AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Substantial actual transaction scale, integrated issuer-acquirer processing and settlement guarantees support an established coordination advantage. Comparative network reach and the strength of incremental network effects remain unmeasured.
durability · 2/4 · Growing usage and renewed deals support persistence, but direct-processing alternatives and customer bargaining constrain confidence in long-term protection. Exceptional durability is not demonstrated.
customer dependency · 2/4 · Authorization, clearing and settlement perform important recurring functions, and renewals show continued demand. Dependency is inferred indirectly; exclusivity and switching costs are not quantified, and incentives are material.
erosion resilience · 2/4 · Revenue and margins continued improving despite incentives and legal costs. Actual adverse liability findings and regulatory constraints offset that resilience; hypothetical disintermediation is a risk rather than a demonstrated broad loss of position.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Management identifies pricing as a contributor to first-half services growth. Network rebates and incentives rose 22% against 11% net network revenue growth, producing mixed evidence across the business. No disclosed bridge isolates net unit pricing.
retention · 2/4 · Renewed customer deals and growing transaction activity demonstrate repeat demand indirectly. The passages do not separate retained customers from additions, and increased incentives suggest maintaining demand can require concessions.
margin resilience · 3/4 · GAAP operating margin rose from 55.8% in 2023 to 57.6% in 2025; first-half margin rose from 58.0% in 2025 to 59.4% in 2026, with adjusted margins also improving. This demonstrates resilience through disclosed costs, but does not isolate pricing from scale, mix or expense management.
contractual freedom · 2/4 · Mastercard charges network fees and negotiates performance-linked incentives, supporting some ability to set terms. Customer demands, potential agreement modifications and regulatory constraints limit that freedom; unrestricted repricing rights are not disclosed.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.33
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.16
Financial strength78
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 98.47
- netDebtEbitGrade
- 91.07
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 22.80
- Debt / FCF (x)
- 1.11
- Net debt / operating income (x)
- 0.45
- Interest coverage (x)
- 26.17
- Current ratio (x)
- 1.03
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 107.03
- 3-year average dilution (%)
- -2.22
- 3-year average SBC / revenue (%)
- 1.84
- cashConversionGrade
- 100.00
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 operating cash flow of $17.6 billion covered $14.5 billion returned to stockholders. In first-half 2026, $6.772 billion of operating cash flow fell below $8.933 billion of repurchases plus $1.548 billion of dividends, while debt proceeds were $5.596 billion. Shares outstanding declined despite equity issuance, but greater financing dependence and absent investment-return evidence make discipline mixed.
incentive alignment · 3/4 · Established PSUs combine revenue and EPS objectives, a relative-return modifier and a post-vesting holding period; buybacks are incorporated into initial EPS assumptions. A completed payout calculation demonstrates operation of performance-based compensation. Committee discretion and missing executive ownership detail limit confidence; future awards are not assumed vested.
execution · 3/4 · Revenue and net income grew across 2023–2025 and again in first-half 2026, supported by higher transaction activity and services growth. A completed South Africa network deployment adds a concrete operational achievement, although that achievement is issuer-reported and investment returns are not isolated.
governance · 3/4 · Disclosed practices include an independent chair, annual director elections, majority voting, special-meeting rights and proxy access, alongside an independent Risk Committee with defined responsibilities. These support strong governance structures, without proving exceptional effectiveness; director nominees are not treated as already elected.
Evidence
Switching activities include: ◦Authorization, the process by which a transaction is routed to the issuer for approval ◦Clearing, the determination and exchange of financial transaction information between issuers and acquirers after a transaction has been successfully conducted at the point of interaction ◦Settlement, which facilitates the determination and exchange of funds between parties These assessments can also include connectivity services and network access, which are based on the volume of data transmitted and the number of authorization and settlement messages.
Item 2, payment-network assessments: authorization, clearing, settlement and connectivity · Filed 30/07/2026
Note 20. Settlement and Other Risk Management Mastercard’s rules guarantee the settlement of many of the payment network transactions between its customers (“settlement risk”).
