Mastercard Inc - Quarter Report: 2025 June (Form 10-Q)

Defined benefit pension and other postretirement plans, net of income tax effect

Investment securities available-for-sale

Income tax effect Investment securities available-for-sale, net of income tax effect Other comprehensive income (loss), net of income tax effect () ()Comprehensive Income$ $ $ $

The accompanying notes are an integral part of these consolidated financial statements.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Consolidated Balance Sheets (Unaudited)

June 30, 2025

December 31, 2024

(in millions, except per share data)

Assets

Current assets:

Cash and cash equivalents

Restricted cash and restricted cash equivalents

Restricted security deposits held for customers

Investments

Accounts receivable

Settlement assets

Prepaid expenses and other current assets

Total current assets

Property, equipment and right-of-use assets, net of accumulated depreciation and amortization of $ and $, respectively

Deferred income taxes

Goodwill

Other intangible assets, net of accumulated amortization of $ and $, respectively

Other assets

Total Assets

Liabilities and Equity

Current liabilities:

Accounts payable

Settlement obligations

Restricted security deposits held for customers

Accrued litigation

Accrued expenses

Short-term debt

Other current liabilities

Total current liabilities

Long-term debt

Deferred income taxes

Other liabilities

Total Liabilities

Commitments and Contingencies

Stockholders’ Equity

Class A common stock, $ par value; authorized shares, and shares issued and and shares outstanding, respectively

Class B common stock, $ par value; authorized shares, shares issued and outstanding

Additional paid-in-capital

Class A treasury stock, at cost, and shares, respectively

()

Retained earnings

Accumulated other comprehensive income (loss)

()

Mastercard Incorporated Stockholders' Equity

Non-controlling interests

Total Equity

Total Liabilities and Equity

The accompanying notes are an integral part of these consolidated financial statements.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Stockholders’ Equity

Common Stock

Additional
Paid-In
Capital

Class A
Treasury
Stock

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Mastercard Incorporated Stockholders’ Equity

Non-
Controlling
Interests

Total Equity

Class A

Class B

(in millions)

Three Months Ended
June 30, 2025

Balance at beginning of period

()

Net income

—

Activity related to non-controlling interests

—

()

Other comprehensive income (loss)

—

Dividends

—

()

—

()

—

()

Purchases of treasury stock

—

()

—

()

—

()

Share-based payments

—

Balance at end of period

()

Six Months Ended
June 30, 2025

Balance at beginning of period

$ $ $ $()$ $()$ $ $ Net income— — — — — — Activity related to non-controlling interests— — — — — — — ()()Other comprehensive income (loss)— — — — — — Dividends— — — — ()— ()— ()Purchases of treasury stock— — — ()— — ()— ()Share-based payments— — — — —

Balance at end of period

$ $ $ $()$ $()$ $ $

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Consolidated Statement of Changes in Equity (Unaudited) - (Continued)

Stockholders’ Equity

Common Stock

Additional
Paid-In
Capital

Class A
Treasury
Stock

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Mastercard Incorporated Stockholders’ Equity

Non-
Controlling
Interests

Total Equity

Class A

Class B

(in millions)

Three Months Ended
June 30, 2024

Balance at beginning of period

()

Net income

—

Activity related to non-controlling interests

—

()

Redeemable non-controlling interest adjustments

—

()

—

()

—

()

Other comprehensive income (loss)

—

()

—

()

Dividends

—

()

—

()

—

()

Purchases of treasury stock

—

()

—

()

—

()

Share-based payments

—

Balance at end of period

()

Six Months Ended
June 30, 2024

Balance at beginning of period

()

Net income

—

Activity related to non-controlling interests

—

()

Redeemable non-controlling interest adjustments

—

()

—

()

—

()

Other comprehensive income (loss)

—

()

—

()

Dividends

—

()

—

()

—

()

Purchases of treasury stock

—

()

—

()

—

()

Share-based payments

—

Balance at end of period

()

The accompanying notes are an integral part of these consolidated financial statements.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Consolidated Statements of Cash Flows (Unaudited)
	Six Months Ended June 30,
	2025	2024
	(in millions)
Operating Activities
Net income	$	$
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of customer incentives
Depreciation and amortization
(Gains) losses on equity investments, net
Share-based compensation
Deferred income taxes		()
Other
Changes in operating assets and liabilities:
Accounts receivable	()	()

Settlement assets	()	()
Prepaid expenses	()	()
Accrued litigation and legal settlements		()
Restricted security deposits held for customers		()
Accounts payable	()
Settlement obligations
Accrued expenses	()	()

Net change in other assets and liabilities		()
Net cash provided by operating activities
Investing Activities
Purchases of investment securities available-for-sale	()	()
Purchases of investments held-to-maturity	()	()
Proceeds from sales of investment securities available-for-sale
Proceeds from maturities of investment securities available-for-sale
Proceeds from maturities of investments held-to-maturity
Purchases of property and equipment	()	()
Capitalized software	()	()




Other investing activities	()
Net cash used in investing activities	()	()
Financing Activities
Purchases of treasury stock	()	()
Dividends paid	()	()
Proceeds from debt, net
Payment of debt	()	()



Tax withholdings related to share-based payments	()	()
Cash proceeds from employee stock plans
Other financing activities	()
Net cash used in financing activities	()	()
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents		()
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents		()
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period	$	$

The accompanying notes are an integral part of these consolidated financial statements.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Notes to consolidated financial statements (unaudited)

Note 1.

Note 2.

billion. As of June 30, 2025, the Company was evaluating and finalizing the purchase accounting for the businesses acquired in 2024. For the preliminary fair values of the purchase price allocations, as of the acquisition dates, refer to Note 2 (Acquisitions) to the consolidated financial statements included in Part II, Item 8 of the Company’s 2024 Form 10-K.

Note 3.

$ $ $ Value-added services and solutions Net revenue$ $ $ $ Net revenue by geographic region:

Americas 1

$ $ $ $

Asia Pacific, Europe, Middle East and Africa

Net revenue$ $ $ $

1Americas includes the United States, Canada and Latin America.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract assets

Prepaid expenses and other current assets Other assets

Deferred revenue 1

Other current liabilities Other liabilities

million and $ million, respectively.

Note 4.

$ $ $ DenominatorBasic weighted-average shares outstanding Dilutive stock options and stock units

Diluted weighted-average shares outstanding 1

Earnings per ShareBasic$ $ $ $ Diluted$ $ $ $

Note: Table may not sum due to rounding.

1 For the periods presented, the calculation of diluted EPS excluded a minimal amount of anti-dilutive share-based payment awards.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5.

Held-to-maturity securities 1

Total investments $ $

1Held-to-maturity securities represent investments in time deposits that mature within one year. The cost of these securities approximates fair value.

Investment income on the consolidated statements of operations primarily consists of interest income generated from cash, cash equivalents, held-to maturity and available-for-sale investment securities, as well as realized gains and losses on the Company’s investment securities. The realized gains and losses from the sales of available-for-sale securities for the three and six months ended June 30, 2025 and 2024 were not material.

Available-for-Sale Securities

$ $ $ $ $ $ $ Corporate securities

Asset-backed securities

Total$ $ $ $ $ $ $ $

The Company’s government and agency securities include U.S. government bonds, U.S. government sponsored agency bonds and foreign government bonds that are denominated in the national currency of the issuing country. Corporate and asset-backed securities held at June 30, 2025 and December 31, 2024 primarily carried a credit rating of A- or better. Corporate securities are comprised of commercial paper and corporate bonds. The gross unrealized gains and losses on the available-for-sale securities are primarily driven by changes in interest rates and are recorded in other comprehensive income (loss).

$ Due after 1 year through 5 years Total$ $

Equity Investments

Included in other assets on the consolidated balance sheets are equity investments with readily determinable fair values (“Marketable securities”) and equity investments without readily determinable fair values (“Nonmarketable securities”). Marketable securities are equity interests in publicly traded companies and are measured using unadjusted quoted prices in their respective active markets. Nonmarketable securities that do not qualify for equity method accounting are measured at cost, less any impairment and adjusted for changes resulting from observable price changes in orderly transactions for the identical or similar investments of the same issuer (“Measurement alternative”).

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ $ $()$ $ Nonmarketable securities () Total equity investments $ $ $ $()$ $

1Recorded in gains (losses) on equity investments, net on the consolidated statements of operations.

2Primarily translational impact of currency.

Equity method

Total Nonmarketable securities$ $

Cumulative adjustments 1:

Upward adjustments Downward adjustments (including impairment)()Carrying amount, end of period$

1 Includes immaterial translational impact of currency.

$ $ $ Downward adjustments (including impairment)()()()()Marketable securities:Unrealized gains (losses), net ()()()

Note 6.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ $ $ $ $ $ $ Corporate securities

Asset-backed securities

Derivative instruments 2:

Foreign exchange contracts

Marketable securities 3:

Equity securities

Deferred compensation plan 4:

Deferred compensation assets Liabilities

Derivative instruments 2:

Foreign exchange contracts$ $ $ $ $ $ $ $ Interest rate contracts

Deferred compensation plan 5:

Deferred compensation liabilities

1The Company’s U.S. government securities are classified within Level 1 of the Valuation Hierarchy as the fair values are based on unadjusted quoted prices for identical assets in active markets. The fair value of the Company’s available-for-sale non-U.S. government and agency securities, corporate securities and asset-backed securities are based on observable inputs such as quoted prices, benchmark yields and issuer spreads for similar assets in active markets and are therefore included in Level 2 of the Valuation Hierarchy.

