Ladies and gentlemen, thank you for standing by. And welcome to the Mastercard Incorporated Q4 Full Year 2019 Earnings Call. [Operator Instructions] I'd now like to hand the conference over to your speaker today, Warren Kneeshaw, Head of Investor Relations. Please go ahead, sir.

Thank you, Marcella. Good morning, everyone. And thank you for joining us for our fourth quarter 2019 earnings call. With me today are Ajay Banga, our President and Chief Executive Officer; and Sachin Mehra, our Chief Financial Officer. Following comments from Ajay and Sachin, the operator will announce your opportunity to get into the queue for the Q&A session. It is only then the queue will open for questions. You can access our earnings release, supplemental performance data and the slide deck that accompany this call in the Investor Relations section of our website, mastercard.com. Additionally, the release was furnished with the SEC earlier this morning. Our comments today regarding our financial results will be on a non-GAAP currency-neutral basis unless otherwise noted. As a reminder, in Q2 we updated our non-GAAP methodology to exclude the impact of gains or losses on our equity investments. We are excluding these items as we believe this will facilitate a better understanding of our operating performance and provide a meaningful comparison of our results between periods. Our non-GAAP measures also exclude the impact of special items, which represent litigation judgments and settlements and certain one-time items. In addition, we present growth rates adjusted for the impact of foreign currency with the release and the slide deck include reconciliations of non-GAAP measures to GAAP reported amounts. Please note that the growth rates we provide for switched volume, switched transactions and cross-border volume have been adjusted to normalize for the effects of differing switching days between periods. Starting this quarter, we are further adjusting these growth rates to normalize for the effects of differing number of carryover days between periods. Carryover days are those where transactions and volumes from days where we do not clear and settle are processed. Generally, we do not clear and settle dual message transactions on Sundays. These adjustments have been made to current and prior quarters. This information is being provided so that you can better understand the underlying growth rates of our operating metrics. Our comments on the call today will be on the basis of these adjusted growth rates. We do not normalize GDV growth rates. Finally, as set forth in more detail in our earnings release, I would like to remind everyone that today's call will include forward-looking statements regarding Mastercard's future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance are summarized at the end of our earnings release and in our recent SEC filings. A replay of this call will be posted on our website for 30 days. With that, I'll now turn the call over to our President and Chief Executive Officer, Ajay Banga.

Thank you, Warren, and good morning everybody. So we closed our 2019 on a strong note. And for the year, revenue was up 16% and EPS was up 23%, on a non-GAAP currency-neutral basis. I think these results reflect broad based growth across each of our regions and the ongoing execution of our strategy as we continue to invest for the longer term. On the macroeconomic environment, consumer spending remains relatively healthy, and we expect this to continue in 2020. We are, however, monitoring a number of economic and geopolitical factors as well as the potential effects of coronavirus that could impact this outlook. In the U.S., we are seeing stable growth with low unemployment and healthy consumer confidence. Our SpendingPulse estimates for Q4 show retail sales remained solid, up 3.1% versus the year ago ex auto, ex gas. In Europe, we see continued modest growth. UK spending actually held up reasonably well again, according to our SpendingPulse estimates with year-over-year retail sales up [technical difficulty] in Q4 ex auto, gas and restaurants despite uncertainty around the potential impact of Brexit. In Asia Pacific, we are seeing modest GDP growth in the region overall, in part due to the support of favorable monetary policies in several markets. We are pleased with the recent trade deal with China and obviously, we'll continue our efforts to pursue a license to participate in that market domestically. The outlook in Latin America is mixed as growth in Brazil and Colombia was partially offset by weakness in Argentina and Mexico. Meanwhile, we are driving healthy double-digit volume and transaction growth for Mastercard across most of our markets and these results are a function of us growing our core products of differentiating with our unique services, of expanding our digital solutions and footprint, and are leveraging…

