Mastercard MA · USD

Segment Reporting Mastercard has concluded it has one reportable operating segment, “Payment Solutions.” The Payment Solutions segment derives its revenues from a wide range of payments solutions provided to customers. Revenue is generated from providing customers continuous access to Mastercard’s global payments network, as well as by providing value-added services and solutions, whether integrated and sold with the payment network or on a stand-alone basis. All of the segment’s activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based upon analysis of Mastercard at the consolidated level. The accounting policies of the Payment Solutions segment are the same as those described in Note 1 (Summary of Significant Accounting Policies).Mastercard’s Chief Executive Officer has been identified as the chief operating decision-maker (“CODM”). The CODM assesses performance for the Payment Solutions segment and decides how to allocate resources, including whether to reinvest profits into the Payment Solutions segment or into other business activities such as for acquisitions, to pay dividends or for share repurchases, based on net income as reported on the consolidated statements of operations (“Consolidated Net Income”). The CODM uses Consolidated Net Income and other measures for internal planning and forecasting purposes and in the calculation of performance-based compensation. The following represents the selected financial information regularly reviewed by the CODM to assess performance of the Payment Solutions segment for the years ended December 31:202520242023(in millions)Net revenue$32,791 $28,167 $25,098 Less:Personnel7,251 6,673 6,022 Professional Fees537 549 495 Data processing and telecommunications1,272 1,119 1,008 Foreign exchange activity113 65 83 Advertising and marketing929 815 825 Depreciation and amortization1,143 897 799 Provision for litigation504 680 539 Investment Income(325)(327)(274)(Gains) losses on equity investments, net88 29 61 Interest expense722 646 575 Other (income) expense, net(166)(20)7 Income tax expense3,610 2,380 2,444 Other segment items 1 2,145 1,787 1,319 Consolidated Net Income$14,968 $12,874 $11,195 1Includes fulfillment costs, occupancy costs, travel and meeting expenses, and other overhead expenses.

Revenue Mastercard is a payments network service provider that generates revenue from a wide range of payments solutions provided to customers. Revenue from contracts with customers is recognized when services are performed in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those services (i.e., fees charged to customers). The Company disaggregates its net revenue from contracts with customers into two categories: (i) payment network and (ii) value-added services and solutions. The Company’s net revenue categories, payment network and value-added services and solutions, are recognized net of rebates and incentives provided to customers. Rebates and incentives can be either fixed or variable and are attributed to the category of revenue to which they pertain. Payment networkMastercard’s payment network involves four participants in addition to the Company: account holders (a person or entity who holds a card or uses another device enabled for payment), issuers (the account holders’ financial institutions), merchants and acquirers (the merchants’ financial institutions). Revenue from the Company’s payment network is primarily generated by charging fees to customers (issuers, acquirers and other market participants) for providing switching and other network-related services, as well as by charging fees to customers based primarily on the gross dollar volume of activity (GDV, which includes both domestic and cross-border volume) on the cards that carry the Company’s brands. As a payments network service provider, the Company provides its customers with continuous access to its global payments network and stands ready to provide transaction processing over the contractual term. Consideration is variable and is recognized as revenue in the period in which volumes and transactions occur. Value-added services and solutionsThe Company generates revenues from value-added services and solutions through either fixed or transaction-based fees. These services and solutions can be integrated and sold with the Company’s payment network services or can be sold on a stand-alone basis. These services and solutions primarily include security solutions, consumer acquisition and engagement services, business and market insights, digital and authentication solutions, processing and gateway, ACH batch and real-time account-based payments and solutions, and open finance.

Commitments At December 31, 2025, the Company had the following future minimum payments due under noncancelable agreements, primarily related to sponsorships to promote the Mastercard brand and licensing arrangements. The amount accrued related to these future payments as of December 31, 2025 was not material.