2The Company’s foreign exchange and interest rate derivative asset and liability contracts measured at fair value are based on observable inputs such as broker quotes for similar derivative instruments. See Note 16 (Derivative and Hedging Instruments) for further details.

3The Company’s Marketable securities are publicly held and fair values are based on unadjusted quoted prices in their respective active markets.

4The Company has a nonqualified deferred compensation plan under which assets are invested primarily in mutual funds held in a rabbi trust or are held as cash equivalents, all of which are restricted for payments to participants of the plan. The Company has elected to use the fair value option for these assets, which are measured using quoted prices of identical instruments in active markets. These are included in prepaid expenses and other current assets and restricted cash and restricted cash equivalents on the consolidated balance sheets.

Nonrecurring Measurements

Nonmarketable Securities

The Company’s Nonmarketable securities are recorded at fair value on a nonrecurring basis in periods after initial recognition under the equity method or measurement alternative method. Nonmarketable securities are classified within Level 3 of the Valuation Hierarchy due to the absence of quoted market prices, the inherent lack of liquidity and unobservable inputs used to measure fair value that require management’s judgment. The Company uses discounted cash flows and market assumptions to estimate the fair value of its Nonmarketable securities when certain events or circumstances indicate that impairment may exist. Observable price changes in orderly transactions for identical or similar investments of the same issuer could also result in fair value adjustments. See Note 5 (Investments) for further details.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

billion and $ billion, respectively. At December 31, 2024, the carrying value and fair value of debt was $ billion and $ billion, respectively. See Note 9 (Debt) for further details.

Other Financial Instruments

Certain other financial instruments are carried on the consolidated balance sheets at cost or amortized cost basis, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, restricted cash and restricted cash equivalents, restricted security deposits held for customers, time deposits, accounts receivable, settlement assets, accounts payable, settlement obligations and other accrued liabilities.

Note 7.

$ Other Total prepaid expenses and other current assets$ $ $ Equity investments Income taxes receivable Other Total other assets$ $

Note 8.

$ Personnel costs Income and other taxes Other Total accrued expenses$ $

million and $ million, respectively.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9.

Senior Notes due March 2028

% %

Senior Notes due March 2032

2024 USD Notes

Senior Notes due January 2028

% %

Senior Notes due January 2032

% %

Senior Notes due January 2035

% %

Senior Notes due May 2034

%2023 USD Notes %Senior Notes due March 2028 % %Senior Notes due March 2033 %

2022 EUR Notes

%Senior Notes due February 2029 %2021 USD Notes %Senior Notes due November 2031 % %Senior Notes due March 2031 % %Senior Notes due March 2051 %2020 USD Notes %Senior Notes due March 2027 % %Senior Notes due March 2030 % %Senior Notes due March 2050 %2019 USD Notes %Senior Notes due June 2029 % %Senior Notes due June 2049 % %Senior Notes due March 2025 %2018 USD Notes %Senior Notes due February 2028 % %Senior Notes due February 2048 %2016 USD Notes %Senior Notes due November 2026 % %Senior Notes due November 2046 %

2015 EUR Notes

%Senior Notes due December 2027 % %Senior Notes due December 2030 % Less: Unamortized discount and debt issuance costs()()

Less: Cumulative hedge accounting fair value adjustments 1

()()Total debt outstanding

Less: Short-term debt 2

()Long-term debt$ $

**The $ million of Senior Notes due March 2028 are Floating Rate Notes that bear interest at a floating rate, reset quarterly, equal to the Compounded Secured Overnight Financing Rate (“SOFR”) plus %.

1The Company has an interest rate swap that is accounted for as a fair value hedge. See Note 16 (Derivative and Hedging Instruments) for additional information.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

million principal amount of Floating Rate Notes due March 2028, $ million principal amount of % notes due March 2028 and $ million principal amount of % notes due March 2032 (collectively, the “2025 USD Notes”). The net proceeds from the issuance of the 2025 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $ billion.

Note 10.

$ $ $ Total dividends declared$ $ $ $

Common Stock Activity

Purchases of treasury stock() () Share-based payments Conversion of Class B to Class A common stock () Balance at end of period

Six Months Ended June 30,

2025

2024

Class A

Class B

Class A

Class B

(in millions)

Balance at beginning of period

Purchases of treasury stock

()

Share-based payments

Conversion of Class B to Class A common stock

()

Balance at end of period

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billion and $ billion, respectively. $ Shares repurchased Average price paid per share$ $

billion. Through July 28, 2025, the Company repurchased $ billion dollar-value of shares. As of July 28, 2025, the remaining authorization under share repurchase programs approved by the Company’s Board of Directors was $ billion.

Note 11.

)$ $ $()

Translation adjustments on net investment hedges 2

() Cash flow hedges

Foreign exchange contracts 3

()() ()Interest rate contracts() ()Defined benefit pension and other postretirement plans() ()Investment securities available-for-sale Accumulated other comprehensive income (loss)$()$ $ $()

December 31, 2023

Increase / (Decrease)

Reclassifications

June 30, 2024

(in millions)

Foreign currency translation adjustments 1

()

Translation adjustments on net investment hedges 2

Cash flow hedges

Foreign exchange contracts 3

()

Interest rate contracts

()

Defined benefit pension and other postretirement plans

()

Investment securities available-for-sale

()

Accumulated other comprehensive income (loss)

()

1For the six months ended June 30, 2025, the decrease in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the appreciation of the euro, British pound, and Brazilian real against the U.S. dollar. For the six months ended June 30, 2024, the increase in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the depreciation of the euro and Brazilian real against the U.S. dollar.

2For the six months ended June 30, 2025, the decrease in the accumulated other comprehensive income related to the net investment hedges was driven primarily by the appreciation of the euro against the U.S. dollar. For the six months ended June 30, 2024, the increase in the accumulated other comprehensive income related to the net investment hedges was driven by the depreciation of the euro against the U.S. dollar. See Note 16 (Derivative and Hedging Instruments) for additional information.

3Represents foreign exchange derivative contracts designated as cash flow hedging instruments. Gains and losses resulting from changes in the fair value of these contracts are deferred in accumulated other comprehensive income (loss) and subsequently reclassified to the consolidated statements of operations when the underlying hedged transactions impact earnings. See Note 16 (Derivative and Hedging Instruments) for additional information.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12.

$ Restricted stock units$ Performance stock units$

The Company uses the Black-Scholes option pricing model to determine the grant-date fair value of stock options and calculates the expected life and the expected volatility based on historical Mastercard information. The expected life of stock options granted in 2025 was estimated to be , while the expected volatility was determined to be %. These awards expire from the date of grant and vest ratably over .

The fair value of restricted stock units (“RSUs”) is determined and fixed on the grant date based on the Company’s Class A common stock price, adjusted for the exclusion of dividend equivalents. RSUs generally vest ratably over .

The Company uses the Monte Carlo simulation valuation model to determine the grant-date fair value of performance stock units (“PSUs”) granted. PSUs vest after from the date of grant and are subject to a mandatory deferral period, during which vested PSUs are eligible for dividend equivalents.

Compensation expense is recorded net of estimated forfeitures over the shorter of the vesting period or the date the individual becomes eligible to retire under the LTIP. The Company uses the straight-line method of attribution over the requisite service period for expensing equity awards.

Note 13.

% and %, respectively. The effective income tax rates for the six months ended June 30, 2025 and 2024 were % and %, respectively.

The higher effective income tax rates for the three and six months ended June 30, 2025, versus the comparable periods in 2024, were primarily due to the 15% global minimum tax (“Pillar 2 Rules”) that took effect in 2025 in Singapore and various other jurisdictions. The Pillar 2 Rules primarily offset the reduction to the Company’s effective income tax rate resulting from the Company’s incentive grant received from the Singapore Ministry of Finance.

The Company is subject to tax in the United States, Belgium, Singapore, the United Kingdom and various other foreign jurisdictions, as well as state and local jurisdictions. Uncertain tax positions are reviewed on an ongoing basis and are adjusted after considering facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitation. Within the next twelve months, the Company believes that the resolution of certain federal, foreign and state and local examinations is reasonably possible and that a change in estimate, reducing unrecognized tax benefits, may occur. While such a change may be significant, it is not possible to provide a range of the potential change until the examinations progress further or the related statutes of limitation expire. The Company has effectively settled its U.S. federal income tax obligations through 2014. With limited exception, the Company is no longer subject to state and local or foreign examinations by tax authorities for years before 2014.

Note 14.