Thanks Ajay. So turning to Page 3, you will see that we've delivered strong performance in the fourth quarter to end the year. Here are a few highlights on a currency-neutral basis, and excluding special items, as well as the impact of gains and losses on the company's equity investments. Net revenue grew 17%, driven by solid, broad-based momentum in our core products and services. Acquisitions contributed approximately 1 ppt to this growth. Total operating expenses increased 12%, which includes a 4 ppt increase related to acquisitions. Operating income grew by 22% and net income was up 25%, reflecting our strong operating performance and which includes a 2 ppt and [technical difficulty] ppt reduction due to acquisitions, respectively. EPS grew 28% year-over-year to $1.96, which includes a $0.05 contribution from share repurchases and $0.02 of dilution related to our recent acquisitions. During the quarter, we repurchased about $1 billion worth of stock and an additional $438 million through January 27, 2020. So now let's turn to Page 4, where you can see the operational metrics for the fourth quarter. Worldwide gross dollar volume, or GDV, growth was 12% on a local currency basis, down 2 ppt from last quarter, primarily due to the impact of the differing number of processing days between periods, as well as some lapping of previous wins. U.S. GDV grew 9%, down approximately 3 ppt from last quarter, with credit and debit growth of 12% and 7%, respectively. Outside of the U.S., volume growth was 14%, down 2 ppt from last quarter. Cross-border volume grew at 16% on a local currency basis, driven by double-digit growth across most regions. Turning to Page 5. Switched transactions showed strong growth at 19% globally, reflecting in part the ongoing adoption of contactless. We saw healthy double-digit growth in switched…

Thanks, Sachin. Marcella, we are now ready for the Q&A session.

[Operator Instructions] Your first question comes from the line of Eric Wasserstrom from UBS. Your line is open.

Thanks very much and good morning. Ajay, I just wanted to see if we could get an update on the progress on Mastercard Track. And in terms of the U.S. experience and maybe Australia, which I think was also recently initiated in the past year.

Yes. So Track actually you've got different elements, Australia was part of the whole B2B Hub you are referring to U.S. also had a B2B Hub but Track is an overall approach to the B2B payment space that starts with having the right merchant directories and then connects - and sort of small business and business directories that are all compliance run through in the fully informed directory attached to an invoice presentment engine that also enables our payment optimization engine and the reconciliation system. That's all built inside. Then it uses the distribution channels, one of which is something like the B2B hubs that we have talked about in the past, but it can also go to what our issuers agents and buyers’ agents and as the whole ecosystem there that we are getting into and putting our footprint into. So that's kind of where we are. We piloted during 2019 big customers the full business payment service kind of solution, which we've been developing in the U.S. and in fact also in Latin America. We are rolling it out globally starting in the U.S. in the first quarter [technical difficulty]. We will get to more geographies and more payments over time. That's what we are at, and that’s where we’re going.

And if I can just have one follow-up on that. To the extent that - to what extent is the - are the volumes and revenue benefits from the Mastercard Track hub and the SME B2B space contemplated in the 2020 outlook?

As we've told you when we were discussing this at Investor Day as well, this is more developed. For example our corporate purchasing cards, our fleet cards, our SME cards, our virtual account numbers, our cross-border travel payment systems, those are all relatively well developed and are well factored into the way we think about 2020. The B2B Hub to an extent because it’s got Bank of America, First Hawaiian and Fifth Third in the U.S. and MYOB in Australia, but that's like four customers across the world. And for a company of our size, well, that's important for B2B, it is a bigger picture. What we're really talking about is adding those on over the course of the next 2 to 3 years. So we don't have that built in any great way in 2020, and if we knock the lights out from that, that will be great, but I have a view that this kind of thing takes a little time. Remember as I explained the ecosystem, not only do you build the technology across all of those phases, you also have to sign up all the distribution that enables you to connect with this relatively new ecosystem that Track is specifically aimed at.

Your next question comes from the line of Tien-Tsin Huang from JPMorgan. Your line is open.