Note 20, settlement guarantees · Filed 11/02/2026
Gross dollar volume (growth on a local currency basis) Cross-border volume growth (on a local currency basis) Switched transactions $10.6T 175.5B up 9% up 15% up 10% Capital returned to stockholders in 2025 Cash flows from operations Total Repurchased shares Dividends paid 2025 $14.5B $11.7B $2.8B $17.6B Our strong performance over the years has resulted in substantial stock price appreciation.
Proxy summary, 2025 operating metrics and capital returns · Filed 27/04/2026
Net revenue from our payment network increased 11%, or 8% on a currency-neutral basis, versus the comparable period in 2025.
Item 2, first-half 2026 net payment-network revenue growth · Filed 30/07/2026
The increase was primarily driven by growth in domestic and cross-border dollar volumes and an increase in the number of switched transactions, reflecting growth trends across all of our key drivers.
Item 2, payment-network growth drivers · Filed 30/07/2026
Net revenue from our payment network included $11,636 million of rebates and incentives provided to customers, which increased 22%, or 19% on a currency-neutral basis, versus the comparable period in 2025, primarily due to an increase in our key drivers as well as new and renewed deals.
Item 2, first-half 2026 rebates, incentives and new and renewed deals · Filed 30/07/2026
As the payments industry continues to develop and change, we face disintermediation and related risks, including the following: •Parties that process our transactions in certain countries (such as merchants and third-party payment processors) may try to eliminate our position as an intermediary in the payment process by switching transactions directly with issuers or processing transactions directly between issuers and acquirers.
Item 1A, direct-processing disintermediation risk · Filed 11/02/2026
•Payments industry participants may develop their own products and services to support our switched transaction and payments offerings, forcing us to change our pricing or practices for our own offerings in order to compete.
Item 1A, competing participant offerings and pricing risk · Filed 11/02/2026
In the future, we may not be able to enter into agreements with our customers if they require terms that we are unable or unwilling to offer, and we may be required to modify existing agreements in order to maintain relationships and compete with others in the industry.
Item 1A, customer agreement terms and potential modifications · Filed 11/02/2026
Central banks and similar regulatory bodies have increasingly established or further expanded their authority over certain aspects of payments systems such as ours, including obligations or restrictions with respect to the types of products and services that we may offer, the countries in which our products and services may be used, the way we structure and operate our business and the types of consumers and merchants who can obtain or accept our products or services.
Item 1A, regulatory authority over payment-system operations and participation · Filed 11/02/2026
merchant action decided against Mastercard on certain liability issues, and in March 2026, Mastercard was granted permission to appeal this decision on all grounds.
Litigation note, adverse U.K. merchant liability decision and permission to appeal · Filed 30/07/2026
Plaintiffs allege that Mastercard and Visa have violated Section 1 of the Sherman Act by imposing rules that require ATM operators to charge non-discriminatory ATM surcharges for transactions processed over Mastercard’s and Visa’s respective networks that are not greater than the surcharge for transactions over other networks accepted at the same ATM.
Litigation note, allegations involving Mastercard and Visa networks · Filed 30/07/2026
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Consolidated Statements of Operations For the Years Ended December 31, 2025 2024 2023 (in millions, except per share data) Net Revenue $ 32,791 $ 28,167 $ 25,098 Operating Expenses: General and administrative 11,318 10,193 8,927 Advertising and marketing 929 815 825 Depreciation and amortization 1,143 897 799 Provision for litigation 504 680 539 Total operating expenses 13,894 12,585 11,090 Operating income 18,897 15,582 14,008 Other Income (Expense): Investment income 325 327 274 Gains (losses) on equity investments, net (88) (29) (61) Interest expense (722) (646) (575) Other income (expense), net 166 20 (7) Total other income (expense) (319) (328) (369) Income before income taxes 18,578 15,254 13,639 Income tax expense 3,610 2,380 2,444 Net Income $ 14,968 $ 12,874 $ 11,195 Basic Earnings per Share $ 16.54 $ 13.91 $ 11.86 Basic weighted-average shares outstanding 905 925 944 Diluted Earnings per Share $ 16.52 $ 13.89 $ 11.83 Diluted weighted-average shares outstanding 906 927 946 The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Operations, 2023–2025 · Filed 11/02/2026
Net revenue from our value-added services and solutions increased 21%, or 18% on a currency-neutral basis, versus the comparable period in 2025.