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

% of the monetary portion of the settlement. In the event of a settlement involving only Mastercard and the financial institutions with respect to their issuance of Mastercard cards, Mastercard would pay % of the monetary portion of such settlement.

In 2012, the parties entered into a definitive settlement agreement with respect to the U.S. MDL Litigation Cases (including with respect to the claims related to the IPO) and the defendants separately entered into a settlement agreement with the individual merchant plaintiffs. The settlements included cash payments that were apportioned among the defendants pursuant to the omnibus judgment sharing and settlement sharing agreement described above. Mastercard also agreed to provide class members with a short-term reduction in default credit interchange rates and to modify certain of its business practices, including its no surcharge rule. The court granted final approval of the settlement in 2013. Following an appeal by objectors and as a result of a reversal of the settlement approval by the U.S. Court of Appeals for the Second Circuit, the case was sent back to the district court for further proceedings. The court divided the merchants’ claims into two separate classes - monetary damages claims (the “Damages Class”) and claims seeking changes to business practices (the “Rules Relief Class”). The court appointed separate counsel for each class.

In 2018, the parties to the Damages Class litigation entered into a class settlement agreement to resolve the Damages Class claims, with merchants representing slightly more than % of the Damages Class interchange volume choosing to opt out of the settlement. The Damages Class settlement agreement became final in 2023. Since 2018, Mastercard has reached settlements or agreements in principle to settle with over opt-out merchants. These opt-out merchant settlements, along with the Damages Class settlement, represent over % of Mastercard’s U.S. interchange volume.

Approximately individual opt-out merchants continue to litigate, seeking treble damages and attorneys’ fees and costs. In 2024, the district court denied the defendants’ motions for summary judgment with respect to these ongoing individual opt-out merchant cases, sending the cases back to their original jurisdictions for trials. The remaining opt-out merchants claim aggregate single damages of

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billion with respect to their Mastercard purchase volume. Mastercard would be responsible for % of any Mastercard-related judgment pursuant to the 2011 judgment and settlement sharing agreement discussed above. The first trial in the opt-out merchant cases, which will involve of the larger opt-out merchants, has been rescheduled for April 2026.

In 2021, the district court granted the Rules Relief Class’s motion for class certification. In 2024, the parties to the Rules Relief Class litigation entered into a settlement agreement to resolve the Rules Relief Class claims, which was subsequently denied by the court. The parties are in ongoing settlement discussions. The court has not yet scheduled a trial date.

As of June 30, 2025 and December 31, 2024, Mastercard accrued a liability of $ million and $ million, respectively, for the U.S. MDL Litigation Cases. The liability as of June 30, 2025 represents Mastercard’s best estimate of its probable liabilities in these matters and does not represent an estimate of a loss, if any, if the matters were litigated to a final outcome. Mastercard cannot estimate the potential liability if that were to occur.

Europe

Since 2012, a number of United Kingdom (“U.K.”) merchants filed claims or threatened litigation against Mastercard seeking damages for excessive costs paid for acceptance of Mastercard credit and debit cards arising out of alleged anti-competitive conduct with respect to, among other things, Mastercard’s cross-border interchange fees and its U.K. and Ireland domestic interchange fees (the “U.K. Merchant claimants”). In addition, Mastercard has faced similar filed or threatened litigation by merchants with respect to interchange rates in other countries in Europe (the “Pan-European Merchant claimants”). Mastercard has resolved a substantial amount of these damages claims through settlement or judgment. Following these settlements, approximately £ billion (approximately $ billion as of June 30, 2025) of unresolved damages claims remain. Mastercard continues to litigate with the remaining U.K. and Pan-European Merchant claimants and it has submitted statements of defense disputing liability and damages claims. A number of those matters are now progressing with motion practice and discovery. Hearings involving both liability and damages issues involving multiple merchant cases have been completed. In June 2025, the trial court in the U.K. merchant action decided against Mastercard on certain liability issues. This decision, which Mastercard is seeking to appeal, does not determine the outcome of these claims. The court must still determine additional liability and damages issues, some of which have yet to be tried.

Additional United Kingdom matters. Mastercard and Visa were served with a proposed collective action complaint in the U.K. on behalf of merchants seeking damages for commercial card transactions in both the U.K. and the European Union. In 2023, the plaintiffs filed a revised collective action application claiming damages against Mastercard in excess of £ billion (approximately $ billion as of June 30, 2025). In June 2024, the court granted the plaintiffs’ collective action application. Mastercard’s request for permission to appeal this ruling was denied, and a trial has not yet been scheduled.

In 2016, a proposed collective action was filed in the U.K. on behalf of U.K. consumers seeking damages for intra-European Economic Area (“EEA”) and domestic U.K. interchange fees that were allegedly passed on to consumers by merchants between 1992 and 2008. The complaint, which seeks to leverage the European Commission’s 2007 decision on intra-EEA interchange fees, claims damages in an amount that exceeds £ billion (approximately $ billion as of June 30, 2025). In 2021, the trial court issued a decision in which it granted class certification to the plaintiffs but narrowed the scope of the class. Since January 2023, the trial court has held hearings on various issues, including whether any causal connection existed between the levels of Mastercard’s intra-EEA interchange fees and U.K. domestic interchange fees and regarding Mastercard’s request to narrow the number of years of damages sought by the plaintiffs on statute of limitations grounds. In February 2024, the trial court ruled in Mastercard’s favor, finding no causal connection between the levels of Mastercard’s intra-EEA interchange fees and U.K. domestic interchange fees. In June 2024, the trial court ruled in Mastercard’s favor with respect to its request to dismiss of the plaintiffs’ damages claims on statute of limitations grounds. The plaintiffs’ request for permission to appeal this ruling was granted. In December 2024, the parties entered into a settlement agreement to resolve this matter. Mastercard recorded an accrual of £ million ($ million as of June 30, 2025) in December 2024 in connection with this settlement agreement. The trial court issued their written approval of the settlement in May 2025. The litigation funder for this claim is seeking permission to appeal (by way of judicial review) the trial court’s allocation of the settlement amount, including the allocation between the class and the funder. The funder is not seeking permission to appeal the trial court’s approval of the settlement itself.

Portugal. Mastercard has been named as a defendant in a proposed consumer collective action filed in Portugal on behalf of Portuguese consumers. The complaint, which seeks to leverage the 2019 resolution of the European Commission’s investigation of Mastercard’s central acquiring rules and interregional interchange fees, claims damages of approximately € billion (approximately $ billion as of June 30, 2025) for interchange fees that were allegedly passed on to consumers by Portuguese merchants for a period of approximately years. Mastercard has submitted a statement of defense that disputes both liability and damages.

Netherlands. In July 2025, Mastercard and Visa were served with a proposed collective action in the Netherlands on behalf of Dutch merchants. The complaint, which relates to interregional interchange fees covering the period from 1992 and ongoing, seeks declaratory relief and damages estimated in excess of € billion (approximately $ billion as of June 30, 2025).

Australia

In 2022, the Australian Competition & Consumer Commission (“ACCC”) filed a complaint targeting certain agreements entered into by Mastercard and certain Australian merchants related to Mastercard’s debit program. The ACCC alleges that by entering into such

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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

independent ATM operators filed a complaint styled as a class action lawsuit in the U.S. District Court for the District of Columbia against both Mastercard and Visa (the “ATM Operators Class Complaint”). Plaintiffs seek to represent a class of non-bank operators of ATM terminals that operate in the United States with the discretion to determine the price of the ATM access fee for the terminals they operate. 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. Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees.

Subsequently, multiple related complaints were filed in the U.S. District Court for the District of Columbia alleging both federal antitrust and multiple state unfair competition, consumer protection and common law claims against Mastercard and Visa on behalf of different putative classes of users of ATM services. The claims in these actions largely mirror the allegations made in the ATM Operators Class Complaint, although these complaints seek damages on behalf of consumers of ATM services who pay allegedly inflated ATM fees at both bank (“Bank ATM Consumer Class Complaint”) and non-bank (“Non-bank ATM Consumer Class Complaint”) ATM operators as a result of the defendants’ ATM rules. Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees. In 2023, the D.C. Circuit Court affirmed the district court’s previous order granting class certification to the plaintiffs in all class complaints.

In 2024, Mastercard executed a settlement agreement with the class lawyers representing the plaintiffs in the Bank ATM Consumer Class Complaint, subject to court approval, and recorded an accrual of $ million in connection with this matter. In June 2025, the court issued a decision approving the settlement.

In July 2025, Mastercard agreed to a term sheet with the class lawyers representing the plaintiffs in the Non-bank ATM Consumer Class Complaint to settle those claims. The parties are negotiating a settlement agreement that would be subject to court approval. During the second quarter of 2025, Mastercard recorded an accrual of $ million in connection with this matter.

The litigation with respect to the ATM Operators Class Complaint is ongoing. The plaintiffs in this class complaint allege over $ billion in single damages against all of the defendants.