I was encouraged to hear the mid-teens outlook for cross-border. I have been getting a lot of questions on the Coronavirus and how to kind of maybe frame this. I'll ask you guys if you don’t mind. How much of your cross border book is tied to the China region, and is there a way to maybe look back or reference SARS or swine flu or something else to maybe get a clue on what this one might do. Thanks.

Let me give you a little bit of color on cross border, right? So as I mentioned, we do see double-digit growth across most of our regions as it relates to cross border. And, as I kind of sit back and I think about it, we had good solid steady performance coming out of the U.S. As it relates to EMEA, and that's, Middle East and Africa and Asia-Pacific as well, we continue to see solid growth. We saw some softness [technical difficulty] Mexico, a function of the local environment out there but by and large the business is running in a very healthy pace. To your specific question around the impact of the Coronavirus, here is what I tell you, it's early days, fortunately, a decent portion of our inbound and outbound cross border from China is e-com related. So it provides some level of a hedge. And we will continue to monitor the environment. It's too early to tell at this point in time, how this thing plays out.

If you remember Tien-Tsin, people have brought their tickets and they are still travelling out for the Lunar New Year. At this stage, if this is much bigger and it becomes a much more sort of urgent and immediate crisis across many parts of the world, then we'll take a look at those numbers once again, but we're going to take this as it comes, one step at a time, and that's the only way to look at this carefully. You got to remember when SARS was on and that was way back in the early part of the last decade in 2003 and 2004, the total business in China was also smaller. The total size of our Company was also smaller, and our ability to be a real player in cross-border across many corridors 18 years ago was very different. So I kind of wouldn't go too much on that. I would rather, think about the natural hedge that e-commerce provides the fact that there's still a lot of travel there, but that could change over the next few weeks, and we’ll keep an eye on it very carefully.

Just real quick follow-up, if you don't mind just on the, I think I heard you say, Bank of America Mastercard Send that was an exclusive arrangement is that the case. And I'm curious if that's maybe a new model that we can expect with that product?

It's actually correct you did hear correctly. Your ears are in good shape Tien-Tsin, even if you had an AirPod shoved inside. But I'm not going to I can't tell you if that's a new model going forward. It's the way that, in this particular case, Bank of America finds value from what we are doing. I don't know yet [technical difficulty] two of these don't make a trend.

Your next question comes from the line of Craig Maurer from Autonomous. Your line is open.

I had a question about recent acquisition activity in the space. Your largest competitor seems to have gone in a somewhat different direction from what we've seen from your acquisitions. And I wanted to get your updated thoughts on acquisitions that moved Mastercard closer to the consumer or closer directly to the merchant?

Hi Craig, we've done it - well closer to the consumer. You can remember, we are a B2B2C company. And so what we're not trying to do is get in between our customers and their consumers that's really not. What we are trying to do is to provide services or capabilities or product sets or [technical difficulty] structure that enables that customer to be a merchant. It could be a government the [transit] authority, a bank, a fintech reach their consumer better. That yes, a 100% that's we're into. So for example, in your specific question or around how you reach fintechs and the like. I'm assuming that's where the reference to our competitor comes from. We've built a series of capabilities in Europe, where as you know, PSD2 has changed the layout between fintechs and banks very substantively. And there, we were actually live with the whole idea of connect, protect and resolve and consult capabilities across a number of fintechs and banks and AISPs and PISPs and all the terminology that has now become part of the day-to-day conversation in Europe. That's a fairly strong position for us. What I do want to make sure in all of this, with merchants, for example, your question around merchants, you don't series of transactions that provide data, analytical and cybersecurity [technical difficulty] services to merchants. Ethoca is a most recent example. RiskRecon is even more recent than that. Loyalty reward schemes that we bought some years ago are connected to that. Brighterion does a series of things with merchants and banks and fintechs so most of our acquisitions cut across this ecosystem. What I am permitted to, is to doing it in a way that respects the rights and the privileges of all the different players in the ecosystem and doing it in a way that [technical difficulty] protects data and privacy all through the system. So we will keep looking for acquisitions that enhance those few words I just mentioned: security and privacy of data, the responsibilities and rights and the priorities of different players in the ecosystem. You'll see us doing that very carefully, very sensibly and keeping at it.

