Item 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



Consolidated Statements of Changes in Equity (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, 2026









Balance at beginning of period	$	—	$	—	$	6,843	$	(87,342)	$	88,146	$	(928)	$	6,719	$	3	$	6,722
Net income	—		—		—		—		4,388		—		4,388		—		4,388
Activity related to non-controlling interests	—		—		—		—		—		—		—		(8)		(8)


Other comprehensive income (loss)	—		—		—		—		—		(76)		(76)		—		(76)
Dividends	—		—		—		—		(763)		—		(763)		—		(763)
Purchases of treasury stock	—		—		—		(4,909)		—		—		(4,909)		—		(4,909)
Share-based payments	—		—		227		25		—		—		252		—		252
Balance at end of period	$	—	$	—	$	7,070	$	(92,226)	$	91,771	$	(1,004)	$	5,611	$	(5)	$	5,606








Six Months Ended June 30, 2026
Balance at beginning of period	$	—	$	—	$	6,907	$	(83,224)	$	85,035	$	(981)	$	7,737	$	9	$	7,746
Net income	—		—		—		—		8,270		—		8,270		—		8,270
Activity related to non-controlling interests	—		—		—		—		—		—		—		(14)		(14)

Other comprehensive income (loss)	—		—		—		—		—		(23)		(23)		—		(23)
Dividends	—		—		—		—		(1,534)		—		(1,534)		—		(1,534)
Purchases of treasury stock	—		—		—		(9,034)		—		—		(9,034)		—		(9,034)
Share-based payments	—		—		163		32		—		—		195		—		195
Balance at end of period	$	—	$	—	$	7,070	$	(92,226)	$	91,771	$	(1,004)	$	5,611	$	(5)	$	5,606

MASTERCARD JUNE 30, 2026 FORM 10-Q 9

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



Consolidated Statements 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, 2025
Balance at beginning of period	$	—	$	—	$	6,326	$	(73,995)	$	75,495	$	(1,155)	$	6,671	$	25	$	6,696
Net income	—		—		—		—		3,701		—		3,701		—		3,701
Activity related to non-controlling interests	—		—		—		—		—		—		—		(4)		(4)


Other comprehensive income (loss)	—		—		—		—		—		236		236		—		236
Dividends	—		—		—		—		(687)		—		(687)		—		(687)
Purchases of treasury stock	—		—		—		(2,321)		—		—		(2,321)		—		(2,321)
Share-based payments	—		—		236		17		—		—		253		—		253
Balance at end of period	$	—	$	—	$	6,562	$	(76,299)	$	78,509	$	(919)	$	7,853	$	21	$	7,874








Six Months Ended June 30, 2025
Balance at beginning of period	$	—	$	—	$	6,442	$	(71,431)	$	72,907	$	(1,433)	$	6,485	$	30	$	6,515
Net income	—		—		—		—		6,981		—		6,981		—		6,981
Activity related to non-controlling interests	—		—		—		—		—		—		—		(9)		(9)


Other comprehensive income (loss)	—		—		—		—		—		514		514		—		514
Dividends	—		—		—		—		(1,379)		—		(1,379)		—		(1,379)
Purchases of treasury stock	—		—		—		(4,894)		—		—		(4,894)		—		(4,894)
Share-based payments	—		—		120		26		—		—		146		—		146
Balance at end of period	$	—	$	—	$	6,562	$	(76,299)	$	78,509	$	(919)	$	7,853	$	21	$	7,874

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

10 MASTERCARD JUNE 30, 2026 FORM 10-Q

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Consolidated Statements of Cash Flows (Unaudited)
	Six Months Ended June 30,
	2026		2025
	(in millions)
Operating Activities
Net income	$	8,270	$	6,981
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of customer incentives	1,310		993
Depreciation and amortization	608		556
(Gains) losses on equity investments, net	68		25
Share-based compensation	326		308
Deferred income taxes	110		81
Other	84		60
Changes in operating assets and liabilities:
Accounts receivable	(448)		(217)

Settlement assets	(745)		(590)
Prepaid expenses	(3,835)		(2,238)
Accrued litigation and legal settlements	(504)		81
Restricted security deposits held for customers	90		125
Accounts payable	124		(168)
Settlement obligations	750		356
Accrued expenses	788		(203)

Net change in other assets and liabilities	(224)		833
Net cash provided by operating activities	6,772		6,983
Investing Activities
Purchases of investment securities available-for-sale	(134)		(247)
Purchases of investments held-to-maturity	—		(22)
Proceeds from sales of investment securities available-for-sale	32		126
Proceeds from maturities of investment securities available-for-sale	89		125
Proceeds from maturities of investments held-to-maturity	13		27
Purchases of property and equipment	(445)		(199)
Capitalized software	(368)		(367)




Other investing activities	(66)		(10)
Net cash used in investing activities	(879)		(567)
Financing Activities
Purchases of treasury stock	(8,933)		(4,838)
Dividends paid	(1,548)		(1,385)
Proceeds from debt, net of discounts	5,596		1,242
Payment of debt	—		(750)
Proceeds from (payment of) debt, maturities of 90 days or less, net	84		—



Tax withholdings related to share-based payments	(204)		(279)
Cash proceeds from employee stock plans	73		117
Other financing activities	(108)		(100)
Net cash used in financing activities	(5,040)		(5,993)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(126)		341
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	727		764
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period	13,248		10,808
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period	$	13,975	$	11,572

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

MASTERCARD JUNE 30, 2026 FORM 10-Q 11

PART I

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

Notes to consolidated financial statements (unaudited)

Note 1. Summary of Significant Accounting Policies

Organization

Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“Mastercard International” and together with Mastercard Incorporated, “Mastercard” or the “Company”), is a technology company in the global payments industry. Mastercard connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide by enabling electronic payments and making those payment transactions secure, simple, smart and accessible.

Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Mastercard and its majority-owned and controlled entities, including any variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Investments in VIEs for which the Company is not considered the primary beneficiary are not consolidated and are accounted for as marketable, equity method or measurement alternative method investments and recorded in other assets on the consolidated balance sheets. At June 30, 2026 and December 31, 2025, there were no significant VIEs that required consolidation and the investments were not material to the consolidated financial statements. The Company consolidates acquisitions as of the date the Company has obtained a controlling financial interest. Intercompany transactions and balances have been eliminated in consolidation. The Company follows accounting principles generally accepted in the United States of America (“GAAP”).

The balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of December 31, 2025. The consolidated financial statements for the three and six months ended June 30, 2026 and 2025 and as of June 30, 2026 are unaudited, and in the opinion of management, include all normal recurring adjustments that are necessary to present fairly the results for interim periods. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (SEC) requirements for Quarterly Reports on Form 10-Q. Reference should be made to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”) for additional disclosures, including a summary of the Company’s significant accounting policies.