U.S. Liability Shift Litigation

In 2016, a proposed U.S. merchant class action complaint was filed in federal court in California alleging that Mastercard, Visa, American Express and Discover (the “Network Defendants”), EMVCo, and a number of issuing banks (the “Bank Defendants”) engaged in a conspiracy to shift fraud liability for card present transactions from issuing banks to merchants not yet in compliance with the standards for EMV chip cards in the United States (the “EMV Liability Shift”), in violation of the Sherman Act and California law. Plaintiffs allege damages equal to the value of all chargebacks for which class members became liable as a result of the EMV Liability Shift on October 1, 2015. The plaintiffs seek treble damages, attorney’s fees and costs and an injunction against future violations of governing law. The district court denied the Network Defendants’ motion to dismiss the complaint, but granted such a motion for EMVCo and the Bank Defendants. In 2017, the district court transferred the case to New York so that discovery could be coordinated with the U.S. MDL Litigation Cases described above. In 2020, the district court issued an order granting the plaintiffs’ request for class certification. The plaintiffs have submitted expert reports that allege aggregate single damages in excess of $ billion against the Network Defendants. The Network Defendants submitted expert reports rebutting both liability and damages and all briefs on summary judgment have been submitted. In September 2024, the district court denied the Network Defendants’ motion for summary judgment. American Express and Discover have reached a settlement with the plaintiffs, subject to court approval.

Telephone Consumer Protection Class Action

Mastercard is a defendant in a Telephone Consumer Protection Act (“TCPA”) class action pending in Florida. The plaintiffs are individuals and businesses who allege that approximately unsolicited faxes were sent to them advertising a Mastercard co-brand card issued by First Arkansas Bank (“FAB”). The TCPA provides for uncapped statutory damages of $ per fax. Mastercard has asserted various defenses to the claims, and has notified FAB of an indemnity claim that it has (which FAB has disputed). In 2019, the Federal Communications Commission (“FCC”) issued a declaratory ruling clarifying that the TCPA does not apply to faxes sent to online fax services that are received online via email. In 2021, the trial court granted plaintiffs’ request for class certification, but narrowed the scope of the class to stand alone fax recipients only. Mastercard’s request to appeal that decision was denied. Briefing on plaintiffs’ motion to amend the class definition and Mastercard’s cross-motion to decertify the stand alone fax recipient class was completed in April 2023 and the parties await the court’s decision.

24 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15.

Risk mitigation arrangements applied to settlement exposure

()()

Net settlement exposure

$ $

Note 16.

MASTERCARD JUNE 30, 2025 FORM 10-Q 25

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

months.

In 2024, the Company entered into foreign exchange derivative contracts to hedge its exposure to variability in cash flows related to foreign denominated assets. Gains and losses resulting from changes in fair value of these contracts are deferred in accumulated other comprehensive income (loss) and are subsequently reclassified to the consolidated statements of operations when the hedged transactions impact earnings. Forward points are excluded from the effectiveness assessment and are amortized to general and administrative expenses on the consolidated statements of operations over the hedge period. The maximum term of these contracts was approximately years.

In addition, the Company may enter into interest rate derivative contracts to manage the effects of interest rate movements on the Company’s aggregate liability portfolio, including potential future debt issuances, and designate such derivatives as hedging instruments in a cash flow hedging relationship. Gains and losses resulting from changes in fair value of these contracts are deferred in accumulated other comprehensive income (loss) and are subsequently reclassified as an adjustment to interest expense over the respective terms of the hedged debt issuances.

Fair Value Hedges

The Company may enter into interest rate derivative contracts, including interest rate swaps, to manage the effects of interest rate movements on the fair value of the Company's fixed-rate debt and designate such derivatives as hedging instruments in a fair value hedging relationship. Changes in fair value of these contracts and changes in fair value of fixed-rate debt attributable to changes in the hedged benchmark interest rate generally offset each other and are recorded in interest expense on the consolidated statements of operations. Gains and losses related to the net settlements of interest rate swaps are also recorded in interest expense on the consolidated statements of operations. The periodic cash settlements are included in operating activities on the consolidated statements of cash flows.

The Company has an interest rate swap designated as a fair value hedge related to $ billion of the % Senior Notes due March 2050. In effect, the interest rate swap synthetically converts the fixed interest rate on this debt to a variable interest rate based on the SOFR Overnight Index Swap Rate. The net impacts to interest expense for the three and six months ended June 30, 2025 and 2024 were not material.

Net Investment Hedges

The Company may use foreign currency denominated debt and/or foreign exchange derivative contracts to hedge a portion of its net investment in foreign subsidiaries against adverse movements in exchange rates. The effective portion of the net investment hedge is recorded as a currency translation adjustment in accumulated other comprehensive income (loss). Forward points are excluded from the effectiveness assessment and are amortized to general and administrative expenses on the consolidated statements of operations over the hedge period. No amounts were recognized in earnings related to forward points for the three months ended June 30, 2025. The amounts recognized in earnings related to forward points for the six months ended June 30, 2025 and the three and six months ended June 30, 2024 were not material.

As of June 30, 2025 and December 31, 2024, the Company had € billion and € billion euro-denominated debt outstanding designated as hedges of a portion of its net investment in its European operations. In December 2024, the Company de-designated € million of the euro-denominated debt as net investment hedges to effectively manage changes in its net investment exposures in foreign subsidiaries. The euro-denominated debt was subsequently re-designated as a net investment hedge effective March 2025. For the three months ended June 30, 2025 and 2024, the Company recorded pre-tax net foreign currency gains (losses) of $() million and $ million in other comprehensive income (loss). For the six months ended June 30, 2025 and 2024, the Company recorded pre-tax net foreign currency gains (losses) of $() million and $ million in other comprehensive income (loss).

As of June 30, 2025 and December 31, 2024, the Company had net foreign currency gains of $ million and $ million, after tax, respectively, in accumulated other comprehensive income (loss) associated with this hedging activity.

Non-designated Derivatives

The Company may also enter into foreign exchange derivative contracts to serve as economic hedges, such as to offset possible changes in the value of monetary assets and liabilities due to foreign exchange fluctuations, without designating these derivative contracts as hedging instruments. In addition, the Company is subject to foreign exchange risk as part of its daily settlement activities. This risk is typically limited to a few days between when a payment transaction takes place and the subsequent settlement with customers. To manage this risk, the Company may enter into short duration foreign exchange derivative contracts based upon anticipated receipts and disbursements

26 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ $ $ $ $

Interest rate contracts in a fair value hedge 2

Foreign exchange contracts in a net investment hedge 1

Derivatives not designated as hedging instruments

Foreign exchange contracts 1

Total

$ $ $ $ $ $

1Foreign exchange derivative assets and liabilities are included within prepaid expenses and other current assets, other current liabilities and other liabilities on the consolidated balance sheets.

2Interest rate derivative liabilities are included within other current liabilities and other liabilities on the consolidated balance sheets.

MASTERCARD JUNE 30, 2025 FORM 10-Q 27

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

)$ Net revenue$()$

General and administrative 2

$()$ Interest rate contracts$ $ Interest expense$()$()Derivative financial instruments in a net investment hedge relationship:Foreign exchange contracts$ $()



	Gain (Loss) Recognized in Other Comprehensive Income (Loss)					Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	Six Months Ended June 30,				Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Earnings	Six Months Ended June 30,
	2025		2024			2025		2024
	(in millions)					(in millions)
Derivative financial instruments in a cash flow hedge relationship:
Foreign exchange contracts 1	$	()	$		Net revenue	$	()	$
					General and administrative 2	$	()	$

Interest rate contracts	$		$		Interest expense	$	()	$	()

Derivative financial instruments in a net investment hedge relationship:
Foreign exchange contracts	$		$	()

1Includes immaterial forward points excluded from the effectiveness assessment recognized in other comprehensive income (loss).

2Includes immaterial forward points excluded from the effectiveness assessment recognized in earnings.

The Company estimates that the pre-tax amount of the net deferred loss on cash flow hedges recorded in accumulated other comprehensive income (loss) at June 30, 2025 that will be reclassified into the consolidated statements of operations within the next 12 months is not material.

$()$ $

28 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17.

reportable operating segment, “Payment Solutions.”

$ $ $

Less:

Personnel

Professional fees

Data processing and telecommunications

Foreign exchange activity

Advertising and marketing

Depreciation and amortization

Provision for litigation

Investment income

()()()()

(Gains) losses on equity investments, net

()

Interest expense

Other (income) expense, net

()()()()

Income tax expense

Other segment items 1

Consolidated net income

$ $ $ $

1Includes fulfillment costs, occupancy costs, travel and meeting expenses and other overhead expenses.

MASTERCARD JUNE 30, 2025 FORM 10-Q 29

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management’s discussion and analysis of financial condition and results of operations

The following supplements management's discussion and analysis of Mastercard Incorporated for the year ended December 31, 2024 as contained in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 12, 2025 (“2024 Form 10-K”). It also should be read in conjunction with the consolidated financial statements and notes of Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (together, “Mastercard” or the “Company”), included elsewhere in this Report. Percentage changes provided throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” were calculated on amounts rounded to the nearest thousand.