Item 2, first-half 2026 value-added services revenue growth · Filed 30/07/2026
The increase was driven primarily by (1) growth in our underlying key drivers, (2) our security solutions, digital and authentication solutions, consumer acquisition and engagement services and business and market insights and (3) pricing.
Item 2, services growth attribution including pricing · Filed 30/07/2026
Non-GAAP Reconciliations The following tables reconcile our reported financial measures calculated in accordance with GAAP to the respective adjusted non-GAAP financial measures: Three Months Ended June 30, 2026 Operating expenses Operating margin Other income (expense) Effective income tax rate Net income Diluted earnings per share ($ in millions, except per share data) Reported - GAAP $ 3,690 60.2 % $ (101) 20.0 % $ 4,388 $ 4.97 (Gains) losses on equity investments ** ** 2 (0.1) % 5 0.01 Litigation provisions (82) 0.9 % ** 0.1 % 59 0.07 Adjusted - Non-GAAP $ 3,608 61.1 % $ (100) 20.0 % $ 4,453 $ 5.04 Six Months Ended June 30, 2026 Operating expenses Operating margin Other income (expense) Effective income tax rate Net income Diluted earnings per share ($ in millions, except per share data) Reported - GAAP $ 7,181 59.4 % $ (196) 19.7 % $ 8,270 $ 9.32 (Gains) losses on equity investments ** ** 68 (0.1) % 69 0.08 Litigation provisions (82) 0.5 % ** 0.1 % 59 0.07 Restructuring charge (202) 1.1 % ** — % 158 0.18 Adjusted - Non-GAAP $ 6,897 61.0 % $ (128) 19.7 % $ 8,556 $ 9.64 Three Months Ended June 30, 2025 Operating expenses Operating margin Other income (expense) Effective income tax rate Net income Diluted earnings per share ($ in millions, except per share data) Reported - GAAP $ 3,356 58.7 % $ (105) 20.8 % $ 3,701 $ 4.07 (Gains) losses on equity investments ** ** (4) 0.1 % (5) (0.01) Litigation provisions (96) 1.2 % ** 0.1 % 73 0.08 Adjusted - Non-GAAP $ 3,260 59.9 % $ (109) 20.9 % $ 3,769 $ 4.15 Six Months Ended June 30, 2025 Operating expenses Operating margin Other income (expense) Effective income tax rate Net income Diluted earnings per share ($ in millions, except per share data) Reported - GAAP $ 6,457 58.0 % $ (223) 19.8 % $ 6,981 $ 7.66 (Gains) losses on equity investments ** ** 25 — % 19 0.02 Litigation provisions (247) 1.6 % ** 0.3 % 174 0.19 Adjusted - Non-GAAP $ 6,210 59.6 % $ (198) 20.1 % $ 7,175 $ 7.87 Note: Tables may not sum due to rounding.
Item 2, GAAP and adjusted operating-margin reconciliations · Filed 30/07/2026
Revenue Recognition - Rebates and Incentives We enter into business agreements with certain customers that provide for rebates and incentives when customers meet certain volume thresholds or other incentives tied to customer performance.