Note 2. Acquisitions

In March 2026, Mastercard entered into a definitive agreement to acquire a 100% equity interest in BVNK Holdings Limited (“BVNK”), a provider of stablecoin infrastructure, for $1.5 billion, excluding customary closing adjustments. The sellers of BVNK have the potential to earn additional contingent consideration of up to $300 million if certain performance targets are met. The transaction is subject to regulatory approval and other customary closing conditions. The Company anticipates completing the acquisition before the end of the third quarter of 2026. Upon completion, this acquisition is expected to expand Mastercard’s capabilities to support the digital assets ecosystem.

Note 3. Revenue

The Company’s disaggregated net revenue by category and geographic region were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Net revenue by category:
Payment network	$	5,451	$	4,945	$	10,399	$	9,377
Value-added services and solutions	3,826		3,188		7,276		6,006
Net revenue	$	9,277	$	8,133	$	17,675	$	15,383
Net revenue by geographic region:
Americas 1	$	3,999	$	3,406	$	7,563	$	6,557
Asia Pacific, Europe, Middle East and Africa	5,278		4,727		10,112		8,826
Net revenue	$	9,277	$	8,133	$	17,675	$	15,383

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

12 MASTERCARD JUNE 30, 2026 FORM 10-Q

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

The Company’s customers are generally billed weekly, with certain billings occurring on a monthly and quarterly basis. The frequency of billing is dependent upon the nature of the performance obligation and the underlying contractual terms. The Company does not typically offer extended payment terms to customers. The following table sets forth the location of the amounts recognized on the consolidated balance sheets from contracts with customers:


	June 30, 2026		December 31, 2025
	(in millions)
Receivables from contracts with customers
Accounts receivable	$	4,196	$	4,010
Contract assets
Prepaid expenses and other current assets	138		189
Other assets	481		508
Deferred revenue 1
Other current liabilities	1,438		1,137
Other liabilities	447		424

1 Revenue recognized from performance obligations satisfied for the three and six months ended June 30, 2026 was $966 million and $1,718 million, respectively.

Note 4. Earnings Per Share

The components of basic and diluted earnings per share (“EPS”) for common shares were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions, except per share data)
Numerator
Net income	$	4,388	$	3,701	$	8,270	$	6,981
Denominator
Basic weighted-average shares outstanding	882		908		887		910
Dilutive stock options and stock units	1		1		1		1
Diluted weighted-average shares outstanding 1	883		909		888		911
Earnings per Share
Basic	$	4.98	$	4.08	$	9.33	$	7.67
Diluted	$	4.97	$	4.07	$	9.32	$	7.66

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.

MASTERCARD JUNE 30, 2026 FORM 10-Q 13

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

Note 5. Investments

The Company’s investments on the consolidated balance sheets include both available-for-sale and held-to-maturity debt securities (see Investments section below). The Company’s strategic investments in equity securities of publicly traded and privately held companies are classified within other assets on the consolidated balance sheets (see Equity Investments section below).

Investments

Investments on the consolidated balance sheets consisted of the following:


	June 30, 2026		December 31, 2025
	(in millions)
Available-for-sale securities	$	318	$	319
Held-to-maturity securities 1	—		13
Total investments	$	318	$	332

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, 2026 and 2025 were not material.

Available-for-Sale Securities

The Company’s available-for-sale securities consist of corporate securities, government and agency securities and asset-backed securities. 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, 2026 and December 31, 2025 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 as of June 30, 2026 and December 31, 2025 were not material and are recorded in other comprehensive income (loss).

The maturity distribution based on the contractual terms of the Company’s available-for-sale investment securities at June 30, 2026 was as follows:



	Amortized Cost		Fair Value
	(in millions)
Due within 1 year	$	114	$	114
Due after 1 year through 5 years	204		204

Total	$	318	$	318

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

The following table is a summary of the activity related to the Company’s equity investments:


	Balance at December 31, 2025		Purchases		Sales		Changes in Fair Value 1		Other 2		Balance at June 30, 2026
	(in millions)
Marketable securities	$	203	$	—	$	(9)	$	(50)	$	(1)	$	143
Nonmarketable securities	1,502		61		(9)		(18)		(12)		1,524
Total equity investments	$	1,705	$	61	$	(18)	$	(68)	$	(13)	$	1,667

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

2Primarily translational impact of currency.

The following table sets forth the components of the Company’s Nonmarketable securities:


	June 30, 2026		December 31, 2025
	(in millions)
Measurement alternative	$	1,242	$	1,242
Equity method	282		260
Total Nonmarketable securities	$	1,524	$	1,502

The following table summarizes the total carrying value of the Company’s Measurement alternative investments, including cumulative unrealized gains and losses through June 30, 2026:



	(in millions)
Initial cost basis	$	971
Cumulative adjustments 1:
Upward adjustments	517
Downward adjustments (including impairment)	(246)
Carrying amount, end of period	$	1,242

1 Includes immaterial translational impact of currency.

The following table summarizes the unrealized gains and losses included in the carrying value of the Company’s Measurement alternative investments and Marketable securities:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Measurement alternative investments:
Upward adjustments	$	1	$	4	$	1	$	6
Downward adjustments (including impairment)	(2)		(27)		(23)		(30)
Marketable securities:
Unrealized gains (losses), net	(5)		29		(50)		(3)

Note 6. Fair Value Measurements

The Company’s financial instruments are carried at fair value, cost or amortized cost on the consolidated balance sheets. The Company classifies its fair value measurements of financial instruments into a three-level hierarchy (the “Valuation Hierarchy”).

Financial Instruments - Carried at Fair Value

Financial instruments carried at fair value are categorized for fair value measurement purposes as recurring or nonrecurring in nature.

MASTERCARD JUNE 30, 2026 FORM 10-Q 15

PART I

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

Recurring Measurements

The distribution of the Company’s financial instruments measured at fair value on a recurring basis within the Valuation Hierarchy was as follows:


	June 30, 2026								December 31, 2025
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in millions)
Assets
Investment securities:



Available-for-sale securities 1	$	21	$	297	$	—	$	318	$	20	$	299	$	—	$	319
Derivative instruments 2:
Foreign exchange contracts	—		43		—		43		—		35		—		35

Marketable securities 3:
Equity securities	143		—		—		143		203		—		—		203



Liabilities
Derivative instruments 2:
Foreign exchange contracts	$	—	$	74	$	—	$	74	$	—	$	160	$	—	$	160
Interest rate contracts	—		21		—		21		—		27		—		27

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.

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.

