Craig Maurer

Craig Maurer of FT Partners inquired about the cadence of card member services growth throughout the year, specifically how much of the Q4 growth rate was attributable to the new Platinum product and if engagement might wane as the 'new car smell' wears off, affecting spend through the year.

Answer

CEO Steve Squeri stated that engagement levels from the Platinum launch have likely stabilized for existing cardholders, with new cardholders continuing to engage. He noted that not every card member uses every benefit, leading to a more predictable VCE (Card Member Services) level. CFO Christophe Le Caillec added that the VCE to revenue ratio is projected to be around 44% for the year, influenced by rewards costs and ongoing investments.

Craig Maurer asked about the cadence of card member services growth throughout the year, specifically how much the Q4 growth rate was influenced by the new Platinum product launch and if engagement might moderate as the 'new car smell' wears off.

Answer

Steve Squeri, Chairman and CEO, suggested that engagement levels for existing card members likely stabilize after an initial uptake, as not every card member uses every benefit. He expects a more predictable pattern going forward. Christophe Le Caillec, CFO, added that the guidance assumes the VCE to revenue ratio will be around 44% for the year, which accounts for these dynamics.

Craig Maurer inquired about the competitive impact of the Platinum Card refresh, specifically how much of the new acquisition came from consumers or businesses with high-end cards from other issuers versus upgrades within American Express's own portfolio. He also asked about international strength and areas lacking merchant coverage.

Answer

Chairman and CEO Stephen Squeri stated it was too early to determine the competitive takeaways from other issuers, but expressed satisfaction with both upgrades and new card acquisitions. Regarding international performance, he noted broad strength across markets, with three of the top five markets growing by almost 18%. He mentioned ongoing efforts to increase merchant coverage, particularly in Europe, as part of the city and country strategies.

Craig Maurer of Financial Technology Partners asked if the slowdown in travel spend could hurt new card acquisition from co-brand partners and if higher VCE spend was the reason for not raising the full-year EPS guidance.

Answer

CFO Christophe Le Caillec responded that the acquisition mix has not seen a big change, with fee-paying products remaining stable at around 70% of new cards. Regarding the EPS guide, he did not comment on specific quarterly VCE but noted that the VCE ratio is expected to tick up over time with the shift to premium, a factor that was already incorporated into the full-year guidance from the start.

Craig Maurer challenged the assertion that consumer confidence and wealth effects don't impact spending, referencing past issues with FICO creep, and also asked for the e-commerce share of SMB billed business.

Answer

CEO Stephen Squeri based his view on the historical behavior of Amex's card base, where white-collar employment has been the primary driver of credit performance, not broader confidence metrics. CFO Christophe Le Caillec supported this by noting that the delinquency rate for low-tenure card members today is 30% lower than the same cohort in 2019, indicating a higher-quality book. The e-commerce question was not answered.

Craig Maurer asked about AXP's competitive position in SME customer-facing tech against rivals like Ramp and how Delta's optimistic co-brand card commentary aligns with AXP's outlook.

Answer

CEO Stephen Squeri stated that AXP is closely aligned with Delta's positive outlook, which bodes well for the overall travel segment. On SME tech, he acknowledged competitors like Ramp and Brex and affirmed AXP is focused on improving its customer experience and will be responsive to the market, though he declined to comment on potential acquisitions.

Craig Maurer of FT Partners inquired about the lower-than-expected business development spend, asking if it was a short-term issue, and also asked if weather had any impact on the full-year guidance.

Answer

CEO Stephen Squeri stated there was no impact from weather on the guidance. CFO Christophe Le Caillec explained that business development expenses, which include partner payments, were lower because incentives paid to corporate customers are tied to their spending levels. With corporate billings coming in lower, these incentive payments were also reduced.

Craig Maurer asked about the sensitivity of Mastercard's business to FX rate moves, when the FX rates for guidance were set, and whether the significant acceleration in Value-Added Services (VAS) growth in 2025 versus the rest of the business is a trend expected to continue.