If I could ask one follow-up just on the guidance. What's the thought process for rebates and incentives for the full year as a percentage of gross revenue?

Sorry could you say that again, you broke out there, [Craig though].

The percentage, I think.

Yes.

Yes, sorry.

Yes, I think I got it on rebates and incentives. Your question was what's the guidance on rebate and incentives I'm not going to give you specific guidance. But what I will tell you is we do expect the level of growth in rebates and incentives to pick up in 2020. That's on the back of the deals which we've signed. That's what the news as far as I'm concerned because the way it kind of plays out is these are new and expanded [technical difficulty] deals that come with incremental volume. All of that kind of plays into the thoughts I've shared for 2020.

Okay, thank you.

Craig, one last point on acquisitions. You should expect us to remain relatively committed to the idea of buying something that can break even at the end of year two. And then it becomes part of our base. We no longer pull it out, and you should expect that discipline from us. I believe there is adequate target in the ecosystem [technical difficulty] in our priority areas that can help us grow while doing that in a way that transforms our company as it has done for the last 10 years in a sensible way. That is the right way to approach the value of an acquisition.

Your next question comes from the line of Lisa Ellis from MoffettNathanson. Your line is open.

So, looking for a few comments on China, not on the coronavirus, just more broadly it feels like with the recent trade agreement and then some of these announcements with Alipay and WeChat Pay, opening up their wallets to cards, PayPal's, I guess, recent acquisition of GoPay there. It feels like the market might actually finally be loosening up. But on the other hand, we felt this way before. Ajay, I was just kind of curious, what's your current sort of optimism level around Mastercard gaining access to the domestic China market, sense of timing, likelihood? And then an updated view maybe on how you're thinking about approaching this market given it's so different from others around the world?

Yes so Lisa, I'm going to have to take away anything to do with the coronavirus obviously in the answer because that's got an impact that I don't yet know how to predict, specifically for China. I mean we as a company have, on that particular topic we've actually given our employees two extra weeks to work from home using that ability so that we try and help them manage their own families and their own situation [technical difficulty] in a way that's responsible for them. So we're clearly worried and nervous, like everybody else is, about what's going on there. So just move on from that. And I'd say the trade deal itself, it is the first time that I've seen a trade deal where companies are mentioned by name in terms of what should be agreed upon between two different governments in a bilateral trade deal. I hope that means that all of us will get a better chance to play in the domestic ecosystem in China and that we will bring them [technical difficulty] our ability to party. And then we'll find and win what we can win. We are late to the party because the digital players there have already built substantially good businesses and, frankly, with very good offerings. So they deserve to have won what they've won. The question will be how do, we then break in and how well do we do in that, and that's going to be our task in China. My general attempt about that part of the businesses, I've seen this movie earlier. I'm going to only say anything about [technical difficulty] what we actually see something in writing that changes what our position on the ground is. Meanwhile, we're doing things. We - publicly there's been speculation that…

Terrific. And then maybe as my follow-up, just a quick update on the contactless deployment in the U.S. Do you have any updated stats on sort of where we are in terms of card issuance, merchant acceptance and are you expecting in the 2020 outlook an uptick in U.S. volumes as a result of that or is it more of a 2021 dynamic? Thank you.