Financial Instruments - Not Carried at Fair Value

Debt

Debt instruments are carried on the consolidated balance sheets at amortized cost. The Company estimates the fair value of its debt based on either market quotes or observable market data. Debt is classified as Level 2 of the Valuation Hierarchy as it is generally not traded in active markets. At June 30, 2026, the carrying value and fair value of debt was $24.6 billion and $23.3 billion, respectively. At December 31, 2025, the carrying value and fair value of debt was $19.0 billion and $18.0 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.

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

Note 7. Prepaid Expenses and Other Assets

Prepaid expenses and other current assets consisted of the following:


	June 30, 2026		December 31, 2025
	(in millions)
Customer incentives	$	3,156	$	2,531

Other	1,655		1,212
Total prepaid expenses and other current assets	$	4,811	$	3,743

Other assets consisted of the following:


	June 30, 2026		December 31, 2025
	(in millions)
Customer incentives	$	8,440	$	7,870
Equity investments	1,667		1,705
Income taxes receivable	1,128		1,101
Other	988		939
Total other assets	$	12,223	$	11,615

Note 8. Accrued Expenses

Accrued expenses consisted of the following:


	June 30, 2026		December 31, 2025
	(in millions)
Customer incentives	$	9,868	$	9,958
Personnel costs	1,087		1,716
Income and other taxes	1,375		914
Other	697		684
Total accrued expenses	$	13,027	$	13,272

As of June 30, 2026 and December 31, 2025, long-term customer incentives included in other liabilities were $2,664 million and $3,041 million, respectively.

MASTERCARD JUNE 30, 2026 FORM 10-Q 17

PART I

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

Note 9. Debt

Debt consisted of the following:


				June 30, 2026		December 31, 2025		Effective Interest Rate
				(in millions)
Senior Notes

2026 USD Notes	Floating Rate		Senior Notes due June 2028	$	500	$	—	**
	4.325	%	Senior Notes due June 2028	1,250		—		4.499	%
	4.425	%	Senior Notes due June 2029	1,150		—		4.561	%
	4.600	%	Senior Notes due June 2031	1,350		—		4.704	%
	5.000	%	Senior Notes due June 2036	750		—		5.063	%

2025 USD Notes	Floating Rate		Senior Notes due March 2028	300		300		**
	4.550	%	Senior Notes due March 2028	450		450		4.727	%
	4.950	%	Senior Notes due March 2032	500		500		5.063	%

2024 USD Notes	4.100	%	Senior Notes due January 2028	750		750		4.262	%
	4.350	%	Senior Notes due January 2032	1,150		1,150		4.446	%
	4.550	%	Senior Notes due January 2035	1,100		1,100		4.633	%
	4.875	%	Senior Notes due May 2034	1,000		1,000		5.047	%

2023 USD Notes	4.875	%	Senior Notes due March 2028	750		750		5.003	%
	4.850	%	Senior Notes due March 2033	750		750		4.923	%

2022 EUR Notes	1.000	%	Senior Notes due February 2029	855		882		1.138	%

2021 USD Notes	2.000	%	Senior Notes due November 2031	750		750		2.112	%
	1.900	%	Senior Notes due March 2031	600		600		1.981	%
	2.950	%	Senior Notes due March 2051	700		700		3.013	%

2020 USD Notes	3.300	%	Senior Notes due March 2027	1,000		1,000		3.420	%
	3.350	%	Senior Notes due March 2030	1,500		1,500		3.430	%
	3.850	%	Senior Notes due March 2050	1,500		1,500		3.896	%

2019 USD Notes	2.950	%	Senior Notes due June 2029	1,000		1,000		3.030	%
	3.650	%	Senior Notes due June 2049	1,000		1,000		3.689	%


2018 USD Notes	3.500	%	Senior Notes due February 2028	500		500		3.598	%
	3.950	%	Senior Notes due February 2048	500		500		3.990	%

2016 USD Notes	2.950	%	Senior Notes due November 2026	750		750		3.044	%
	3.800	%	Senior Notes due November 2046	600		600		3.893	%

2015 EUR Notes	2.100	%	Senior Notes due December 2027	912		941		2.189	%
	2.500	%	Senior Notes due December 2030	171		176		2.562	%


Commercial Paper			Commercial paper borrowings	710		—

				24,798		19,149
Less: Unamortized discount and debt issuance costs				(134)		(122)
Less: Cumulative hedge accounting fair value adjustments 1				(21)		(27)
Total debt outstanding				24,643		19,000
Less: Short-term debt 2				(2,459)		(749)
Long-term debt				$	22,184	$	18,251

**The $500 million of Senior Notes due June 2028 and the $300 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 0.39% and 0.44%, respectively.

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.

2As of June 30, 2026, the commercial paper borrowings, the 2016 USD Notes due November 2026 and the 2020 USD Notes due March 2027 were classified as short-term debt, net of unamortized discount and debt issuance costs, on the consolidated balance sheets. As of December 31, 2025, the 2016 USD Notes due November 2026 were classified as short-term debt, net of unamortized discount and debt issuance costs, on the consolidated balance sheets.

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Senior Notes

In June 2026, the Company issued $5.000 billion principal amount of notes, as described in more detail in the preceding table (the “2026 USD Notes”). The net proceeds from the issuance of the 2026 USD Notes (after deducting the original issue discount, underwriting discount and offering expenses) were $4.978 billion.

The 2026 USD Notes are not subject to any financial covenants, are senior unsecured obligations and rank equally with any future unsecured and unsubordinated indebtedness. At the Company’s option, the notes may be redeemed in whole, or in part, at any time for a specified make-whole amount, with the exception of the Floating Rate Notes.

Commercial Paper Program and Credit Facility

The Company has a commercial paper program (the “Commercial Paper Program”) under which the Company is authorized to issue up to $8 billion in unsecured commercial paper notes with maturities of up to 397 days from the date of issuance. The Commercial Paper Program is available in U.S. dollars.

In conjunction with the Commercial Paper Program, the Company has a committed five-year unsecured $8 billion revolving credit facility (the “Credit Facility”). The Credit Facility is set to expire on November 7, 2030. Borrowings under the Credit Facility are available in U.S. dollars and/or euros. The facility fee under the Credit Facility is determined according to the Company’s credit rating and is payable on the average daily commitment, regardless of usage, per annum. In addition to the facility fee, interest rates on borrowings under the Credit Facility would be based on prevailing market interest rates plus applicable margins that fluctuate based on the Company’s credit rating. The Credit Facility contains customary representations, warranties, affirmative and negative covenants, events of default and indemnification provisions. The Company was in compliance, in all material respects, with the covenants of the Credit Facility at June 30, 2026 and December 31, 2025.