Answer

Sachin Mehra (CFO) stated that FX volatility is difficult to predict but impacts transaction processing assessments, noting Mastercard's role in delivering currency conversion services. He expressed strong encouragement for VAS growth, highlighting its tight integration with the payment network, the 60% network-linked revenue, increasing penetration, and innovation. Michael Miebach (CEO) added that Mastercard's differentiated position, unique payment data, and curated services drive this sustained growth.

Craig Maurer from FT Partners questioned Mastercard's sensitivity to FX rate moves and the methodology for setting FX rates in guidance. He also asked if the significant acceleration in Value-Added Services (VAS) growth in 2025, relative to the rest of the business, is expected to continue.

Answer

Sachin Mehra, CFO of Mastercard, explained that FX volatility is difficult to predict, and guidance is based on best estimates and long-term averages, noting its impact primarily on transaction processing assessments. He expressed confidence in continued strong VAS growth, attributing it to the tight intertwining with the payment network, increased attached rates, global customer penetration, and organic innovation, including expansion into new addressable markets like threat intelligence. Michael Miebach, CEO, highlighted Mastercard's differentiated position in services due to proprietary payment data and curated solutions.

Craig Maurer asked for commentary on potential Pillar 2 tax relief for U.S. companies and inquired about the primary growth segments and demand drivers for Mastercard's digital identity solutions.

Answer

CFO Sachin Mehra explained that any Pillar 2 relief would be highly complex, requiring individual legislative changes in every country that has already enacted the rules. CEO Michael Miebach described digital identity as a fundamental layer for the entire digital economy, with use cases extending far beyond payments to areas like secure merchant and consumer onboarding. He cited their work with Major League Baseball as a key non-financial example.

Craig Maurer of FT Partners asked about the unique aspects of Mastercard's business that would enable it to outperform competitors in a slowing economic environment.

Answer

CEO Michael Miebach highlighted the company's highly diversified business model as its core strength. He pointed to three powerful secular trends that provide resilience: the ongoing shift from cash to digital, the increasing need for cybersecurity solutions, and the growing value of data and insights for clients to navigate economic uncertainty. These trends, he argued, support growth regardless of the economic cycle.

Craig Maurer from Financial Technology Partners asked where Mastercard's Value-Added Services (VAS) are most differentiated from competitors when pitching to clients.

Answer

Chief Executive Officer Michael Miebach stated that Mastercard's VAS differentiation is anchored in two powerful trends: security and data insights. He described a comprehensive, end-to-end security suite and a set of data solutions that help clients drive their top line. This approach positions Mastercard as a strategic partner, which he believes is a key differentiator.

Craig Maurer asked how Cross River Bank helps with the backlog and opens new potential for growth in 2026. He also inquired about the renewal cadence for the two customers mentioned (Q4 and Q1 2026) and opportunities with American Express.

Answer

CEO and CFO Michael Milotich expressed excitement about working with Cross River Bank, with a program going live in Q4 and Coastal Community Bank expected early next year. He emphasized selecting bank partners with strong capabilities, technology investments, robust regulatory compliance, and the ability to support Marqeta's broad range of debit, credit, consumer, and commercial offerings. Cross River Bank will be integral to new business brought onto the platform starting in Q4. Michael Milotich clarified that the two large customer renewals, initially expected mid-2025, have taken longer but will be completed before contract expiry, with one in Q4 and the other in early 2026. Regarding American Express, he mentioned ongoing discussions with customers about opportunities and direct talks with American Express about unique joint initiatives, noting the integration is almost complete.

Craig Maurer asked about the anticipated impact of Cross River Bank on Marqeta's backlog and its potential to open new growth avenues in 2026. He also inquired about the cadence of customer renewals, specifically the two customers mentioned for Q4 and Q1, and the emerging opportunities with American Express.

