from MENA.

    Optum Financialpartnership

    Initially deployed Open Finance account opening verification services for HSA accounts and is now expanding into additional account types.

    Webster Bank's HSA Bankpartnership

    Elected Mastercard Open Finance to support both identity verification and account linking for seamless member onboarding.

    Intesa Sanpaolopartnership

    Expanded services partnership to boost card penetration and usage, combining advanced analytics, portfolio optimization, and always-on marketing across Intesa and its digital bank Easy Bank.

    Risks & headwinds

    4
    Geopolitical tensions and Middle East conflictQ1 FY26, Q2 FY26, with gradual recovery in H2 FY26

    Impacted cross-border travel, causing a sequential decline in Q1 and expected to be largest in Q2. GCC and Israel represent approximately 1% of total cross-border volumes.

    Mitigation: Diversified business across geographies, products, and services reduces concentration risk. Working with customers to identify shifting spending patterns and opportunities.

    Portfolio shiftsOngoing for several quarters

    Impacted cross-border travel, particularly pronounced for travel-heavy portfolios.

    Mitigation: Disciplined approach to winning the 'right kinds of portfolios' and managing wins/losses.

    Foreign exchange volatilityQ2 FY26, Q3 FY26, Q4 FY26, Full Year FY26

    Headwind in Q2 FY26, less in Q3 FY26, dissipates in Q4 FY26. Q2 FY26 operating expense headwind of 0 to 1 ppt. Full-year FY26 operating expense headwind of 0.5 to 1 ppt.

    Mitigation: Factored into guidance; company is diversified across geographies.

    Higher sequential expense in Q2 FY26Q2 FY26

    Other income and expense expected to be $150 million, higher than Q1.

    Mitigation: Primarily driven by Q1 one-time items not repeating, lower cash balances, higher debt levels due to accelerated share repurchases, and a one-time unfavorable impact from the Session M disposition.

    Q&A highlights

    8

    How is Mastercard's VAS strategy evolving, particularly in the context of embracing new networks like A2A payments and the planned divestiture?

    Michael Miebach affirmed the multi-rail strategy, noting that cards are not the answer for everything and real-time payments are a key focus for governments. He highlighted the application of services like cybersecurity to these new payment rails, which provides a seat at the table with governments. Sachin Mehra clarified that the mentioned disposition refers to Session M, their loyalty business.

    “So that strategy still holds. There is no question about that because real time is very much in focus. A lot of governments choose real-time payment systems to go and facilitate payments of all types across their respective markets, where a known and respected partner in this space.”

    asked by William Nance · answered by Michael Miebach

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Pillars & Network Strength

    Mastercard's Q1 results underscore the strength and resilience of its network, built on four pillars: unparalleled global reach, robust franchise rules ensuring trust and protection, best-in-class technology for faster payments, and differentiated value-added services powered by data and AI. The company has grown acceptance locations by 70% in the last five years, driving a virtuous cycle where increased network activity enhances data availability and value for all participants. This foundation positions Mastercard to navigate evolving macro environments and innovate in the digital economy.

    02

    Agentic Commerce & Digital Assets Innovation

    Mastercard is actively engaged in shaping the evolving agentic e-commerce ecosystem, partnering with key players like Google, Microsoft, and OpenAI. Nearly all Mastercards are now enabled for Mastercard Agent Pay, and the company launched 'verifiable intent' in Q1, a tamper-resistant record for AI agent actions, which the FIDO Alliance is adopting for security standards. In digital assets, Mastercard is expanding crypto co-brand programs, enabling stablecoin settlement, and plans to acquire BVNK to enhance its capabilities in sending, receiving, converting, and holding stablecoins, addressing interoperability and regulatory needs.

    03

    Consumer Payments Momentum & Affluent Strategy

    The company secured significant portfolio wins, including an expanded partnership with CIB in Egypt, expected to issue over 5 million new cards, and a renewal with Westpac in Australia. Mastercard's affluent strategy is resonating globally, with World Legend cards demonstrating higher overall and cross-border spend compared to World Elite. New World Legend launches are underway with Rogers Bank, Safra National Bank, Bancolombia, and HSBC Hong Kong, while the United Airlines Canada co-brand program is moving to Mastercard.

    04

    Commercial & New Payment Flows Expansion

    Mastercard is doubling down on commercial payments, securing the U.S. Amazon small business co-brand card, issued by U.S. Bank, to move to its network. The company expanded its fleet segment presence with new U.S. partners like Free and converted European digital fleet operator Ride to open-loop Mastercard. In B2B travel, new wins include High Note, Travelsoft, Juniper, and Bulla. Mastercard Move continues to scale, extending connections with Bank of Shanghai and renewing an agreement with One Inc., while powering Mastercard Global Commerce Suites for small businesses.

    05

    Value-Added Services Driving Growth

    Demand for Value-Added Services (VAS) remains high, with 18% currency-neutral growth in Q1. Mastercard is leveraging its data and AI, including a new generative AI model with NVIDIA, to power smarter insights and solutions. Innovations in dispute resolution, like Ethoca products growing 25% year-over-year, and cybersecurity, through Mastercard Threat Intelligence (with over 500 engaged customers), are providing tangible value. Open Finance initiatives are gaining traction with Optum Financial and Webster Bank, and consulting services continue to see high customer retention and increased usage.

    AI-generated summary of the company’s earnings call. Not investment advice.