Borrowings under the Commercial Paper Program and the Credit Facility, which may total up to $8 billion, are to be used to provide liquidity for general corporate purposes, including providing liquidity in the event of one or more settlement failures by the Company’s customers. The Company may borrow and repay amounts under the Commercial Paper Program and Credit Facility for business continuity purposes.

At June 30, 2026, the Company had $710 million of commercial paper outstanding, with a weighted-average interest rate of 3.84%. At June 30, 2026, the Company had no borrowings under the Credit Facility. At December 31, 2025, the Company had no borrowings under the Commercial Paper Program or Credit Facility. The Commercial Paper Program is supported by the Credit Facility.

Note 10. Stockholders' Equity

Dividends

The Company declared quarterly cash dividends on its Class A and Class B common stock as summarized below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions, except per share data)
Dividends declared per share	$	0.87	$	0.76	$	1.74	$	1.52
Total dividends declared	$	763	$	687	$	1,534	$	1,379

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

Common Stock Activity

The following table presents the changes in the Company’s outstanding Class A and Class B common stock:


	Three Months Ended June 30,
	2026		2025
	Class A	Class B	Class A	Class B
	(in millions)
Balance at beginning of period	880.3	6.6	903.0	6.8
Purchases of treasury stock	(9.8)	—	(4.2)	—
Share-based payments	0.1	—	0.2	—
Conversion of Class B to Class A common stock	0.1	(0.1)	0.1	(0.1)
Balance at end of period	870.7	6.5	899.1	6.7


	Six Months Ended June 30,
	2026		2025
	Class A	Class B	Class A	Class B
	(in millions)
Balance at beginning of period	887.3	6.6	906.6	6.8
Purchases of treasury stock	(17.6)	—	(8.9)	—
Share-based payments	0.9	—	1.3	—
Conversion of Class B to Class A common stock	0.1	(0.1)	0.1	(0.1)
Balance at end of period	870.7	6.5	899.1	6.7

In December 2025 and 2024, the Company’s Board of Directors approved programs authorizing the Company to repurchase shares of its Class A common stock up to $14.0 billion and $12.0 billion, respectively. The following table summarizes the Company’s share repurchases of its Class A common stock:


	Six Months Ended June 30,
	2026		2025
	(in millions, except per share data)
Dollar-value of shares repurchased	$	8,933	$	4,838
Shares repurchased	17.6		8.9
Average price paid per share	$	508.11	$	542.27

As of June 30, 2026, the remaining authorization under share repurchase programs approved by the Company’s Board of Directors was $8.5 billion. Through July 27, 2026, the Company repurchased $0.7 billion dollar-value of shares. As of July 27, 2026, the remaining authorization under share repurchase programs approved by the Company’s Board of Directors was $7.8 billion.

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

Note 11. Accumulated Other Comprehensive Income (Loss)

The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2026 and 2025 were as follows:


	December 31, 2025		Increase / (Decrease)		Reclassifications		June 30, 2026
	(in millions)
Foreign currency translation adjustments 1	$	(1,034)	$	(62)	$	—	$	(1,096)
Translation adjustments on net investment hedges 2	126		50		—		176
Cash flow hedges
Foreign exchange contracts 3	46		101		(115)		32
Interest rate contracts	(107)		—		3		(104)
Defined benefit pension and other postretirement plans	(12)		—		—		(12)

Accumulated other comprehensive income (loss)	$	(981)	$	89	$	(112)	$	(1,004)


	December 31, 2024		Increase / (Decrease)		Reclassifications		June 30, 2025
	(in millions)
Foreign currency translation adjustments 1	$	(1,558)	$	631	$	—	$	(927)
Translation adjustments on net investment hedges 2	295		(162)		—		133
Cash flow hedges
Foreign exchange contracts 3	(51)		(326)		367		(10)
Interest rate contracts	(113)		—		3		(110)
Defined benefit pension and other postretirement plans	(6)		—		—		(6)
Investment securities available-for-sale	—		1		—		1
Accumulated other comprehensive income (loss)	$	(1,433)	$	144	$	370	$	(919)

1For the six months ended June 30, 2026, the increase in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the depreciation of the British pound and euro, partially offset by the appreciation of the Brazilian Real against the U.S. dollar. For 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.

2For the six months ended June 30, 2026, the increase in the accumulated other comprehensive income related to the net investment hedges was driven primarily by the depreciation of the euro against the U.S. dollar. For 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. 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.

Note 12. Share-Based Payments

For the six months ended June 30, 2026, the Company granted the following awards under the Mastercard Incorporated 2006 Long Term Incentive Plan, amended and restated as of June 22, 2021 (the “LTIP”). The LTIP is a stockholder-approved plan that permits the grant of various types of equity awards to employees.


	Grants in 2026	Weighted-Average Grant-Date Fair Value
	(in millions)	(per option/unit)
Non-qualified stock options	0.2	$	165
Restricted stock units	1.1	$	511
Performance stock units	0.2	$	503

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 2026 was estimated to be six years, while the expected volatility was determined to be 27.5%. These awards expire ten years from the date of grant and vest ratably over three years.

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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 three years.

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 three years from the date of grant and are subject to a mandatory one-year 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. Income Taxes

The effective income tax rates for the three months ended June 30, 2026 and 2025 were 20.0% and 20.8%, respectively. The effective income tax rates for the six months ended June 30, 2026 and 2025 were 19.7% and 19.8%, respectively. The effective income tax rates for the three and six months ended June 30, 2026 were lower compared to the periods in 2025 due to partially offsetting tax impacts in 2026, including discrete tax benefits in the periods.

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. Legal and Regulatory Proceedings

Mastercard is a party to legal and regulatory proceedings with respect to a variety of matters in the ordinary course of business. Some of these proceedings are based on complex claims involving substantial uncertainties and unascertainable damages. Accordingly, it is not possible to determine the probability of loss or estimate damages, and therefore, Mastercard has not established liabilities for any of these proceedings, except as discussed below. When the Company determines that a loss is both probable and reasonably estimable, Mastercard records a liability and discloses the amount of the liability if it is material. When a material loss contingency is only reasonably possible, Mastercard does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Unless otherwise stated below with respect to these matters, Mastercard cannot provide an estimate of the possible loss or range of loss based on one or more of the following reasons: (1) actual or potential plaintiffs have not claimed an amount of monetary damages or the amounts are unsupportable or exaggerated, (2) the matters are in early stages, (3) there is uncertainty as to the outcome of pending appeals or motions, (4) there are significant factual issues to be resolved, (5) the proceedings involve multiple defendants or potential defendants whose share of any potential financial responsibility has yet to be determined and/or (6) there are novel legal issues presented. Furthermore, except as identified with respect to the matters below, Mastercard does not believe that the outcome of any individual existing legal or regulatory proceeding to which it is a party will have a material adverse effect on its results of operations, financial condition and overall business. However, an adverse judgment or other outcome or settlement with respect to any proceedings discussed below could result in fines or payments by Mastercard and/or could require Mastercard to change its business practices. In addition, an adverse outcome in a regulatory proceeding could lead to the filing of civil damage claims and possibly result in significant damage awards. Any of these events could have a material adverse effect on Mastercard’s results of operations, financial condition and overall business.

