This morning, we reported our financial performance for the first quarter. Yet, where we sit in April is a much different world than where we were the last time I shared thoughts on our performance.
Our first quarter started strong, building on the momentum and the foundation we have created over the last decade. As COVID-19 spread across the world, it had an impact on our performance and the trends we were seeing, something we shared through the first quarter.
Despite being an unprecedented situation, this past quarter is one where the resiliency of our teams shined through. They have been executing on our strategy and staying focused on our customers and partners, getting evermore closer to them to help them manage through the challenges of today.
During our call with the financial community, we shared a four-phase framework that is helping us think through the progression of this situation in the coming months so that we can continue to plan, adapt and run this company to best serve our customers and support the economic recovery as a whole:
Containment – Countries are focused on slowing the spread of the virus, resulting in the rapid contraction in spending overall that we saw in February and into March.
Stabilization – As people comply with social distancing, border restrictions and closing of schools and non-essential businesses, spend levels plateau.
Normalization – This is when we will see gradual easing of restrictions and phased opening of businesses. We would expect that spending levels commence the path to recovery to pre-COVID levels in this phase.
Growth – The final stage is where spending levels trend higher than pre-COVID levels. We believe a widely available vaccine will help to deliver this stage.
In several markets, spending is stabilizing around a new lower level, largely focused on necessities and in the online channels.
Amidst this environment, our efforts in this first quarter have leveraged the strengths we have built and invested in over several years to address the truly extraordinary challenges of today.
Our services activities – including insights, analytics and cybersecurity, among others – are proving invaluable to support our customers as they navigate today’s environment. These same solutions are diversifying the revenue base of the company and boosting the growth of our core products and solutions.
Best-in-class digital capabilities are helping businesses meet the increased demands for an online and in-app presence required today. Our payments gateway and Simplify Commerce are establishing digital acceptance, while our digital debit product is providing new opportunities for more consumers to shop in these online stores.
The continued expansion of our account-to-account payment capabilities, including real-time payments, supports a wide range of in-demand account-to-account payments that people are looking for today, from recurring payments to P2P to gig worker payments.
We’re focused on innovating and advancing the solutions that will power the post-COVID economy. As the world becomes even more digital-centric, our investment in open banking platforms and digital identity will reinforce the convenience, trust and peace of mind people expect from Mastercard
This same commitment extends to how we support our community. This week, we expanded our pledge to bring more people and more micro and small businesses into the digital economy by 2025. And, we’ve worked to do our part in response to the pandemic, supporting small businesses across the globe, investing in the research that will deliver therapies and vaccines for the virus, and joining with public and private sector partners to help displaced workers.
We will build on the foundation of a strong balance sheet and liquidity to invest organically and inorganically in those things that are needed to navigate today’s challenges and capitalize on tomorrow’s opportunities.
All of this will help us further differentiate our company, advance our Grow, Diversify and Build strategy, and deliver on our commitments to our customers, partners and consumers.