Answer

CEO and CFO Michael Milotich expressed enthusiasm for the partnership with Cross River Bank, with a program going live in Q4, and Coastal Community Bank expected to be operational early next year. He emphasized that new bank partners are selected for their capabilities, technology, strong regulatory compliance, and ability to support Marqeta's broad range of offerings across debit, credit, consumer, and commercial, which will contribute to new business starting in Q4. Regarding renewals, Milotich clarified that the two large customer renewals, initially expected mid-2025, are now anticipated in Q4 2025 and early 2026, both before contract expiry. For American Express, he noted ongoing discussions with customers about several opportunities and direct collaborations with American Express on unique market offerings, with the integration nearing completion.

Craig Maurer inquired about the development of the credit product pipeline and the current status of the planned launches with American Express.

Answer

Interim CEO & CFO Mike Milotich reported that the integration with American Express is nearing certification and is close to going live. He also highlighted that the migration for the Perpay consumer credit card is 97% complete, demonstrating the company's credit migration capabilities. An airline co-brand card is still expected to launch later in the year.

Craig Maurer asked about the U.S. neobanking environment, questioning if underperformance from some players and the Varo termination could create a drag on Marqeta's growth.

Answer

Mike Milotich, Interim CEO and CFO, acknowledged the U.S. neobanking space is more competitive but stated it is not expected to be a drag on growth. He explained that many large, non-fintech brands are now launching neobanking-like offerings for their customers and employees. He emphasized that Marqeta's leadership in this area allows it to power many of these new entrants, mitigating the impact of increased competition.

Craig Maurer inquired about the prioritization of instant and accelerated checkout solutions in a competitive market, and how Shopify's platform positioning could advantage ShopPay in such scenarios.

Answer

Harley Finkelstein, Shopify's President, explained that Shopify's strong brand presence and simplified technology stack, including the agentic kit, make it a preferred partner for AI platforms. He highlighted ShopPay's significant growth, processing $29 billion in GMV in Q3 (up 67% year-over-year) and over $280 billion cumulatively, positioning it as the leading accelerated checkout on Shopify and providing a strong advantage as agentic commerce evolves.

Craig Maurer asked about the potential impact of changes to the de minimis customs exemption on Shopify's business and how the company could leverage AI for content or listing moderation.

Answer

President Harley Finkelstein stated that protections like de minimis are crucial for small businesses and that Shopify focuses on product solutions, such as displaying and collecting duties at checkout, to help merchants navigate such regulations. He emphasized that streamlining customs and improving digital duty collection is preferable to eliminating the exemption.

Craig Maurer asked about the profitability of Mercado Pago's credit card business, specifically the cohorts from last year, and whether this could become a tailwind for profitability in the upcoming year.

Answer

President of FinTech Osvaldo Gimenez reiterated that credit card cohorts older than two years are consistently profitable. He confirmed that 2023 cohorts and older in Brazil are already profitable, and overall portfolio profitability depends on the mix of these maturing cohorts.

Craig Maurer asked about the profitability of MercadoLibre's credit card business, specifically focusing on cohorts from last year that were approaching break-even, and whether this trend could become a tailwind for profitability in the upcoming year.

Answer

MercadoLibre President of FinTech Osvaldo Gimenez confirmed that credit card cohorts older than two years remain profitable, and the overall portfolio's profitability is influenced by the mix of cohorts. He specifically noted that 2023 and older cohorts in Brazil are already profitable, indicating a positive trajectory as more cohorts mature.

Craig Maurer asked about the evolving fintech competition in Mexico as Mercado Pago's offering becomes more bank-like, and inquired about the impact of U.S.-China trade dynamics on e-commerce competition from Asian players in Latin America.

Answer

Osvaldo Giménez, EVP of Fintech, affirmed the strategy to become the leading digital bank in Mexico, competing with both traditional banks and other fintechs, with the yielding account and credit card as key products. Martin de Los Santos, CFO, stated they have not seen a significant change in competition from Asia due to U.S. tariffs. He noted that new tariffs in Brazil and Mexico have slightly reduced cross-border volumes, while Argentina's market opening presents a new opportunity.

Craig Maurer asked for a breakdown of margin compression between one-time setup costs for new facilities and their ongoing operational costs. He also inquired about the outlook for advertising penetration in Q4 and beyond.