I'm pretty certain that U.S. contactless will keep growing throughout 2020 quite attractively. Because if you look at the numbers of the number of bank partners that have committed to issue contactless cards - for a minute let's even forget Apple Pay and Samsung Pay that enable every card through their RFID [technical difficulty] devices to be used. If you just look at the number of cards, we're talking about 70% of our total cards in the U.S. market will be reissued over this 12-month to 14-month period. My own personal cards are already contactless from Citi. And so, I think you'll see that happening. Cabela's is doing that. There's a bunch of others that are actually deeply embedded into the idea of contactless cards. On the acceptance side, as you know, the kind of all new terminals going out are embedded with contactless. So [technical difficulty] the large retailers like Target and 7-Eleven and CVS have announced that they will accept contactless payments. And in fact, over half of U.S. card-present transactions are now happening at contactless-enabled merchant locations. And when the MTA rolls it out system-wide in New York City, and there are other transit systems beginning to do the same in their cities, I think you will get the impetus. Some of it will come in 2020 to your earlier question. More of it will come in 2021. But outside the U.S., that kind of growth pattern is pretty strongly embedded. You know that in Australia, over 80% of transactions under AUD 100 are contactless. So there's a lot going on in that space.

Your next question comes from the line of Chris Donat from Piper Sandler. Your line is open.

Thanks for work on contactless as an MTA rider, I deeply appreciate not having to swipe anymore. The question I wanted to ask, Ajay, was about the other revenue and the percentage - or the portion of that that's organic. Just how sustainable is this roughly 20% level of growth in organic other revenue and - or is it even possible to accelerate with some of your work on the data and other offerings?

[Technical difficulty] Sachin, go ahead.

Sure. Hey Chris, so very quickly, some color around the other revenues line item, right. I mean you've seen that in Q4, we talked about a 25% growth rate in other revenues. That had about 4 PPT coming from acquisitions. So that's where you come up with your number of about 20% for Q4. Let me give you some context. There are three main components, which are there in other revenues. Some of our services lines roll up here, things like cyber and intelligence products, data analytics, consulting and managed services as well as loyalty, right, a significant portion of [technical difficulty] recurring in nature, although there are some such as consulting and loyalty engagements that are project-based and can have some timing between quarters. The second item, which is there in other revenues is our Vocalink-related revenues. And again, this is recurring in nature. And finally, we put a number of our recent acquisitions, and I know you said net of acquisitions. But remember, the acquisitions which we have done will at some point in time become the equivalent of organic growth to your sense. And we put those into the other revenue because of the [technical difficulty] model. So net-net-net, I would tell you, a decent portion of other revenues is recurring in nature, although we're not providing specific estimates for this line item. I will say other revenues, excluding acquisitions, we expect that to grow faster than the overall company growth rate.

Remember that the - a lot of the acquisitions are basically either meant to enhance what Sachin started with, which is our data analytics capability or our cyber and security capability or our managed loyalty capability. A number of - not all of them, but a number of them. When you do that, and two years into acquiring them to become part of the base, they then become part of organic revenue and expenses. So we have to manage the business in a way that at the end of the second year, breaks even, each of them individually and then starts becoming margin-accretive in the third year. That's the discipline that's embedded inside the company's P&L line-by-line with each business that acquired [technical difficulty] a single entity during the year. So absolutely, I expect that organic growth will continue to be good in that line item and as Sachin said, probably higher than that of the whole company.

And just as a follow-up, Sachin, on the project-based component of that, is that - that's relatively small though, right the recurring component of the other revenue is much more significant, right?

[Technical difficulty] component is more significant than the project-based component. And as I mentioned, it's the project-based stuff is typically our consulting and managed services and loyalty pieces. But then again, you go back into cyber and intelligence recurring nature of Vocalink, recurring in nature, a lot of these things are things where you sign agreements and then they kind of stay in play for some time. So yes.

There's been a lot of effort that's gone in to convert some of the nonrecurring into recurring and the manner in which we sign deals and have to work with partners. Part of the idea of what we like is recurring revenue, but that's non-recurring because it opens it all.

Your next question comes from the line of Darrin Peller from Wolfe Research. Your line is open.

I just want to hone in a little more on cross-border for a minute just given that it did show a little bit of a deceleration into January. I think you said 15%, and comps do get easier. So just - I know you talked about mid-teens for the year, but can you give us more color on what type of activity you're seeing in terms of specifically e-comm versus travel. And then I don't think I've ever heard you update what the e-comm percentage of cross-border actually is. If you can help us with that?