Interchange Litigation and Regulatory Proceedings

Mastercard’s interchange fees and other practices are subject to regulatory, legal review and/or challenges in a number of jurisdictions, including the proceedings described below. When taken as a whole, the resulting decisions, regulations and legislation with respect to interchange fees and acceptance practices may have a material adverse effect on the Company’s prospects for future growth and its overall results of operations and financial condition.

United States

In 2005, the first of a series of complaints were filed on behalf of merchants (the majority of the complaints were styled as class actions, although a few complaints were filed on behalf of individual merchant plaintiffs) against Mastercard International, Visa U.S.A., Inc., Visa International Service Association and a number of financial institutions. Taken together, the claims in the complaints were generally brought under both Sections 1 and 2 of the Sherman Act, which prohibit monopolization and attempts or conspiracies to monopolize a particular industry, and some of these complaints contain unfair competition law claims under state law. The complaints allege, among other things, that Mastercard, Visa, and certain financial institutions conspired to set the price of interchange fees, enacted point-of-sale acceptance rules (including the “no surcharge” rule) in violation of antitrust laws and engaged in unlawful tying and bundling of certain

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products and services, resulting in merchants paying excessive costs for the acceptance of Mastercard and Visa credit and debit cards. The cases were consolidated for pre-trial proceedings in the U.S. District Court for the Eastern District of New York in MDL No. 1720 (the “U.S. MDL Litigation Cases”). The plaintiffs filed a consolidated class action complaint seeking treble damages.

In 2006, the group of purported merchant class plaintiffs filed a supplemental complaint alleging that Mastercard’s initial public offering of its Class A Common Stock in May 2006 (the “IPO”) and certain purported agreements entered into between Mastercard and financial institutions in connection with the IPO: (1) violate U.S. antitrust laws and (2) constituted a fraudulent conveyance because the financial institutions allegedly attempted to release, without adequate consideration, Mastercard’s right to assess them for Mastercard’s litigation liabilities. The class plaintiffs sought treble damages and injunctive relief including, but not limited to, an order reversing and unwinding the IPO.

In 2011, Mastercard and Mastercard International entered into each of: (1) an omnibus judgment sharing and settlement sharing agreement with Visa Inc., Visa U.S.A. Inc. and Visa International Service Association and a number of financial institutions; and (2) a Mastercard settlement and judgment sharing agreement with a number of financial institutions. The agreements provide for the apportionment of certain costs and liabilities which Mastercard, the Visa parties and the financial institutions may incur, jointly and/or severally, in the event of an adverse judgment or settlement of one or all of the U.S. MDL Litigation Cases. Among a number of scenarios addressed by the agreements, in the event of a global settlement involving the Visa parties, the financial institutions and Mastercard, Mastercard would pay 12% 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 36% 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 (the “Damages Class Settlement Agreement”), with merchants representing slightly more than 25% of the Damages Class interchange volume choosing to opt out of the settlement. The Damages Class Settlement Agreement became final in 2023. In April 2026, a putative class action was filed on behalf of U.S. merchants seeking damages related to interchange fees associated with Mastercard and Visa credit card transactions since January 2019. The named plaintiffs concurrently filed a motion for summary judgment before the court that oversaw the Damages Class litigation seeking a declaration that the release from the Damages Class Settlement Agreement (which by its terms prospectively releases the damages claims of U.S. merchants who did not opt out of the class through August 2028) does not bar their damages claims. Mastercard and Visa have filed a joint opposition to the plaintiffs’ motion and also moved for an injunction to dismiss the case based upon the release in the Damages Class Settlement Agreement. The parties are currently briefing these motions.

Mastercard has reached settlements with the vast majority of the remaining individual opt-out merchants. The opt-out merchant settlements, along with the Damages Class Settlement Agreement, represent over 95% of Mastercard’s U.S. interchange volume. Mastercard continues to litigate with two groups of remaining opt-out merchants. The first group includes two opt-out merchants seeking aggregate single damages in excess of $250 million with respect to their Mastercard purchase volume. A trial involving these merchants is scheduled to commence in September 2026. The second group of opt-out merchants consists of Block and Intuit, who are seeking aggregate single damages in excess of $5 billion with respect to the Mastercard purchase volume in which they acted as a merchant, as well as the purchase volume associated with smaller merchants for whom they acted as payment facilitators. The parties in these matters are scheduled to exchange expert reports and summary judgment briefing over the course of 2026.

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. In 2025, the parties reached a revised settlement agreement that, if approved by the court, would resolve the litigation. The district court granted preliminary approval of the settlement in June 2026. A hearing on final approval is scheduled for November 2026.

As of June 30, 2026 and December 31, 2025, Mastercard accrued a liability of $149 million and $637 million, respectively, for the U.S. MDL Litigation Cases. The decrease in the liability was a result of payments made during 2026. The liability as of June 30, 2026 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.

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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”). Further merchant interchange claims were filed in court in the U.K. during the second quarter of 2026. Mastercard has resolved a substantial amount of these damages claims through settlement or judgment. Following these settlements, over £0.5 billion (approximately $0.7 billion as of June 30, 2026) 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 2025, the trial court in the U.K. merchant action decided against Mastercard on certain liability issues, and in March 2026, Mastercard was granted permission to appeal this decision on all grounds. The appeal hearing is scheduled for February 2027. In February 2026, the trial court decided certain issues related to damages. Some of these issues were decided in favor of Mastercard and Mastercard is seeking permission to appeal the issues that were negative to the Company. The court must also still determine additional liability and damages issues, some of which are scheduled to be tried in October 2027.

Additional United Kingdom matter. 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 £1 billion (approximately $1.3 billion as of June 30, 2026). In June 2024, the court granted the plaintiffs’ collective action application. Mastercard’s request for permission to appeal this ruling was denied. In February 2026, the U.K. trial court decided to exclude over 100 merchants from the class on procedural grounds. Liability and damages issues in this claim are now being tried in the same court proceedings as the U.K. and Pan-European merchant cases.

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 €0.4 billion (approximately $0.5 billion as of June 30, 2026) for interchange fees that were allegedly passed on to consumers by Portuguese merchants for a period of approximately 20 years. Mastercard has submitted a statement of defense that disputes both liability and damages. A trial has been scheduled for October 2026.