Critical Accounting Estimates, contractual customer rebates and incentives · Filed 11/02/2026
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2026 2025 (in millions) Operating Activities Net income $ 8,270 $ 6,981 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of customer incentives 1,310 993 Depreciation and amortization 608 556 (Gains) losses on equity investments, net 68 25 Share-based compensation 326 308 Deferred income taxes 110 81 Other 84 60 Changes in operating assets and liabilities: Accounts receivable (448) (217) Settlement assets (745) (590) Prepaid expenses (3,835) (2,238) Accrued litigation and legal settlements (504) 81 Restricted security deposits held for customers 90 125 Accounts payable 124 (168) Settlement obligations 750 356 Accrued expenses 788 (203) Net change in other assets and liabilities (224) 833 Net cash provided by operating activities 6,772 6,983 Investing Activities Purchases of investment securities available-for-sale (134) (247) Purchases of investments held-to-maturity — (22) Proceeds from sales of investment securities available-for-sale 32 126 Proceeds from maturities of investment securities available-for-sale 89 125 Proceeds from maturities of investments held-to-maturity 13 27 Purchases of property and equipment (445) (199) Capitalized software (368) (367) Other investing activities (66) (10) Net cash used in investing activities (879) (567) Financing Activities Purchases of treasury stock (8,933) (4,838) Dividends paid (1,548) (1,385) Proceeds from debt, net of discounts 5,596 1,242 Payment of debt — (750) Proceeds from (payment of) debt, maturities of 90 days or less, net 84 — Tax withholdings related to share-based payments (204) (279) Cash proceeds from employee stock plans 73 117 Other financing activities (108) (100) Net cash used in financing activities (5,040) (5,993) Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents (126) 341 Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 727 764 Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period 13,248 10,808 Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period $ 13,975 $ 11,572 The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows, first-half 2026 and 2025 · Filed 30/07/2026
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Common Stock Activity The following table presents the changes in the Company’s outstanding Class A and Class B common stock: Three Months Ended June 30, 2026 2025 Class A Class B Class A Class B (in millions) Balance at beginning of period 880.3 6.6 903.0 6.8 Purchases of treasury stock (9.8) — (4.2) — Share-based payments 0.1 — 0.2 — Conversion of Class B to Class A common stock 0.1 (0.1) 0.1 (0.1) Balance at end of period 870.7 6.5 899.1 6.7 Six Months Ended June 30, 2026 2025 Class A Class B Class A Class B (in millions) Balance at beginning of period 887.3 6.6 906.6 6.8 Purchases of treasury stock (17.6) — (8.9) — Share-based payments 0.9 — 1.3 — Conversion of Class B to Class A common stock 0.1 (0.1) 0.1 (0.1) Balance at end of period 870.7 6.5 899.1 6.7 In December 2025 and 2024, the Company’s Board of Directors approved programs authorizing the Company to repurchase shares of its Class A common stock up to $14.0 billion and $12.0 billion, respectively.
Note 10, actual common-stock activity and repurchase authorizations · Filed 30/07/2026
The PSU plan design, as determined by the HRCC, for the performance period beginning January 1, 2025 and ending December 31, 2027: •Provides a balanced top- and bottom-line long-term focus through the use of three one-year adjusted net revenue and three one-year adjusted EPS growth metrics (equally weighted) averaged over the three-year performance period: •EPS growth targets take into account an initial assumption for share buybacks •Enhances the link with stockholder returns by adjusting, up or down, the payout from the adjusted average net revenue and adjusted average EPS metrics by Mastercard’s relative TSR (stock price performance plus dividends) versus the S&P 500 member companies to reflect our stockholder experience beginning on the grant date and ending on December 31, 2027 •Provides a payout range from 0%-200% of the granted PSUs •Excludes dividends or dividend equivalents prior to vesting •Shares issuable at vesting are subject to a mandatory one-year holding period •Vested PSUs are eligible for dividend equivalents during the mandatory one-year holding period Payout range 0%-200% EPS 50% of units Relative TSR vs.
Executive compensation, established 2025–2027 PSU design · Filed 27/04/2026
The final PSU payout score could range from 0%-200% of target: Measurement Threshold (50% modifier) Target (100% modifier) Maximum (150% modifier) Actual result Pre-TSR score (a) Modifier (b) Three-year relative TSR modifier (beginning on March 1, 2023) 25th percentile 50th percentile 75th percentile 71st percentile 92.9% 142.0% (TSR of -6.92%) (TSR of 25.46%) (TSR of 65.40%) (TSR of 56.09%) Payout rate (a x b) 131.8% 2026 MASTERCARD PROXY 73 EXECUTIVE COMPENSATION Other elements of compensation In addition to the primary elements of total direct compensation described above, the NEOs may be eligible for the programs and benefits described below.
Executive compensation, completed performance-period PSU payout calculation · Filed 27/04/2026
While our incentive programs are substantially formulaic, the HRCC retains discretion to make adjustments to ensure compensation appropriately reflects operating performance and to achieve desired talent management objectives, including engagement and retention of key talent to execute our business strategy and create long-term value for stockholders.