Debt Debt consisted of the following at December 31:20252024EffectiveInterest Rate(in millions)Senior Notes2025 USD NotesFloating RateSenior Notes due March 2028$300 $— **4.550 %Senior Notes due March 2028450 — 4.727 %4.950 %Senior Notes due March 2032500 — 5.063 %2024 USD Notes4.100 %Senior Notes due January 2028750 750 4.262 %4.350 %Senior Notes due January 20321,150 1,150 4.446 %4.550 %Senior Notes due January 20351,100 1,100 4.633 %4.875 %Senior Notes due May 20341,000 1,000 5.047 %2023 USD Notes4.875 %Senior Notes due March 2028750 750 5.003 %4.850 %Senior Notes due March 2033750 750 4.923 %2022 EUR Notes1.000 %Senior Notes due February 2029882 781 1.138 %2021 USD Notes2.000 %Senior Notes due November 2031750 750 2.112 %1.900 %Senior Notes due March 2031600 600 1.981 %2.950 %Senior Notes due March 2051700 700 3.013 %2020 USD Notes3.300 %Senior Notes due March 20271,000 1,000 3.420 %3.350 %Senior Notes due March 20301,500 1,500 3.430 %3.850 %Senior Notes due March 20501,500 1,500 3.896 %2019 USD Notes2.950 %Senior Notes due June 20291,000 1,000 3.030 %3.650 %Senior Notes due June 20491,000 1,000 3.689 %2.000 %Senior Notes due March 2025— 750 2.147 %2018 USD Notes3.500 %Senior Notes due February 2028500 500 3.598 %3.950 %Senior Notes due February 2048500 500 3.990 %2016 USD Notes2.950 %Senior Notes due November 2026750 750 3.044 %3.800 %Senior Notes due November 2046600 600 3.893 %2015 EUR Notes2.100 %Senior Notes due December 2027941 833 2.189 %2.500 %Senior Notes due December 2030176 156 2.562 %19,149 18,420 Less: Unamortized discount and debt issuance costs(122)(131)Less: Cumulative hedge accounting fair value adjustments 1(27)(63)Total debt outstanding19,000 18,226 Less: Short-term debt 2(749)(750)Long-term debt$18,251 $17,476 **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 0.44%.1The Company has an interest rate swap that is accounted for as a fair value hedge. See Note 21 (Derivative and Hedging Instruments) for additional information.2As 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.

Income Taxes Components of Income and Income Tax Expense The domestic and foreign components of income before income taxes for the years ended December 31 were as follows:202520242023(in millions)United States$6,652 $6,168 $4,506 Foreign11,926 9,086 9,133 Income before income taxes$18,578 $15,254 $13,639 The total income tax provision for the years ended December 31 was comprised of the following components:202520242023(in millions)CurrentFederal$1,265 $1,093 $991 State and local(198)144 127 Foreign2,486 1,670 1,563 Total current3,553 2,907 2,681 DeferredFederal(173)(197)(180)State and local32 (14)(18)Foreign198 (316)(39)Total deferred57 (527)(237)Income tax expense$3,610 $2,380 $2,444 Effective Income Tax RateA reconciliation of the effective income tax rate to the U.S. federal statutory income tax rate for the years ended December 31, was as follows:202520242023AmountPercentAmountPercentAmountPercent($ in millions)Income before income taxes$18,578 $15,254 $13,639 Federal statutory tax3,901 21.0 %3,203 21.0 %2,864 21.0 %Foreign tax effectsSingaporeStatutory tax rate difference between Singapore and U.S.(161)(0.9)%(162)(1.1)%(147)(1.1)%Singapore tax incentive(330)(1.8)%(644)(4.2)%(571)(4.2)%Pillar 2 Rules233 1.3 %— — %— — %Other foreign jurisdictions408 2.2 %240 1.6 %374 2.7 %Effects of cross border tax lawsForeign-derived intangible income deduction(204)(1.1)%(195)(1.3)%(144)(1.1)%U.S. foreign tax credits(259)(1.4)%(224)(1.5)%73 0.5 %Other140 0.8 %77 0.5 %110 0.8 %Effects of changes in tax law— — %— — %(688)(5.0)%Valuation allowance76 0.4 %113 0.7 %644 4.7 %Other, net$(194)(1.0)%(28)(0.2)%(71)(0.5)%Income tax expense$3,610 19.4 %$2,380 15.6 %$2,444 17.9 % Note: Table may not sum due to rounding.As of January 1, 2025, the Company adopted new FASB guidance related to income tax disclosures on a retrospective basis. The effective income tax rates for the years ended December 31, 2025, 2024 and 2023 were 19.4%, 15.6% and 17.9%, respectively. The effective income tax rate for 2025 was higher than the effective income tax rate for 2024, primarily due to a change in the net tax effect of the Company’s Singapore operations, which includes the 15% global minimum tax (Pillar 2 Rules) that took effect in 2025. Additionally, a change in the Company’s geographic mix of earnings contributed to the higher effective income tax rate, partially offset by net discrete tax benefits.