Global Economic, Political, Financial and Societal Events and Conditions

We continue to monitor government actions and changes in policies across the globe, including those related to tariffs. The extent to which these developments affect our business and results of operations, if at all, are uncertain and cannot be predicted at this time.

Financial Results Overview

The following table provides a summary of our key GAAP operating results, as reported:


	Three Months Ended June 30,						Increase/(Decrease)	Six Months Ended June 30,						Increase/(Decrease)
	2025			2024				2025			2024
	(in millions, except percentages and per share data)
Net revenue	$	8,133		$	6,961		17%	$	15,383		$	13,309		16%
Operating expenses	$	3,356		$	2,925		15%	$	6,457		$	5,669		14%
Operating income	$	4,777		$	4,036		18%	$	8,926		$	7,640		17%
Operating margin	58.7		%	58.0		%	0.8 ppt	58.0		%	57.4		%	0.6 ppt
Income tax expense	$	971		$	681		42%	$	1,722		$	1,228		40%
Effective income tax rate	20.8		%	17.3		%	3.5 ppt	19.8		%	16.4		%	3.4 ppt
Net income	$	3,701		$	3,258		14%	$	6,981		$	6,269		11%
Diluted earnings per share	$	4.07		$	3.50		16%	$	7.66		$	6.72		14%
Diluted weighted-average shares outstanding	909			930			(2)%	911			933			(2)%

Note: Table may not sum due to rounding.

The following table provides a summary of our key non-GAAP operating results1, adjusted to exclude the impact of gains and losses on our equity investments, Special Items (which represent litigation judgments and settlements and certain one-time items) and the related tax impacts on our non-GAAP adjustments. In addition, we have presented growth rates, adjusted for the impact of currency:


	Three Months Ended June 30,						Increase/(Decrease)		Six Months Ended June 30,						Increase/(Decrease)
	2025			2024			As adjusted	Currency-neutral	2025			2024			As adjusted	Currency-neutral
	(in millions, except percentages and per share data)
Net revenue	$	8,133		$	6,961		17%	16%	$	15,383		$	13,309		16%	16%
Adjusted operating expenses	$	3,260		$	2,828		15%	14%	$	6,210		$	5,445		14%	14%
Adjusted operating margin	59.9		%	59.4		%	0.5 ppt	0.5 ppt	59.6		%	59.1		%	0.5 ppt	0.7 ppt
Adjusted effective income tax rate	20.9		%	17.5		%	3.4 ppt	3.4 ppt	20.1		%	16.7		%	3.3 ppt	3.5 ppt
Adjusted net income	$	3,769		$	3,341		13%	12%	$	7,175		$	6,434		12%	12%
Adjusted diluted earnings per share	$	4.15		$	3.59		16%	14%	$	7.87		$	6.90		14%	15%

Note: Table may not sum due to rounding.

1 See “Non-GAAP Financial Information” for further information on our non-GAAP adjustments and the reconciliation to GAAP reported amounts.

30 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Key highlights for the three and six months ended June 30, 2025, versus the comparable periods in 2024:


Net revenue
Three Months Ended June 30, 2025
GAAP	Non-GAAP (currency-neutral)	Both the as-reported and currency-neutral net revenue increases were attributable to growth in our payment network and value-added services and solutions.
up 17%	up 16%

Six Months Ended June 30, 2025
GAAP	Non-GAAP (currency-neutral)	Both the as-reported and currency-neutral net revenue increases were attributable to growth in our payment network and value-added services and solutions.
up 16%	up 16%


Operating expenses	Adjusted operating expenses
Three Months Ended June 30, 2025
GAAP	Non-GAAP (currency-neutral)	Both the as-reported and as-adjusted operating expenses increases were primarily due to higher general and administrative expenses.
up 15%	up 14%

Six Months Ended June 30, 2025
GAAP	Non-GAAP (currency-neutral)	Both the as-reported and as-adjusted operating expenses increases were primarily due to higher general and administrative expenses.
up 14%	up 14%


Effective income tax rate	Adjusted effective income tax rate
Three Months Ended June 30, 2025		Both the as-reported and as-adjusted effective income tax rates were higher versus the comparable period in 2024, primarily due to the 15% global minimum tax (“Pillar 2 Rules”) that took effect in 2025.
GAAP	Non-GAAP
20.8%	20.9%
up 3.5 ppt	up 3.4 ppt

Six Months Ended June 30, 2025		Both the as-reported and as-adjusted effective income tax rates were higher versus the comparable period in 2024, primarily due to the Pillar 2 Rules that took effect in 2025.
GAAP	Non-GAAP
19.8%	20.1%
up 3.4 ppt	up 3.3 ppt

Other financial highlights for the six months ended June 30, 2025 were as follows:

•We generated net cash flows from operations of $7.0 billion.

•We repurchased 8.9 million shares of our common stock for $4.8 billion and paid dividends of $1.4 billion.

•We completed a debt offering in February 2025 for an aggregate principal amount of $1.25 billion.

MASTERCARD JUNE 30, 2025 FORM 10-Q 31

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Non-GAAP Financial Information

Non-GAAP financial information is defined as a numerical measure of a company’s performance that excludes or includes amounts so as to be different than the most comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”). As described more fully below, our non-GAAP financial measures exclude, where applicable, the impact of gains and losses on our equity investments, which includes mark-to-market fair value adjustments, impairments and gains and losses upon disposition, as well as the related tax impacts. Our non-GAAP financial measures also exclude, where applicable, the impact of special items, which represent litigation judgments and settlements and/or certain one-time items, as well as the related tax impacts (“Special Items”). We also present growth rates adjusted for the impact of currency, which is a non-GAAP financial measure. We believe that the non-GAAP financial measures presented facilitate an understanding of our operating performance and provide a meaningful comparison of our results between periods. We use non-GAAP financial measures to evaluate our ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of performance-based compensation, among other things. We excluded these items because management evaluates the underlying operations and performance of the Company separately from these recurring and nonrecurring items. Operating expenses, operating margin, other income (expense), effective income tax rate, net income and diluted earnings per share, each as adjusted for the impact of gains and losses on our equity investments, Special Items and/or the impact of currency, should not be relied upon as substitutes for measures calculated in accordance with GAAP.

Our non-GAAP financial measures for the comparable periods exclude the impact of the following:

Gains and Losses on Equity Investments

•In the three and six months ended June 30, 2025, we recorded net gains of $4 million ($5 million after tax, or $0.01 per diluted share) and net losses of $25 million ($19 million after tax, or $0.02 per diluted share), respectively, primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.

•In the three and six months ended June 30, 2024, we recorded net losses of $13 million ($10 million after tax, or $0.01 per diluted share) and $7 million ($4 million after tax, or an immaterial impact per diluted share), respectively, primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.

Special Items

Litigation provisions

•In the three months ended June 30, 2025, we recorded charges of $96 million ($73 million after tax, or $0.08 per diluted share), primarily due to a legal provision associated with the ATM non-discrimination rule surcharge complaints. In the six months ended June 30, 2025, we recorded charges of $247 million ($174 million after tax, or $0.19 per diluted share), primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation and a legal provision associated with the ATM non-discrimination rule surcharge complaints.

•In the three months ended June 30, 2024, we recorded charges of $98 million ($73 million after tax, or $0.08 per diluted share), primarily as a result of settlements with a number of U.K. merchants. In the six months ended June 30, 2024, we recorded charges of $224 million ($160 million after tax, or $0.17 per diluted share), primarily as a result of settlements with a number of U.K. merchants and a legal provision associated with the ATM non-discrimination rule surcharge complaints.

See Note 5 (Investments) and Note 14 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part I, Item 1 of this Report for further discussion related to certain of the items discussed above.

Currency-neutral Growth Rates

Currency-neutral growth rates are non-GAAP financial measures and are calculated by remeasuring the prior period’s results using the current period’s exchange rates for both the translational and transactional impacts on operating results. The impact of currency translation represents the effect of translating operating results where the functional currency is different from our U.S. dollar reporting currency. The impact of the transactional currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency of the entity. The impact of the related realized gains and losses resulting from our foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses) is recognized in the respective financial statement line item on the consolidated statements of operations when the underlying forecasted transactions impact earnings.

The translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments as specified in the preceding paragraph (collectively, the “Currency Impact”) has been excluded from our currency-neutral growth rates and has been identified in the “Non-GAAP Reconciliations” tables below and our “Drivers of Change” tables. See “Foreign Currency - Currency Impact” for further information on our currency impacts and “Financial Results - Net Revenue” and “Financial Results - Operating Expenses” for our "Drivers of Change” tables.