Executive compensation, compensation committee adjustment discretion · Filed 27/04/2026
Board practices include: •Oversight of long-term, key strategies •Frequent executive sessions of independent directors •Continuous assessment of Board refreshment •Oversight of risk management practices central to the company’s success •Continuing director education, including education regarding cybersecurity in 2025 •Independent Board Chairperson •Active engagement in managing talent and long-term succession planning •10 of 11 independent director nominees Board policies include: •Annual election of directors •Majority voting standard for director elections •Stockholders’ right to call special meetings (15% threshold) •Proxy access •Stock ownership guidelines for directors •Limit of four publicly traded companies on which our directors may serve •NCG annual review of director time commitments •NCG review of material changes in a director’s other responsibilities •Annual Board and committee self-evaluations We encourage you to visit the “Corporate Governance” area of the “Investor Relations” page of our website, where you will find our key documents, policies and additional information about corporate governance at Mastercard.
Corporate governance, board practices and stockholder rights · Filed 27/04/2026
Janow •Rima Qureshi* Primary responsibilities The duties of the Risk Committee, in coordination with the Audit Committee, where appropriate, include: •Reviewing Mastercard’s risk management governance, framework and programs, including risk management culture and risk management function •Reviewing Mastercard’s guidelines and policies with respect to risk assessment and risk management, major strategic risk exposures and management’s oversight of such exposures •In consultation with the Audit Committee, overseeing risk relating to settlement and counterparty risk •Overseeing the establishment, operation and annual refresh of our risk appetite statement and metrics and their alignment with our strategic, capital and financial plans and, where applicable, regulatory requirements and recommend approval of the risk appetite statement to the Board •Overseeing risks relating to information security, inclusive of cybersecurity; enterprise resilience, inclusive of crisis management, operational and technology; privacy and data protection; regulatory affairs; franchise and competition (including digital disintermediation) •Reviewing risks regarding the company’s regulated activities •In coordination with the Audit Committee, reviewing regulatory examination or independent auditor reports pertaining to matters within the Risk Committee’s purview Independence Each committee member has been determined by the Board to qualify as independent under the independence criteria established by the NYSE.
Corporate governance, independent Risk Committee responsibilities · Filed 27/04/2026
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions, except per share data) Net Revenue $ 9,277 $ 8,133 $ 17,675 $ 15,383 Operating Expenses: General and administrative 3,082 2,766 6,121 5,289 Advertising and marketing 217 213 370 365 Depreciation and amortization 309 281 608 556 Provision for litigation 82 96 82 247 Total operating expenses 3,690 3,356 7,181 6,457 Operating income 5,587 4,777 10,494 8,926 Other Income (Expense): Investment income 88 70 169 158 Gains (losses) on equity investments, net (2) 4 (68) (25) Interest expense (218) (195) (403) (377) Other income (expense), net 31 16 106 21 Total other income (expense) (101) (105) (196) (223) Income before income taxes 5,486 4,672 10,298 8,703 Income tax expense 1,098 971 2,028 1,722 Net Income $ 4,388 $ 3,701 $ 8,270 $ 6,981 Basic Earnings per Share $ 4.98 $ 4.08 $ 9.33 $ 7.67 Basic weighted-average shares outstanding 882 908 887 910 Diluted Earnings per Share $ 4.97 $ 4.07 $ 9.32 $ 7.66 Diluted weighted-average shares outstanding 883 909 888 911 The accompanying notes are an integral part of these consolidated financial statements.
Unaudited Consolidated Statements of Operations, first-half 2026 and 2025 · Filed 30/07/2026
In 2025, we took our redesigned, upgraded network live in South Africa, delivering the near real-time switching capabilities necessary in today’s world.
Leadership annual letter, South Africa upgraded-network deployment · Filed 27/04/2026
Within our payment network, revenue is primarily generated from charging fees to our customers based on GDV (which includes both domestic and cross-border volume) on the cards that carry our brands and for providing switching and other network-related services.
Business, payment-network fee model · Filed 11/02/2026