Netherlands. In 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 €0.3 billion (approximately $0.3 billion as of June 30, 2026).

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 agreements, Mastercard engaged in conduct with the purpose of substantially lessening competition in the supply of debit card acceptance services. The ACCC seeks both declaratory relief and monetary fines and costs. A hearing on liability issues concluded in June 2026.

ATM Non-Discrimination Rule Surcharge Complaints

In 2011, a trade association of independent ATM operators and 13 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 mirrored the allegations made in the ATM Operators Class Complaint, although these complaints sought damages on behalf of consumers of ATM services who paid 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 sought both injunctive and monetary relief equal to treble the damages they claimed 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 three class complaints.

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In 2024, Mastercard executed a settlement agreement with the class lawyers representing the plaintiffs in the Bank ATM Consumer Class Complaint, that was subsequently approved by the court in 2025. In 2025, Mastercard executed a settlement agreement with the class lawyers representing the plaintiffs in the Non-bank ATM Consumer Class Complaint (subject to court approval) and recorded an accrual of $79 million in connection with this matter.

In June 2026, Mastercard reached an agreement in principle to settle with the only independent ATM operator who opted out of the ATM Operators Class Complaint. The litigation with respect to the ATM Operators Class Complaint is ongoing. The plaintiffs in this class complaint allege over $1 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 alleged 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 sought 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 submitted expert reports that allege aggregate single damages in excess of $1 billion against the four Network Defendants. The Network Defendants submitted expert reports rebutting both liability and damages. In 2024, the district court denied the Network Defendants’ motion for summary judgment. In 2025, Mastercard executed a settlement agreement with the class lawyers to resolve the matter (subject to court approval) and recorded an accrual of $80 million in connection with this matter. In April 2026, the district court granted final approval of the settlement.

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 381,000 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 $500 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 continue to await the court’s decision.

European Commission Investigation

In 2024, Mastercard received a formal request for information from the European Commission seeking documents and information in connection with an investigation into alleged anti-competitive behavior of certain card scheme services in the European Union/European Economic Area. The request focuses on Mastercard’s practices regarding network fees related to acquirers. Mastercard is cooperating with the European Commission in connection with the request.

Note 15. Settlement and Other Risk Management

Mastercard’s rules guarantee the settlement of many of the payment network transactions between its customers (“settlement risk”). Settlement exposure is the settlement risk to customers under Mastercard’s rules due to the difference in timing between the payment transaction date and subsequent settlement. For those transactions the Company guarantees, the guarantee will cover the full amount of the settlement obligation to the extent the settlement obligation is not otherwise satisfied. The duration of the settlement exposure is short-term and generally limited to a few days.

Gross settlement exposure is estimated using the average daily payment volume for the three months prior to period end multiplied by the estimated number of days of exposure. The Company has global risk management policies, procedures and standards that provide a framework for managing the Company’s settlement risk and exposure. In the event of failed settlement by a customer, Mastercard may pursue one or more remedies available under the Company’s rules to recover potential losses. Historically, the Company has experienced a low level of losses from customer settlement failures.

As part of its policies, Mastercard requires certain customers that do not meet the Company’s risk standards to enter into risk mitigation arrangements, including cash collateral and/or forms of credit enhancement such as letters of credit and guarantees. This requirement is based on a review of the individual risk circumstances for each customer. Mastercard monitors its credit risk portfolio and the adequacy of its risk mitigation arrangements on a regular basis. Additionally, the Company periodically reviews its risk management methodology and standards. The amounts of estimated settlement exposure are revised as necessary.

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

The Company’s estimated settlement exposure was as follows:


	June 30, 2026		December 31, 2025
	(in millions)
Gross settlement exposure	$	93,402	$	89,599
Risk mitigation arrangements applied to settlement exposure	(16,703)		(16,722)
Net settlement exposure	$	76,699	$	72,877

Mastercard also provides guarantees to customers and certain other counterparties indemnifying them from losses stemming from failures of third parties to perform duties. This includes guarantees of Mastercard-branded travelers cheques issued, but not yet cashed. In addition, the Company enters into agreements in the ordinary course of business under which the Company agrees to indemnify third parties against damages, losses and expenses incurred in connection with legal and other proceedings arising from relationships or transactions with the Company. Certain indemnifications do not provide a stated maximum exposure. As the extent of the Company’s obligations under these agreements depends entirely upon the occurrence of future events, the Company’s potential future liability under these agreements is not determinable. Historically, payments made by the Company under these types of contractual arrangements have not been material.

Note 16. Derivative and Hedging Instruments

The Company monitors and manages its foreign currency and interest rate exposures as part of its overall risk management program, which focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. A primary objective of the Company’s risk management strategies is to reduce the financial impact that may arise from volatility in foreign currency exchange rates. The Company uses both foreign exchange derivative contracts (when the hedge costs are economically justified) and foreign currency denominated debt to manage its currency exposure. 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. The Company does not enter into derivatives for speculative purposes.

The Company’s derivative financial instruments are subject to both market and counterparty credit risk. Market risk is the potential for economic losses to be incurred on market risk sensitive instruments arising from adverse changes in market factors such as foreign currency exchange rates, interest rates and other related variables. Counterparty credit risk is the risk of loss due to failure of the counterparty to perform its obligations in accordance with contractual terms. To mitigate counterparty credit risk, the Company enters into derivative contracts with a diversified group of selected financial institutions based upon their credit ratings and other factors. Generally, the Company does not obtain collateral related to derivatives because of the high credit ratings of the counterparties. The Company’s derivative contracts are subject to enforceable master netting arrangements, which contain various netting and setoff provisions. However, the Company has elected to present derivative assets and liabilities on a gross basis on the consolidated balance sheets.

The following table summarizes the fair value of the Company’s derivative financial instruments and the related notional amounts:


	June 30, 2026						December 31, 2025
	Notional		Derivative assets		Derivative liabilities		Notional		Derivative assets		Derivative liabilities
	(in millions)
Derivatives designated as hedging instruments
Foreign exchange contracts in a cash flow hedge 1	$	4,632	$	36	$	34	$	5,050	$	16	$	142
Interest rate contracts in a fair value hedge 2	1,000		—		21		1,000		—		27

Derivatives not designated as hedging instruments
Foreign exchange contracts 1	4,484		7		40		4,866		19		18
Total	$	10,116	$	43	$	95	$	10,916	$	35	$	187

1Foreign exchange derivative assets and liabilities are included within prepaid expenses and other current assets, other 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.