Yes. So on cross-border, first, I would just kind of caution and say we're three weeks into the month of January, and the one PPT decline, which you're seeing between 16% in Q4 and 15% in the first three weeks of January, I wouldn't make too much of that, right. Hence the comment which I made about you still expect mid-teens from a cross-border standpoint. Just - but more specifically around some color around what we're seeing in a cross-border standpoint, steady growth in the U.S. right. As it relates to our card-not-present cross-border, we see that at approximately 20%, and that's fairly consistent as we've seen over the past few quarters. As it relates to region by region, in Q4, our APMEA region, which is the combination of Asia Pacific and Middle East and Africa, saw some accelerated pace, as I mentioned earlier. And on the flip side, in LAC, we saw some level of weakness in Mexico, in particular. But there are puts and takes every quarter on this. That's really the color, which I've got. It's steady as it goes as far as cross-border growth right now, and then we'll pick it up from there.

All right. Just a quick kind of housekeeping. I mean you still expect Nets to close, I think you said, first half. I just want to verify that. And if you could remind us of any potential financial impact that we should expect on the year with that on the top and bottom line. And then also, when you think of, Ajay, just make sure that deal doesn't preclude you from doing other meaningful deals this year, are you really on the active hunt right now for something in the first half?

So on the deal front, I - as I said earlier, we look at 40, 50, 60 deals in a year. And in some years, we closed none or 1 or 2, and last year provided more than that number. And honestly, there's a group of people who are like moms in a Santa shop that are working very hard on this. I don't like that reference. And they're working away really hard on this thing, right? And they produce stuff. And then we kind of look at it and say, that one doesn't make sense either because it doesn't fit our strategic profile or the M&A numbers don't make sense or that somehow it doesn't respect those principles I was thinking about when I was asking Craig - answering his question. Or some of them [technical difficulty] too. And then yet others get lost along the way because the negotiation doesn't work out or the due diligence scares the heck out of us. And so it just carries on like that. I don't know how to give you an answer. I would tell you, nothing has changed. I've been on the hunt from the day I joined and still in the hunt.

Yes. I'll just add to Ajay's comment. You asked specifically about Nets. Obviously, we're going through the regulatory approval process as we speak right now. It's our estimate to close Nets in the second quarter of this year. That's the basis of what I've given and the nature of thoughts for 2020, where I kind of mentioned to you that on a full year basis, we expect about a two PPT contribution from acquisitions on revenues and somewhere in that 7% to 9% growth in OpEx relate to acquisitions.

Your next question comes from the line of Trevor Williams from Jefferies. Your line is open.

Sorry to pile on the China theme, but I'm just curious on the outbound cross-border volume from China. So is China UnionPay and WeChat and Alipay have been partnering more with acquirers globally to expand their acceptance footprint outside of China. I guess I'm just wondering longer term, how much of a risk you think there could be to your outbound cross-border volume just if acceptance of those three big Chinese players reaches critical mass, just at least in the major tourist hubs. And I'm not sure if I caught this in response to the question from Tien-Tsin, but I was just wondering what percentage of cross-border is Chinese outbound?