32 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, 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



	Three Months Ended June 30, 2024
	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	$	2,925	58.0	%	$	(97)	17.3	%	$	3,258	$	3.50
(Gains) losses on equity investments	**		**		13		—	%	10		0.01
Litigation provisions	(98)		1.4	%	**		0.2	%	73		0.08

Adjusted - Non-GAAP	$	2,828	59.4	%	$	(84)	17.5	%	$	3,341	$	3.59


	Six Months Ended June 30, 2024
		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		$	5,669		57.4	%		$	(143)		16.4	%	$	6,269	$	6.72
(Gains) losses on equity investments		**			**			7			—	%	4		—
Litigation provisions		(224)			1.7	%		**			0.3	%	160		0.17

	(0.2) ppt			(0.1) ppt			—%			—%



	(0.1) ppt			(0.1) ppt			—%			—%



	0.7 ppt			3.5 ppt			12%			15%

Note: Tables may not sum due to rounding.

** Not applicable.

Key Metrics and Drivers

In addition to the financial measures described above in “Financial Results Overview”, we review the following metrics to evaluate and identify trends in our business, measure our performance, prepare financial projections and make strategic decisions. We believe that the key metrics presented facilitate an understanding of our operating and financial performance and provide a meaningful comparison of our results between periods.

Operating Margin measures how much profit we make on each dollar of sales after our operating costs but before other income (expense) and income tax expense. Operating margin is calculated by dividing our operating income by net revenue.

Key Drivers

Gross Dollar Volume (“GDV”) measures dollar volume of activity, including both domestic and cross-border volume, on cards carrying our brands during the period, on a local currency basis and U.S. dollar-converted basis. GDV represents purchase volume plus cash volume; “purchase volume” means the aggregate dollar amount of purchases made with Mastercard-branded cards for the relevant period; and “cash volume” means the aggregate dollar amount of cash disbursements and includes the impact of balance transfers and convenience checks obtained with Mastercard-branded cards for the relevant period. Information denominated in U.S. dollars relating to GDV is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which our volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. We report period-over-period rates of change in purchase volume and cash volume on the basis of local currency information, in order to eliminate the impact of changes in the value of currencies against the U.S. dollar in calculating such rates of change. Data used in the calculation of GDV is provided by our customers and is subject to verification by Mastercard and partial cross-checking against information provided by Mastercard’s transaction switching systems. All data is subject to revision and amendment by Mastercard or our customers.

Cross-border Volume Growth measures the growth of cross-border dollar volume during the period, on a local currency basis and U.S. dollar-converted basis, for all Mastercard-branded programs.

Switched Transactions measures the number of transactions switched by Mastercard, which is defined as the number of transactions initiated and switched through our network during the period.

34 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following tables provide a summary of the growth trends in our key drivers:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	Increase/(Decrease)				Increase/(Decrease)
	USD	Local	USD	Local	USD	Local	USD	Local
Mastercard-branded GDV growth 1	9%	9%	6%	9%	7%	9%	7%	10%
United States	6%	6%	7%	7%	7%	7%	6%	6%
Worldwide less United States	11%	10%	6%	11%	8%	10%	8%	12%

Cross-border volume growth 1	19%	15%	15%	17%	15%	15%	17%	18%


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
	Increase/(Decrease)		Increase/(Decrease)
Switched transactions growth	10%	11%	10%	12%

1 Excludes volume generated by Maestro and Cirrus cards.

Key Metrics related to the Payment Network

Assessments represent agreed-upon standard pricing provided to our customers based on various forms of payment-related activity. Assessments are used internally by management to monitor operating performance as it allows for comparability and provides visibility into cardholder trends. Assessments do not represent our net revenue.

The following provides additional information on our key metrics related to the payment network:

•Domestic assessments are charges based on activity related to cards that carry the Company’s brands where the merchant country and the country of issuance are the same. These assessments are primarily driven by the domestic dollar volume of activity (e.g., domestic purchase volume, domestic cash volume) or the number of cards issued.

•Cross-border assessments are charges based on activity related to cards that carry the Company’s brands where the merchant country and the country of issuance are different. These assessments are primarily driven by the cross-border dollar volume of activity (e.g., cross-border purchase volume, cross-border cash volume).

•Transaction processing assessments are charges primarily driven by the number of switched transactions on our payment network. 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.

•Other network assessments are charges for licensing, implementation and other franchise fees.

The following table provides a summary of our key metrics related to the payment network:


	Three Months Ended June 30,				Increase/(Decrease)		Six Months Ended June 30,				Increase/(Decrease)
	2025		2024		As reported	Currency-neutral	2025		2024		As reported	Currency-neutral
	($ in millions)
Domestic assessments	$	2,789	$	2,596	7%	9%	$	5,447	$	5,066	8%	10%
Cross-border assessments	2,848		2,433		17%	15%	5,443		4,671		17%	17%
Transaction processing assessments	3,971		3,324		19%	18%	7,498		6,410		17%	17%
Other network assessments	260		244		7%	7%	491		470		5%	5%

%%%%

Note: Tables may not sum due to rounding.

** Not applicable.

1Includes the translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments. See “Non-GAAP Financial Information - Currency-neutral Growth Rates” for further information on our currency impact non-GAAP adjustment.

MASTERCARD JUNE 30, 2025 FORM 10-Q 37

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating Expenses

For the three months ended June 30, 2025, operating expenses increased 15% versus the comparable period in 2024. Adjusted operating expenses increased 15%, or 14% on a currency-neutral basis, versus the comparable period in 2024, which included a 4 percentage point increase from Acquisitions.

For the six months ended June 30, 2025, operating expenses increased 14% versus the comparable period in 2024. Adjusted operating expenses increased 14%, on both an as-reported and currency-neutral basis, versus the comparable period in 2024, which included a 4 percentage point increase from Acquisitions.

The components of operating expenses were as follows:


	Three Months Ended June 30,				Increase/ (Decrease)	Six Months Ended June 30,				Increase/ (Decrease)
	2025		2024			2025		2024
	($ in millions)
General and administrative	$	2,766	$	2,418	14%	$	5,289	$	4,704	12%
Advertising and marketing	213		184		15%	365		300		22%
Depreciation and amortization	281		225		25%	556		441		26%
Provision for litigation	96		98		(2)%	247		224		10%
Total operating expenses	3,356		2,925		15%	6,457		5,669		14%
Special Items 1	(96)		(98)		(2)%	(247)		(224)		10%
Adjusted total operating expenses 1	$	3,260	$	2,828	15%	$	6,210	$	5,445	14%

Note: Table may not sum due to rounding.

1 See “Non-GAAP Financial Information” for further information on our non-GAAP adjustments and the reconciliation to GAAP reported amounts.

Drivers of Change

The following tables summarize the drivers of change in operating expenses:



	Three Months Ended June 30, 2025
	Increase/(Decrease)
	Operational	Acquisitions	Currency impact 1, 2	Special Items 2	Total
General and administrative	10%	4%	1%	**	14%
Advertising and marketing	10%	3%	2%	**	15%
Depreciation and amortization	10%	13%	2%	**	25%
Provision for litigation	**	**	**	(2)%	(2)%
Total operating expenses	10%	4%	1%	(1)%	15%


	Six Months Ended June 30, 2025
	Increase/(Decrease)
	Operational	Acquisitions	Currency impact 1, 2	Special Items 2	Total
General and administrative	9%	4%	—%	**	12%
Advertising and marketing	18%	3%	1%	**	22%
Depreciation and amortization	12%	13%	1%	**	26%
Provision for litigation	**	**	**	10%	10%
Total operating expenses	10%	4%	—%	—%	14%

Note: Tables may not sum due to rounding.

** Not applicable.

1Represents the translational and transactional impact of currency.

2See “Non-GAAP Financial Information” for further information on our non-GAAP adjustments and the reconciliation to GAAP reported amounts.

38 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General and Administrative

For the three months ended June 30, 2025, general and administrative expenses increased 14%, on both an as-reported and currency-neutral basis, versus the comparable period in 2024, which included a 4 percentage point increase from Acquisitions. The remaining increase was primarily due to higher personnel costs to support the continued investment in our strategic initiatives across payments and value-added services and solutions.

For the six months ended June 30, 2025, general and administrative expenses increased 12%, or 13% on a currency-neutral basis, versus the comparable period in 2024, which included a 4 percentage point increase from Acquisitions. The remaining increase was primarily due to higher personnel costs to support the continued investment in our strategic initiatives across payments and value-added services and solutions.

The components of general and administrative expenses were as follows:


	Three Months Ended June 30,				Increase/ (Decrease)	Six Months Ended June 30,				Increase/(Decrease)
	2025		2024			2025		2024
	($ in millions)
Personnel	$	1,852	$	1,607	15%	$	3,540	$	3,121	13%
Professional fees	107		113		(5)%	220		229		(4)%
Data processing and telecommunications	314		278		13%	606		541		12%
Foreign exchange activity 1	41		5		**	42		33		30%
Other	452		415		9%	881		780		13%
Total general and administrative expenses	$	2,766	$	2,418	14%	$	5,289	$	4,704	12%

** Not meaningful.

1Foreign exchange activity includes the impact of remeasurement of assets and liabilities denominated in foreign currencies net of the impact of gains and losses on foreign exchange derivative contracts. See Note 16 (Derivative and Hedging Instruments) to the consolidated financial statements included in Part I, Item 1 for further discussion.