Share-Based Payments In May 2006, the Company granted the following awards under the Mastercard Incorporated 2006 Long Term Incentive Plan, which was 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. The Company has granted Options, RSUs and PSUs under the LTIP. The Company uses the straight-line method of attribution for expensing all equity awards. Compensation expense is recorded net of estimated forfeitures, with estimates adjusted as appropriate.There are approximately 116 million shares of Class A common stock authorized for equity awards under the LTIP. Although the LTIP permits the issuance of shares of Class B common stock, no such shares have been authorized for issuance. Shares issued as a result of Option exercises and the conversions of RSUs and PSUs were funded primarily with the issuance of new shares of Class A common stock.Stock OptionsOptions expire ten years from the date of grant and vest ratably over three years. For Options granted, a participant’s unvested awards are forfeited upon termination; however, in the event a participant terminates employment due to disability or retirement more than seven months after receiving the award, the participant retains all of their awards without providing additional service to the Company. Retirement eligibility is dependent upon age and years of service. Compensation expense is recognized over the vesting period as stated in the LTIP. The fair value of each Option is estimated on the date of grant using a Black-Scholes option pricing model. The following table presents the weighted-average assumptions used in the valuation and the resulting weighted-average fair value per Option granted for the years ended December 31:202520242023Risk-free rate of return4.1 %4.2 %4.2 %Expected term (in years)6.006.006.00Expected volatility27.4 %28.7 %29.5 %Expected dividend yield0.5 %0.6 %0.6 %Weighted-average fair value per Option granted$192.87 $164.66 $123.22 The risk-free rate of return was based on the U.S. Treasury yield curve in effect on the date of grant. The expected term and the expected volatility were based on historical Mastercard information. The expected dividend yields were based on the Company’s expected annual dividend rate on the date of grant.

Acquisitions In 2025, the Company did not complete any business acquisitions.In 2024, the Company acquired businesses for total cash consideration of $2.8 billion. In December 2024, Mastercard acquired a 100% equity interest in RF Ultimate Parent, Inc. (“Recorded Future”), a global threat intelligence company, for cash consideration of $2.7 billion. This acquisition is expected to add threat intelligence capabilities to Mastercard’s identity, fraud prevention, real-time decisioning and cybersecurity services. The net assets acquired primarily related to intangible assets, including goodwill of $1.7 billion that is primarily attributable to the synergies expected to arise after the acquisition date. None of the goodwill is expected to be deductible for local tax purposes.In 2023, the Company did not complete any material business acquisitions.These acquisitions align with the Company’s strategy to grow, diversify and build the Company’s business. Refer to Note 1 (Summary of Significant Accounting Policies) for the valuation techniques Mastercard utilizes to fair value the respective components of business combinations. In 2025, the Company finalized the purchase accounting for the businesses acquired in 2024. The fair values of the purchase price allocations in aggregate, as of the acquisition dates, are noted below for the businesses acquired in 2024. 2024(in millions)Assets:Cash and cash equivalents$270 Prepaid expenses and other current assets79 Goodwill1,736 Other intangible assets, net1,361 Other assets20 Total assets3,466 Liabilities:Other current liabilities413 Deferred income taxes 207 Other liabilities65 Total liabilities685 Net assets acquired$2,781 The following table summarizes the identified intangible assets acquired in 2024:20242024Acquisition Date Fair ValueWeighted-Average Useful Life(in millions)(in years)Developed technologies$530 8.9Customer relationships781 15.0Other50 9.0Other intangible assets, net$1,361 12.4Proforma information related to these acquisitions was not included because the impact on the Company's consolidated results of operations was not considered to be material.

Management responsibilitiesWe have a core group of senior executives who are responsible for assessing and managing risk and implementing policies, procedures and strategies pertaining to security governance, data protection and privacy. These executives include:•Chief Security Officer (CSO), who develops and oversees the programs, policies and controls we have implemented across the organization to reduce and prevent logical and physical risks, including information security and cyber risks to our people, intellectual property, data and tangible property •Chief Privacy and Data Responsibility Officer, who establishes and oversees the programs, policies, processes and controls we have implemented across the organization to ensure compliance with worldwide laws and regulations regarding how we collect, use, share, store, transfer and otherwise process data and utilize AI, while also managing our relevant engagements with regulators, policymakers and key stakeholders•Chief Data Officer, who establishes and oversees our efforts to maintain an ethical, responsible enterprise data program that adheres to our high standards for data quality, curation and governance while minimizing data risks•Data Protection Officer, who reports to the Chief Privacy and Data Responsibility Officer and, with the support of the Global Data Protection Office, ensures that we continue to adhere to the GDPR and local privacy requirements, including by handling privacy requests from individuals and regulatorsIn order to be appointed to one of the roles described above, we require expertise with cybersecurity or data privacy (as applicable), as demonstrated by prior work or other cybersecurity or data privacy experience or possession of a cybersecurity or data privacy degree or certification. Each individual currently serving in these roles meets the applicable expertise requirements. How management is informed of and monitors incidentsOur management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risks are monitored, implementing appropriate mitigation measures and maintaining our cybersecurity programs.