Cash Flow Hedges

The Company may enter into foreign exchange derivative contracts, including forwards and options, to manage the impact of foreign currency variability on anticipated revenues and expenses, which fluctuate based on currencies other than the functional currency of the entity. The objective of these hedging activities is to reduce the effect of movement in foreign exchange rates for a portion of revenues and expenses forecasted to occur. As these contracts are designated as cash flow hedging instruments, 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

26 MASTERCARD JUNE 30, 2026 FORM 10-Q

PART I

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

consolidated statements of operations when the underlying hedged transactions impact earnings. The terms of these contracts are generally less than 18 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 7 years.

The pre-tax gain (loss) related to the Company’s foreign exchange derivative contracts designated as cash flow hedging instruments were as follows:


	Gain (Loss) Recognized in Other Comprehensive Income (Loss)						Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	Three Months Ended June 30,				Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Earnings		Three Months Ended June 30,
	2026		2025			2026			2025
	(in millions)					(in millions)

Foreign exchange contracts 1	$	(12)	$	(300)	Net revenue		$	—		$	(20)
					General and administrative 2		$	38		$	(254)


	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,
	2026		2025			2026			2025
	(in millions)					(in millions)

Foreign exchange contracts 1	$	106	$	(348)	Net revenue		$	(21)		$	(15)
					General and administrative 2		$	132		$	(356)

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.

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. For the three and six months ended June 30, 2026 and 2025, the amounts reclassified from accumulated other comprehensive income (loss) to interest expense were not material.

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, 2026 that will be reclassified into the consolidated statements of operations within the next 12 months is not material.

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 fixed interest rate Senior Notes. 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, 2026 and 2025 were not material.

MASTERCARD JUNE 30, 2026 FORM 10-Q 27

PART I

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

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. The amounts recognized in earnings related to forward points for the three and six months ended June 30, 2026 and the six months ended June 30, 2025 were not material. No amounts were recognized in earnings related to forward points for the three months ended June 30, 2025.

The pre-tax gain (loss) recognized in other comprehensive income (loss) related to the Company's foreign exchange derivative contracts designated as net investment hedging instruments were as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)







Foreign exchange contracts	$	3	$	—	$	3	$	12

As of June 30, 2026 and December 31, 2025, the Company had €1.7 billion euro-denominated debt outstanding designated as hedges of a portion of its net investment in its European operations. For the three months ended June 30, 2026 and 2025, the Company recorded pre-tax net foreign currency gains (losses) of $14 million and $(155) million in other comprehensive income (loss). For the six months ended June 30, 2026 and 2025, the Company recorded pre-tax net foreign currency gains (losses) of $61 million and $(220) million in other comprehensive income (loss).

As of June 30, 2026 and December 31, 2025, the Company had net foreign currency gains of $176 million and $126 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 for the respective currency position. The objective of these activities is to reduce the Company’s exposure to volatility arising from gains and losses resulting from fluctuations of foreign currencies against its functional currencies. Gains and losses resulting from changes in fair value of these contracts are recorded net in general and administrative expenses on the consolidated statements of operations, along with the foreign currency gains and losses on monetary assets and liabilities.

The amount of gain (loss) recognized on the consolidated statements of operations for non-designated derivative contracts were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)

Foreign exchange contracts
General and administrative	$	(31)	$	60	$	(51)	$	80

28 MASTERCARD JUNE 30, 2026 FORM 10-Q

PART I

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

Note 17. Segment Reporting

Mastercard has concluded it has one reportable operating segment, “Payment Solutions.” The following represents the selected financial information of the Payment Solutions segment:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Net revenue	$	9,277	$	8,133	$	17,675	$	15,383
Less:
Personnel	1,947		1,852		3,984		3,540
Professional fees	128		107		252		220
Data processing and telecommunications	369		314		718		606
Foreign exchange activity	59		41		117		42
Advertising and marketing	217		213		370		365
Depreciation and amortization	309		281		608		556
Provision for litigation	82		96		82		247
Investment income	(88)		(70)		(169)		(158)
(Gains) losses on equity investments, net	2		(4)		68		25
Interest expense	218		195		403		377
Other (income) expense, net	(31)		(16)		(106)		(21)
Income tax expense	1,098		971		2,028		1,722
Other segment items 1	579		452		1,050		881
Consolidated net income	$	4,388	$	3,701	$	8,270	$	6,981

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

MASTERCARD JUNE 30, 2026 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, 2025 as contained in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 11, 2026 (“2025 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.

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)
	2026			2025				2026				2025
	(in millions, except percentages and per share data)
Net revenue	$	9,277		$	8,133		14%		$	17,675			$	15,383		15%
Operating expenses	$	3,690		$	3,356		10%		$	7,181			$	6,457		11%
Operating income	$	5,587		$	4,777		17%		$	10,494			$	8,926		18%
Operating margin	60.2		%	58.7		%	1.5 ppt		59.4		%		58.0		%	1.3 ppt
Income tax expense	$	1,098		$	971		13%		$	2,028			$	1,722		18%
Effective income tax rate	20.0		%	20.8		%	(0.8) ppt		19.7		%		19.8		%	(0.1) ppt
Net income	$	4,388		$	3,701		19%		$	8,270			$	6,981		18%
Diluted earnings per share	$	4.97		$	4.07		22%		$	9.32			$	7.66		22%
Diluted weighted-average shares outstanding	883			909			(3)%		888				911			(3)%

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)
	2026			2025			As adjusted	Currency-neutral	2026			2025			As adjusted	Currency-neutral
	(in millions, except percentages and per share data)
Net revenue	$	9,277		$	8,133		14%	12%	$	17,675		$	15,383		15%	12%
Adjusted operating expenses	$	3,608		$	3,260		11%	10%	$	6,897		$	6,210		11%	9%
Adjusted operating margin	61.1		%	59.9		%	1.2 ppt	0.8 ppt	61.0		%	59.6		%	1.3 ppt	0.9 ppt
Adjusted effective income tax rate	20.0		%	20.9		%	(0.8) ppt	(0.9) ppt	19.7		%	20.1		%	(0.4) ppt	(0.4) ppt
Adjusted net income	$	4,453		$	3,769		18%	16%	$	8,556		$	7,175		19%	15%
Adjusted diluted earnings per share	$	5.04		$	4.15		21%	19%	$	9.64		$	7.87		22%	18%

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, 2026 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, 2026, versus the comparable periods in 2025:


Net revenue
Three Months Ended June 30, 2026
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 14%	up 12%

Six Months Ended June 30, 2026
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 15%	up 12%


Operating expenses	Adjusted operating expenses
Three Months Ended June 30, 2026
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 10%	up 10%