Advertising and Marketing

For the three months ended June 30, 2025, advertising and marketing expenses increased 15%, or 13% on a currency-neutral basis, versus the comparable period in 2024, which included a 3 percentage point increase from Acquisitions. The remaining increase was primarily due to an increase in spending on sponsorships and marketing campaigns.

For the six months ended June 30, 2025, advertising and marketing expenses increased 22%, or 21% on a currency-neutral basis, versus the comparable period in 2024, which included a 3 percentage point increase from Acquisitions. The remaining increase was primarily due to an increase in spending on sponsorships and marketing campaigns.

Depreciation and Amortization

For the three months ended June 30, 2025, depreciation and amortization expenses increased 25%, or 23% on a currency-neutral basis, versus the comparable period in 2024, which included a 13 percentage point increase from Acquisitions. The remaining increase was primarily due to higher capitalized software versus the comparable period in 2024, driven by the continued growth of our business.

For the six months ended June 30, 2025, depreciation and amortization expenses increased 26%, on both an as-reported and currency-neutral basis, versus the comparable period in 2024, which included a 13 percentage point increase from Acquisitions. The remaining increase was primarily due to higher capitalized software versus the comparable period in 2024, driven by the continued growth of our business.

Provision for Litigation

For the three months ended June 30, 2025, we recorded charges of $96 million, primarily due to a legal provision associated with the ATM non-discrimination rule surcharge complaints. For the six months ended June 30, 2025, we recorded charges of $247 million, primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation and a legal provision associated with the ATM non-discrimination rule surcharge complaints. See “Non-GAAP Financial Information” in this section and Note 14 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part I, Item 1 of this Report for further discussion.

MASTERCARD JUNE 30, 2025 FORM 10-Q 39

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other Income (Expense)

The components of total other income (expense) were as follows:


	Three Months Ended June 30,				Favorable/ (Unfavorable)		Six Months Ended June 30,				Favorable/ (Unfavorable)
	2025		2024				2025		2024
	(in millions)
Investment income	$	70	$	60	$	10	$	158	$	155	$	3
Gains (losses) on equity investments, net	4		(13)		17		(25)		(7)		(18)
Interest expense	(195)		(153)		(42)		(377)		(303)		(74)
Other income (expense), net	16		9		7		21		12		9
Total other income (expense)	(105)		(97)		(8)		(223)		(143)		(80)
(Gains) losses on equity investments 1	(4)		13		(17)		25		7		18


Adjusted total other income (expense) 1	$	(109)	$	(84)	$	(25)	$	(198)	$	(136)	$	(62)

Note: Table may not sum due to rounding.

1 See “Non-GAAP Financial Information” for further information on our non-GAAP adjustments and the reconciliation to GAAP reported amounts.

Income Taxes

The effective income tax rates for the three months ended June 30, 2025 and 2024 were 20.8% and 17.3%, respectively. The adjusted effective income tax rates for the three months ended June 30, 2025 and 2024 were 20.9% and 17.5%, respectively. The effective income tax rates for the six months ended June 30, 2025 and 2024 were 19.8% and 16.4%, respectively. The adjusted effective income tax rates for the six months ended June 30, 2025 and 2024 were 20.1% and 16.7%, respectively. Both the as-reported and as-adjusted effective income tax rates for the three and six months ended June 30, 2025 were higher versus the comparable periods in 2024, primarily due to the 15% global minimum tax (“Pillar 2 Rules”) that took effect in 2025 in Singapore and various other jurisdictions. The Pillar 2 Rules primarily offset the reduction to our effective income tax rate resulting from our incentive grant received from the Singapore Ministry of Finance. See Note 20 (Income Taxes) to the consolidated financial statements included in Part II, Item 8 of our 2024 Form 10-K for further information about this incentive grant.

In July 2025, the U.S. enacted the One Big Beautiful Bill Act (“OBBBA”). While we continue to analyze the impacts of the OBBBA, at this time it is not expected to have a material impact on our financial statements.

Liquidity and Capital Resources

We rely on existing liquidity (our cash, cash equivalents and investments), cash generated from operations and access to capital to fund our global operations, credit and settlement exposure, capital expenditures, investments in our business and current and potential obligations. The following table summarizes the cash, cash equivalents, investments and credit available to us:


	June 30, 2025		December 31, 2024
	(in billions)
Cash, cash equivalents and investments 1	$	9.4	$	8.8
Unused line of credit	$	8.0	$	8.0

1 Investments include available-for-sale securities and held-to-maturity securities. This amount excludes restricted cash and restricted cash equivalents and restricted security deposits held for customers at June 30, 2025 and December 31, 2024 of $2.5 billion and $2.4 billion, respectively.

We believe that our existing liquidity, our cash flow generating capabilities, and our access to capital resources are sufficient to satisfy our future operating cash needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with our existing operations and potential obligations, which include litigation provisions and credit and settlement exposure.

Our liquidity and access to capital could be negatively impacted by global credit market conditions. We guarantee the settlement of many of the transactions between our customers. Historically, payments under these guarantees have not been significant; however, historical trends may not be indicative of potential future losses. The risk of loss on these guarantees is specific to individual customers, but may also be driven by regional or global economic and market conditions, including, but not limited to the health of the financial institutions in a country or region. See Note 15 (Settlement and Other Risk Management) to the consolidated financial statements in Part I, Item 1 for a description of these guarantees.

Our liquidity and access to capital could also be negatively impacted by the outcome of any of the legal or regulatory proceedings to which we are a party. For additional discussion of these and other risks facing our business, see Part I, Item 1A - Risk Factors of our 2024 Form 10-K and Note 14 (Legal and Regulatory Proceedings) to the consolidated financial statements in Part I, Item 1 of this Report.

40 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cash Flows

The table below shows a summary of the cash flows from operating, investing and financing activities:


	Six Months Ended June 30,
	2025		2024
	(in millions)
Net cash provided by operating activities	$	6,983	$	4,810
Net cash used in investing activities	$	(567)	$	(468)
Net cash used in financing activities	$	(5,993)	$	(5,938)

Net cash provided by operating activities increased $2,173 million for the six months ended June 30, 2025, versus the comparable period in 2024, primarily due to higher net income after adjusting for non-cash items as well as less cash paid for litigation settlements.

Net cash used in investing activities increased $99 million for the six months ended June 30, 2025, versus the comparable period in 2024, primarily due to lower proceeds from maturities and sales of investment securities, partially offset by lower purchases of property and equipment and fewer purchases of investment securities.

Net cash used in financing activities increased $55 million for the six months ended June 30, 2025, versus the comparable period in 2024, primarily due to higher cash paid for repurchases of our Class A common stock and dividends, partially offset by higher proceeds from debt in the current year and higher repayment of debt in the prior year.

Debt and Credit Availability

In February 2025, we issued $300 million principal amount of Floating Rate Notes due March 2028, $450 million principal amount of 4.550% notes due March 2028 and $500 million principal amount of 4.950% notes due March 2032 (collectively, the “2025 USD Notes”). The net proceeds from the issuance of the 2025 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $1.242 billion.

In March 2025, $750 million of principal related to the 2019 USD Notes matured and was paid. Our total debt outstanding at June 30, 2025 and December 31, 2024 was $19.0 billion and $18.2 billion, respectively, with the earliest maturity of $750 million of principal occurring in November 2026.

As of June 30, 2025, we have a commercial paper program (the “Commercial Paper Program”), under which we are authorized to issue up to $8 billion in outstanding notes, with maturities up to 397 days from the date of issuance. In conjunction with the Commercial Paper Program, we have a committed unsecured $8 billion revolving credit facility (the “Credit Facility”) that expires in November 2029.

Borrowings under the Commercial Paper Program and the Credit Facility are to be used to provide liquidity for general corporate purposes, including providing liquidity in the event of one or more settlement failures by our customers. In addition, we may borrow and repay amounts under these facilities for business continuity purposes. We had no borrowings outstanding under the Commercial Paper Program or the Credit Facility at June 30, 2025 and December 31, 2024.

See Note 9 (Debt) to the consolidated financial statements included in Part I, Item 1 for further discussion on our debt and Note 15 (Debt) to the consolidated financial statements included in Part II, Item 8 of our 2024 Form 10-K for further discussion on our debt, the Commercial Paper Program and the Credit Facility.

Dividends and Share Repurchases

We have historically paid quarterly dividends on our outstanding Class A common stock and Class B common stock. Subject to legally available funds, we intend to continue to pay a quarterly cash dividend. The declaration and payment of future dividends is at the sole discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, available cash and current and anticipated cash needs.

Aggregate payments for quarterly dividends for the six months ended June 30, 2025 totaled $1,385 million.

On December 17, 2024, our Board of Directors declared a quarterly cash dividend of $0.76 per share paid on February 7, 2025 to holders of record as of January 9, 2025 of our Class A common stock and Class B common stock. The aggregate amount of this dividend was $694 million.