We don't. The first part, I can tell you what's going on. I mean, look, first of all, this is not a new issue of these bilateral agreements between what cut and the Chinese digital wallets with players outside. You should know that the top specifically is concerned because of the way the Chinese rules change over time. What used to be a dual-branded card which are still large numbers there, all the new issuance is single-branded. So banks that are issuing our cards in China, and we are issuing both protocols there every year, those are all now single-branded. And therefore, when they go overseas, those cards can only be running on Mastercard rails, and their transactions cannot be taken on to somebody else's rails. That's just factual. And so just as there's a put and a take on both sides of that, similarly, in the case of the digital wallets, outbound - while - both inbound and outbound used to be not as plain in Alipay and WeChat. You now have known and seen that they've announced for inbound, and there's always ways for them to work with them like we're already doing on different aspects of their outbound work. Will that lead to a completely open system or not? I don't know. Will that change? Will we also operating domestically because the total scale and size of our operation with them will change? I don't know. We'll see. Meanwhile, there's a lot of volume that comes out of China, which has been enabled by the new digital players that I don't believe is going away from us. This is - it's the bigger size of the pie game that we're also talking about. And so our growth on cross-border out of China has been relatively healthy. It goes through its quarterly ups and downs. It goes through stuff, but it's relatively healthy. And I presume that will stay that way over the next few years. Obviously, coronavirus and stuff, as we discussed, already could change a quarter here or a quarter there. I don't know that yet. And we're very carefully keeping an eye on it. But in the big picture, I still see lots of opportunity on our bond cross-border from China.

And just one quick follow-up. I was hoping to just get a little bit more color around some of the mix dynamics. So I know last quarter was a bit unique. You had negative mix across domestic assessments, cross-border and transaction processing. In the domestic assessments, there was a couple hundred basis point benefit this quarter just with pricing, but it looked like transaction processing was lower again due to mix just relative to process transaction growth. Just curious, anything there that you can provide just color-wise to help explain the delta?

Yes. So our transaction processing growth rate. And as you know, switched transactions are growing at a nice clip at 19%. And we're pretty much in line from a transaction processing fee standpoint. What I would tell you is as the business grows and as we do more and the nature of contactless payments, so on and so forth, and you start to proliferate down into smaller-ticket payments, it does have an impact from a mix standpoint. You will expect to see that take – just depending on market and [technical difficulty] in question. I wouldn't make too much of the disparity between the two. The other thing I would tell you is in transaction processing fees, there are line items which are beyond just the high correlation to switched transactions. In other words, some portion of our services are related revenues also are comprising the transaction processing fees.

Your next question comes from the line of Jason Kupferberg from BoA. Your line is open.

I wanted to start with a question just on U.S. credit volume growth still remains quite robust here. I'm wondering how many more quarters of tailwind do we have from Cabela's before that laps. Are you seeing any noticeable uptick from the Apple Card, Venmo card? Or any commentary on kind of the consumer versus the commercial pieces of U.S. credit? And just at a high level, trying to get a sense of the sustainability of these double-digit levels as you do get to some tougher comps, I think, in the next few quarters.

Jason, it's Sachin. So very quickly, I want to give you a little bit of color on - I mentioned earlier about - in my prepared remarks, something about lapping of wins. The Cabela's portfolio has begun to lap, right, as part of our Q4 metrics, as I mentioned earlier, so also Kroger's. But then overall, the market share wins which we've had over the course of the last 12 months, that's starting to roll on. So you're starting to see some of that come on in the nature of Apple Card, so on and so forth. Also, I will mention that we talked about the deals we signed with Citi and Capital One. We would expect for that to also start to roll in. So there's going to be puts and takes. There will be previously won portfolios which will lap, and then there'll be new portfolios and new market share wins which will come in. so all in all, good performance from a credit standpoint in the U.S., as you mentioned.

And just one for Ajay. I'm curious to get your thoughts on synergies potentially between Nets and Vocalink. I know there's some differences there in geographic exposure. But are there some broader enhancements to your alternative network capabilities from the Nets deal? Or are these just kind of separate offerings for different segments of the real-time payments market?