Answer

Executive Martin de Los Santos declined to provide a specific breakdown of fulfillment costs but noted the overall impact on margins was less than one percentage point. Executive Ariel Szarfsztejn addressed the advertising question, stating that while growth is not linear, the company is pleased with reaching 2% of GMV. He highlighted that ad revenues are growing faster than GMV and expressed confidence in future potential as they develop their ad tech stack, without giving specific forward-looking guidance.

Craig Maurer questioned the slowdown in new logo additions, asking what is holding back acceleration and whether there are concerns about TAM saturation or pricing. He also asked about confidence in reaching the long-term Investor Day targets.

Answer

CEO Michael Praeger attributed the Q4 slowdown in new logos to caution among CFOs during the election cycle, which pushed deals into 2025. He expressed confidence in returning to 10%+ logo growth, driven by this backlog and strong momentum from new channel partners like AppFolio and M3. CFO Joel Wilhite acknowledged that growth is behind Investor Day targets due to the macro environment but highlighted that the company is ahead of schedule on gross margin and profitability targets.

Craig Maurer questioned the low number of new logo additions, asking what is holding back acceleration and whether there are concerns about TAM saturation or pricing. He also asked about confidence in achieving Investor Day targets given recent growth performance.

Answer

CEO Michael Praeger attributed the Q4 new logo slowdown to customer caution during the election cycle, which pushed deals into 2025, and expressed confidence in returning to 10%+ logo growth. CFO Joel Wilhite acknowledged that growth is below Investor Day targets due to macro factors but highlighted that the company is ahead of schedule on margin and profitability goals. He stated that a return to double-digit growth is needed to get back on the 'Rule of 40' trajectory.

Craig Maurer probed deeper into transaction yield, asking about changes in supplier payment acceptance, and also questioned the reason for the lower political ad spend forecast.

Answer

CEO Michael Praeger stated there have been no significant changes in supplier behavior, crediting the stability to their strategy of offering numerous payment modalities (over 25). Regarding political revenue, he explained the miss was not due to lower overall ad spending, but a different payment mix; more funds went to digital platforms like Google and TikTok, which favor non-monetizable ACH payments over monetizable options.

Craig Maurer of Financial Technology Partners asked about the long-term yield impact from shifting new business origination toward partners and questioned why the political revenue guidance remained flat with 2022 despite a presidential election cycle.

Answer

CFO Joel Wilhite addressed the political revenue, stating that while they are reaffirming the $9M guidance, it is back-end loaded with low visibility, and could be an area of upside. CEO Michael Praeger explained that the net contribution from partner channels is modeled to be consistent with direct sales, as revenue sharing is viewed as a marketing investment, and the shift is yielding higher-quality leads and stronger new logo growth.

Craig Maurer inquired whether the challenging macroeconomic environment is causing any shifts in the transaction mix between different payment modalities, such as VCC or ACH.

Answer

CEO Michael Praeger responded that the macro environment primarily affects discretionary spending volumes rather than the mix of payment types. He explained that supplier decisions on payment modalities are driven by factors like payment timing, cost, and the level of remittance data provided, not broader economic conditions.

Craig Maurer asked about the interplay of different revenue lines in large deal renewals, specifically how pricing concessions are offset by selling value-added services (VAS) and how this contributes to the growth in 'other revenue'.

Answer

Ryan McInerney, Chief Executive Officer, explained that renewal discussions are now far more multifaceted than in the past. They involve a broad array of services, including processing, risk services, and expansion into new flows and commercial verticals. He confirmed this provides many different revenue levers, allowing Visa to use renewals to deepen partnerships and create new growth opportunities in VAS and new flows.

Craig Maurer asked about Visa's long-term commitment to operating leverage, given similar expense and revenue growth forecasts for FY25, and about the assumptions for the APAC region in the guidance.

Answer

CEO Ryan McInerney stated the focus is on maximizing long-term growth by investing in significant opportunities. CFO Chris Suh added that the FY25 guide assumes global trends remain stable, with APAC's performance dependent on macroeconomic conditions in China, which Visa does not forecast.