On February 10, 2025, our Board of Directors declared a quarterly cash dividend of $0.76 per share paid on May 9, 2025 to holders of record as of April 9, 2025 of our Class A common stock and Class B common stock. The aggregate amount of this dividend was $691 million.

On June 24, 2025, our Board of Directors declared a quarterly cash dividend of $0.76 per share payable on August 8, 2025 to holders of record as of July 9, 2025 of our Class A common stock and Class B common stock. The aggregate amount of this dividend is $687 million.

MASTERCARD JUNE 30, 2025 FORM 10-Q 41

PART I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Repurchased shares of our common stock are considered treasury stock. In December 2024 and 2023, our Board of Directors approved share repurchase programs of our Class A common stock authorizing us to repurchase up to $12.0 billion and $11.0 billion, respectively. The program approved in 2024 became effective in April 2025 after the completion of the program approved in 2023. The timing and actual number of additional shares repurchased will depend on a variety of factors, including cash requirements to meet the operating needs of the business, legal requirements, as well as the share price and economic and market conditions. The following table summarizes our share repurchase authorizations and repurchase activity of our Class A common stock through June 30, 2025, unless otherwise noted:


	(in millions, except per share data)
Remaining authorization at December 31, 2024	$	15,188
Dollar-value of shares repurchased for the six months ended June 30, 2025	$	4,838
Remaining authorization at June 30, 2025	$	10,350
Shares repurchased for the six months ended June 30, 2025	8.9
Average price paid per share for the six months ended June 30, 2025	$	542.27
Dollar-value of shares repurchased July 1, 2025 through July 28, 2025	$	1,004

Note: Table may not sum due to rounding.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, if any, and the potential impact of these pronouncements refer to Note 1 (Summary of Significant Accounting Policies) to the consolidated financial statements in Part I, Item 1.

Item 3. Quantitative and qualitative disclosures about market risk

Market risk is the potential for economic losses to be incurred on market risk sensitive instruments arising from adverse changes in factors such as foreign currency exchange rates and interest rates. Our exposure to market risk from changes in foreign currency exchange rates and interest rates is limited. Management monitors risk exposures on an ongoing basis and establishes and oversees the implementation of policies governing our funding, investments and use of derivative financial instruments to manage these risks.

Foreign currency and interest rate exposures are managed through our risk management activities, which are discussed further in Note 16 (Derivative and Hedging Instruments) to the consolidated financial statements included in Part I, Item 1.

Foreign Exchange Risk

We enter into foreign exchange derivative contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. We may also enter into foreign currency derivative contracts to offset possible changes in value of assets and liabilities due to foreign exchange fluctuations. The objective of these activities is to reduce our exposure to gains and losses resulting from fluctuations of foreign currencies against our functional currencies, principally the U.S. dollar and euro. The effect of a hypothetical 10% adverse change in the value of the functional currencies could result in a fair value loss of approximately $522 million and $475 million on our foreign exchange derivative contracts outstanding at June 30, 2025 and December 31, 2024, respectively, before considering the offsetting effect of the underlying hedged activity.

We are also subject to foreign exchange risk as part of our daily settlement activities. To manage this risk, we enter into short duration foreign exchange derivative contracts based upon anticipated receipts and disbursements for the respective currency position. This risk is typically limited to a few days between when a payment transaction takes place and the subsequent settlement with our customers. A hypothetical 10% adverse change in the value of the functional currencies would not have a material impact to the fair value of our short duration foreign exchange derivative contracts outstanding at June 30, 2025 and December 31, 2024.

We are further exposed to foreign exchange rate risk related to translation of our net investment in foreign subsidiaries where the functional currency is different than our U.S. dollar reporting currency. To manage this risk, we may enter into foreign exchange derivative contracts to hedge a portion of our net investment in foreign subsidiaries. As of June 30, 2025, we did not have any foreign exchange derivative contracts designated as a net investment hedge. The effect of a hypothetical 10% adverse change in the value of the U.S. dollar could result in a fair value loss of approximately $279 million on our foreign exchange derivative contracts designated as a net investment hedge at December 31, 2024, before considering the offsetting effect of the underlying hedged activity.

42 MASTERCARD JUNE 30, 2025 FORM 10-Q

PART I

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our available-for-sale debt investments include fixed and variable rate securities that are sensitive to interest rate fluctuations. Our policy is to invest in high quality securities, while providing adequate liquidity and maintaining diversification to avoid significant exposure. A hypothetical 100 basis point adverse change in interest rates would not have a material impact to the fair value of our investments at June 30, 2025 and December 31, 2024.

We are also exposed to interest rate risk related to our fixed-rate debt. To manage this risk, we may enter into interest rate derivative contracts to hedge a portion of our fixed-rate debt that is exposed to changes in fair value attributable to changes in a benchmark interest rate. The effect of a hypothetical 100 basis point adverse change in interest rates could result in a fair value loss of approximately $16 million and $20 million on the fair value of our interest rate derivative contracts designated as a fair value hedge of our fixed-rate debt at June 30, 2025 and December 31, 2024, respectively, before considering the offsetting effect of the underlying hedged activity.

Item 4. Controls and procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information that is required to be disclosed in the reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to ensure that information required to be disclosed is accumulated and communicated to management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding disclosure. The President and Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date.

Changes in Internal Control over Financial Reporting

There was no change in Mastercard’s internal control over financial reporting that occurred for the three months ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, Mastercard's internal control over financial reporting.

MASTERCARD JUNE 30, 2025 FORM 10-Q 43

PART II

Item 1. Legal proceedings

Item 1A. Risk factors

Item 2. Unregistered sales of equity securities and use of proceeds

Item 5. Other information

Item 6. Exhibits

Signatures

PART II

ITEM 1. LEGAL PROCEEDINGS

Item 1. Legal proceedings

Refer to Note 14 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part I, Item 1.

Item 1A. Risk factors

For a discussion of our risk factors, see Part I, Item 1A - Risk Factors of our 2024 Form 10-K.

Item 2. Unregistered sales of equity securities and use of proceeds

Issuer Purchases of Equity Securities

For the second quarter of 2025, we repurchased 4.2 million shares for $2.3 billion at an average price of $543.25 per share of Class A common stock. The following table presents our repurchase activity on a cash basis for the second quarter of 2025:


Period	Total Number of Shares Purchased	Average Price Paid per Share (including commission cost)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Dollar Value of Shares that may yet be Purchased under the Plans or Programs 1
April 1 - 30	1,871,420	$	517.89	1,871,420	$	11,669,520,106
May 1 - 31	950,934	$	566.86	950,934	$	11,130,473,922
June 1 - 30	1,391,056	$	561.23	1,391,056	$	10,349,766,340
Total	4,213,410	$	543.25	4,213,410

1 Dollar value of shares that may yet be purchased under the repurchase programs is as of the end of the period. In December 2024 and 2023, our Board of Directors approved share repurchase programs of our Class A common stock authorizing us to repurchase up to $12.0 billion and $11.0 billion, respectively.

Item 5. Other information

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements

or trading arrangements for the sale of shares of our common stock.

Action

Date

Plans

Number of Securities to be Sold

Expiration

Rule 10b5-1 1

Non-Rule 10b5-1 2

Up to (i) 35,079 shares of Class A common stock underlying employee stock options and (ii) 6,758 shares of Class A common stock

The earlier of (i) the date when all securities under the plan are exercised and sold and (ii) February 28, 2026

1Intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

2Not intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Other Information

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, we hereby incorporate by reference herein the disclosure contained in Exhibit 99.1 of this Report.

Item 6. Exhibits

Refer to the Exhibit Index included herein.

MASTERCARD JUNE 30, 2025 FORM 10-Q 45

PART II

EXHIBIT INDEX

Exhibit index


Exhibit Number						Exhibit Description
3.1						Restated Certificate of Incorporation of Mastercard Incorporated (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on June 26 , 2025 (File No. 001-32877)).
3.2						Amended and Restated By-Laws of Mastercard Incorporated (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on June 26 , 2025 (File No. 001-32877)).
31.1*						Certification of Michael Miebach, President and Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Sachin Mehra, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Michael Miebach, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Sachin Mehra, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1*						Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012.
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document

* Filed or furnished herewith.

The agreements and other documents filed as exhibits to this Report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and should not be relied upon for that purpose. In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

46 MASTERCARD JUNE 30, 2025 FORM 10-Q

SIGNATURES

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MASTERCARD INCORPORATED

(Registrant)

Date:

July 31, 2025

By:

/S/ MICHAEL MIEBACH

Michael Miebach

President and Chief Executive Officer

(Principal Executive Officer)

Date:

July 31, 2025

By:

/S/ SACHIN MEHRA

Sachin Mehra

Chief Financial Officer

(Principal Financial Officer)

Date:

July 31, 2025

By:

/S/ SANDRA ARKELL

Sandra Arkell

Corporate Controller

(Principal Accounting Officer)

MASTERCARD JUNE 30, 2025 FORM 10-Q 47

Mastercard Inc - Quarter Report: 2025 June (Form 10-Q)

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