Yes and yes, actually. It's a really good question. What we're buying - it's a really good question. What we're buying with Nets Corporate Services in the Nordics is not just the similar thing to what Vocalink does. So Vocalink both operates the infrastructure, provides for the software real-time payments as well as batch processing and ATM [technical difficulty] but also provides applications and services on top of that infrastructure in the United Kingdom. That is more similar to the P27 deal we signed in the Nordics, where with the banks in the Nordics, we're going to implement fast and real-time payment capabilities using Vocalink's sort of structure and then operate it for them in the Nordics. We're doing that in a number of other countries around the world. We're doing it in different flavors. Some of them are software deals. Some of them we'll operate everything. So Saudi, Peru, the Philippines and so on, right? So there's that element. The Nets Corporate Services piece that we've bought in - that we're trying to close on in the second quarter in the Nordics actually provides for using all those underlying services for payments and builds, and they connect all the B2B payment systems. They connect all kinds of players in the Nordics and outside of the Nordics with Nordics there. So that's a whole different capability. I'm quite hopeful that we can apply both these solutions to different segments, as well as enhance each other's capabilities in different markets around the world. So Paul Stoddart, who runs all this for us and came out of Vocalink, he used to be the Chief Operating Officer of Vocalink when we first bought them. Paul's kind of the guy who's running all this for us and stitching it together over the next period of time. It's a great question.

Your next question comes from the line of Joseph Foresi from Cantor Fitzgerald. Your line is open.

I was wondering if you could talk about the margin profile of the business short and long term. I know you've given comments on the back past that you don't run the business to the margin. But given the differences between you and your competitor, I was wondering if you could give a little bit more color on your - on the progression or cadence there.

So my view has been that we will - it's a mathematical calculation of business in some ways. As long as you keep revenue on the margin appropriately and you manage your expenses right, this business has a higher fixed cost and a lower variable cost per transaction. If you add more capacity and you pump more volume through it, you will find yourself growing as the margin - even on your operating margin. That's just math. What's changing along the way is that we're trying to take that math and apply that surplus we get to building and diversifying the revenues of this company. And those, when you acquire those businesses, they may not follow that. But over time, they get there as a number of our services businesses used to be less recurring, back to an earlier question. Now they have got a much higher profile of recurring revenue. A number of our services businesses, their margins have grown over time as the volume being put through them, thanks to their access to our network of distribution and partners, increases. So our attitude towards our margin is healthy growth, not kind of pushing that as what we managed to. We manage gross and net revenue and we manage through expenses, and we manage that kind of space for our future. We don't actually manage through margin. That's why, as said, we'll keep a healthy margin of 50-plus because I want you to know I'm not going to throw money away, kind of my reference to even the acquisitions and the discipline around the acquisitions. But the idea is that we will eventually, always through math, be growing sensibly. You could see it over the last few years.

Got it. And then just as a follow-up - I'm sorry. Just there is no...

[indiscernible].

Okay, great. I appreciate it. Well, this will - I'll make it a softball then so we can end on a good note. Yes. Well, I'll do my best now. Focus is on it, right? So - but you've done a great job of expanding your addressable market into new areas. We talked about B2B and contactless. And I know China is on the horizon maybe over the long term. Which of these areas are you most excited about in the short term over the next year? Where should we be spending our time because there just seems to be an expanding amount of areas in your expanding addressable market?

I think over the short term, you should continue to remain very focused on our Cyber & Intelligence services business, and you should look forward to more growth in contactless. Everything else, just by the nature of the ecosystem that we work in, has a longer time to resolve than these. These ones, we're able to put [technical difficulty] solution system in a form that enables us to have a little more control over the outcome than we would in the others. We've got to work everybody towards it.

All right. Thanks. Any final comments, Ajay?

Yes, sir. First, I'm going to wrap up very quickly. Thank you for all your questions. We've had another strong year. We've had broad-based growth across each of our regions. We're driving solid deal momentum. We're trying to capture new flows through the conversation we were just having with our multi-rail capabilities. Our recent acquisitions are performing well within the businesses that we've talked about again today. We look forward to working with our new colleagues from RiskRecon. We've got another one, the Nets Corporate Services, on the horizon. When that comes in, we're going to work hard with them. And we're progressing well against the three-year performance objectives that we laid out for you for 2019, 2020 and 2021. With that, thank you all for being a part of this journey, and thanks again for joining us.

Thank you.

This concludes today's conference call. You may now disconnect.