Six Months Ended June 30, 2026
GAAP	Non-GAAP (currency-neutral)	The as-reported operating expenses increase was primarily due to higher general and administrative expenses (which included a restructuring charge in the first quarter of 2026), partially offset by lower litigation provisions. The as-adjusted operating expense increase was primarily due to higher general and administrative expenses.
up 11%	up 9%


Effective income tax rate	Adjusted effective income tax rate
Three Months Ended June 30, 2026		Both the as-reported and as-adjusted income tax rates were lower versus the comparable period in 2025 due to partially offsetting tax impacts in 2026, including discrete tax benefits in the periods.
GAAP	Non-GAAP
20.0%	20.0%
down 0.8 ppt	down 0.8 ppt

Six Months Ended June 30, 2026		Both the as-reported and as-adjusted income tax rates were lower versus the comparable period in 2025 due to partially offsetting tax impacts in 2026, including discrete tax benefits in the periods.
GAAP	Non-GAAP
19.7%	19.7%
down 0.1 ppt	down 0.4 ppt

Other financial highlights for the six months ended June 30, 2026 were as follows:

We generated net cash flows from operations of $6.8 billion.
We repurchased 17.6 million shares of our common stock for $8.9 billion and paid dividends of $1.5 billion.
We completed a debt offering in June 2026 for an aggregate principal amount of $5.0 billion.
We issued commercial paper and at June 30, 2026 had $0.7 billion outstanding.

MASTERCARD JUNE 30, 2026 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, 2026, we recorded net losses of $2 million ($5 million after tax, or $0.01 per diluted share) and $68 million ($69 million after tax, or $0.08 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, 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.

Special Items

Litigation provisions

In the three and six months ended June 30, 2026, we recorded charges of $82 million ($59 million after tax, or $0.07 per diluted share), which includes a legal provision associated with the ATM non-discrimination rule surcharge complaints, a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation and provisions associated with various other legal matters.
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.

Restructuring charge

In the six months ended June 30, 2026, we recorded a restructuring charge of $202 million ($158 million after tax, or $0.18 per diluted share). The savings from the restructuring action are primarily intended to enable reinvestment to support the realization of our long-term growth opportunities.

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.

32 MASTERCARD JUNE 30, 2026 FORM 10-Q

PART I

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

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.

Non-GAAP Reconciliations

The following tables reconcile our reported financial measures calculated in accordance with GAAP to the respective adjusted non-GAAP financial measures:



	Three Months Ended June 30, 2026
	Operating expenses		Operating margin		Other income (expense)		Effective income tax rate		Net income		Diluted earnings per share
	($ in millions, except per share data)
Reported - GAAP	$	3,690	60.2	%	$	(101)	20.0	%	$	4,388	$	4.97
(Gains) losses on equity investments	**		**		2		(0.1)	%	5		0.01
Litigation provisions	(82)		0.9	%	**		0.1	%	59		0.07

Adjusted - Non-GAAP	$	3,608	61.1	%	$	(100)	20.0	%	$	4,453	$	5.04


	Six Months Ended June 30, 2026
	Operating expenses		Operating margin		Other income (expense)		Effective income tax rate		Net income		Diluted earnings per share
	($ in millions, except per share data)
Reported - GAAP	$	7,181	59.4	%	$	(196)	19.7	%	$	8,270	$	9.32
(Gains) losses on equity investments	**		**		68		(0.1)	%	69		0.08
Litigation provisions	(82)		0.5	%	**		0.1	%	59		0.07
Restructuring charge	(202)		1.1	%	**		—	%	158		0.18
Adjusted - Non-GAAP	$	6,897	61.0	%	$	(128)	19.7	%	$	8,556	$	9.64



	Three Months Ended June 30, 2025
	Operating expenses		Operating margin		Other income (expense)		Effective income tax rate		Net income		Diluted earnings per share
	($ in millions, except per share data)
Reported - GAAP	$	3,356	58.7	%	$	(105)	20.8	%	$	3,701	$	4.07
(Gains) losses on equity investments	**		**		(4)		0.1	%	(5)		(0.01)
Litigation provisions	(96)		1.2	%	**		0.1	%	73		0.08

Adjusted - Non-GAAP	$	3,260	59.9	%	$	(109)	20.9	%	$	3,769	$	4.15


	Six Months Ended June 30, 2025
		Operating expenses		Operating margin		Other income (expense)		Effective income tax rate		Net income		Diluted earnings per share
		($ in millions, except per share data)
Reported - GAAP		$	6,457	58.0	%	$	(223)	19.8	%	$	6,981	$	7.66
(Gains) losses on equity investments		**		**		25		—	%	19		0.02
Litigation provisions		(247)		1.6	%	**		0.3	%	174		0.19

Adjusted - Non-GAAP		$	6,210	59.6	%	$	(198)	20.1	%	$	7,175	$	7.87

Note: Tables may not sum due to rounding.

** Not applicable.

MASTERCARD JUNE 30, 2026 FORM 10-Q 33

PART I

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

The following tables represent the reconciliation of our growth rates reported under GAAP to our non-GAAP growth rates:


	Three Months Ended June 30, 2026 as compared to the Three Months Ended June 30, 2025
	Increase/(Decrease)
	Operating expenses	Operating margin	Effective income tax rate	Net income	Diluted earnings per share
Reported - GAAP	10%	1.5 ppt	(0.8) ppt	19%	22%
(Gains) losses on equity investments	**	**	(0.1) ppt	—%	—%
Litigation provisions	1%	(0.3) ppt	0.1 ppt	(1)%	(1)%



Adjusted - Non-GAAP	11%	1.2 ppt	(0.8) ppt	18%	21%
Currency Impact	(1)%	(0.4) ppt	(0.1) ppt	(3)%	(3)%
Adjusted - Non-GAAP - currency-neutral	10%	0.8 ppt	(0.9) ppt	16%	19%


	Six Months Ended June 30, 2026 as compared to the Six Months Ended June 30, 2025
	Increase/(Decrease)
	Operating expenses	Operating margin	Effective income tax rate	Net income	Diluted earnings per share
Reported - GAAP	11%	1.3 ppt	(0.1) ppt	18%	22%
(Gains) losses on equity investments	**	**	(0.1) ppt	1%	1%
Litigation provisions	3%	(1.1) ppt	(0.2) ppt	(2)%	(2)%
Restructuring charge	(3)%	1.1 ppt	— ppt	2%	2%


Adjusted - Non-GAAP	11%	1.3 ppt	(0.4) ppt	19%	22%
Currency Impact	(2)%	(0.4) ppt	(0.1) ppt	(4)%	(4)%
Adjusted - Non-GAAP - currency-neutral	9%	0.9 ppt	(0.4) ppt	15%	18%

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, 2026 FORM 10-Q

PART I

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