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7,500 | V | 3 | 2,024 | 2024-07-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: We'll do one more question, please.
Operator: For our final question, we'll go to the line of Harshita Rawat from Bernstein. Please go ahead.
Harshita Rawat: Good afternoon. Ryan, Chris U.S. card volume growth of 5% in surface kind of suggests a little bit more of a mature market. Now I understand the category differences between card volume growth and DC growth, which influence the delta here. Ryan, you discussed your global down estimate of $20 trillion in consumer payments for Visa. How should we think about, the secular digitization opportunity and the growth algorithm for the U.S., which is your biggest market? Thank you.
Ryan McInerney: Okay. It was a little hard for us to hear you, Harshita, but I think I got the gist of your question around the growth algorithm for consumer payments, especially in mature markets. So as I've said before, we see more than $20 trillion of opportunity around the world. About a quarter of that is in the U.S., by the way. And that's cash, that's check, that's ACH, that's electronic transactions, that's cards that run on domestic networks and the like. And we're capturing that opportunity through a few different ways. One is continuing to expand acceptance and expand the places, where people can use cards. In the U.S., rent would be a great example. We've been having some really good success, penetrating the rent vertical. The second is making it easier to drive e-commerce growth and e-commerce transactions, which has an outsourced impact on our ability to drive growth on Visa, for those types of things. And third is just continuing to innovate with new products and services that, make our issuers want to issue Visa and consumers want to use them. We announced a full slate of new product innovations at our Visa Payments Forum this year. And those are the types of products that, we believe are going to help us win in the marketplace, and help us capture and digitize a big chunk of that opportunity on the Visa network. |
7,501 | V | 3 | 2,024 | 2024-07-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: And with that, we'd like to thank you for joining us today. If you have any additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.
Operator: Thank you, all, for participating in the Visa fiscal third quarter 2024 earnings conference call. That concludes today's conference. You may disconnect at this time, and please enjoy the rest of your day. |
7,502 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Operator: Welcome to Visa's Fiscal Second Quarter 2024 Earnings Conference Call. All participant lines are in a listen-only mode until the question-and-answer session. Today's conference is being recorded. If you object, you may disconnect at this time. I would now like to turn the call over to your host Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin.
Jennifer Como: Thanks, Holly. Good afternoon, everyone, and welcome to Visa's fiscal second quarter 2024 earnings call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance and our actual results could differ materially as a result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10-K and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. For non-GAAP financial information disclosed on this call, the related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan. |
7,503 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Good afternoon, everyone. Thank you for joining us. We delivered strong second quarter results with $8.8 billion in net revenue up 10%, GAAP EPS up 12% and non-GAAP EPS up 20%. For our key business drivers, we saw relative stability. Overall payments volume grew 8% year-over-year in constant dollars, US payment volume grew 6% year-over-year and international payments volume grew 11%. Cross-border volume excluding Intra-Europe rose 16% year-over-year and process transactions grew 11%. Visa's business performance demonstrates our strategy at work in consumer payments, new flows, and value-added services. Furthermore, across all of these growth levers, tremendous opportunity remains. I'll spend a few moments on each growth lever. Let's start with consumer payments. The opportunity in consumer payments is enormous. Based on the latest public data from calendar year 2022 and our analysis, we estimate that the total global purchase personal consumption expenditure or PPCE excluding Russia and China was approximately $40 trillion. Within that $40 trillion, our addressable opportunity is more than $20 trillion. This includes three components. One, cash and check, which is about half of the addressable opportunity. Tap-to-pay is a great example of how we are converting small ticket cash transactions to Visa credentials. Two, ACH and other electronic transactions. We have many examples in this space, including the work we are doing to extend Visa as a bill pay method in acceptance categories like rent, education and loan repayments. And three, cards that run primarily on domestic networks. We have been focused on converting these domestic based cards to Visa credentials in countries around the world and I'll share a good example from Europe in a moment. There is a very long runway ahead and I remain excited about Visa's future growth opportunity in consumer payments. We continue to capture that growth by delivering innovative and secure payment solutions for buyers and sellers, including new credentials |
7,504 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | to capture that growth by delivering innovative and secure payment solutions for buyers and sellers, including new credentials and issuance, tap-to-pay and e-commerce. I'll briefly talk about each. First, we're making great progress in expanding the number of Visa credentials. We have added over 100 million credentials from September to December for a year-over-year growth rate of 6%. One area of focus is in Europe. With the UK growing credentials at its fastest rate since 2016, driven in part by strong growth from fintech clients. In addition, from 2018 to 2023, we converted more than 20 million credentials in Europe that primarily ran on domestic networks to Visa debit credentials with millions more in the process of being migrated. This is a great example of the opportunity I mentioned a moment ago. We're particularly excited as we prepare for the Paris Olympics, which are less than 100 days away. We have close to 300 clients across 85 countries globally working with Visa to activate our Olympic sponsorship for marketing campaigns and cardholder engagements such as credential issuance and onsite cardholder events. And in Europe alone, we expect our clients to have issued over 5 million Olympic and Paralympic branded Visa credentials before the start of the games. Also this quarter in Europe, we renewed our relationship with Caixa Geral de Depositos in Portugal across consumer credit, debit and prepaid and commercial credit and debit as well as a suite of value-added services, including risk solutions and analytics. Another area of strength is our co-brand issuance. Visa is the primary network partner for eight of the top 10 co-brand partnerships in the US today and we are pleased that Visa has finalized a multi-year extension of our successful credit co-branded partnership with Alaska Airlines, a portfolio that benefits from a loyal customer base and high cross-border usage. We have also had significant co-brand momentum in CEMEA. First, we launched a new co-brand card in partnership with Qatar Airways, |
7,505 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | have also had significant co-brand momentum in CEMEA. First, we launched a new co-brand card in partnership with Qatar Airways, British Airways and the National Bank of Kuwait. Second, we expanded our strong global Marriott relationship to launch Qatar's first hospitality co-branded card with Qatar Islamic Bank. Across the United Arab Emirates, we now have exclusive agreements with all the leading airlines marked by a recent agreement with Emirates Skywards. And we also signed an inaugural Airline co-brand agreement in Morocco with Royal Air Maroc. Now newer digital issuers are equally important to our future growth in consumer payments. And in Saudi Arabia, fintech stc pay, which has over 12 million customers is transitioning from a digital wallet to a full digital bank and expanding its Visa prepay business into Visa debit and credit. Digital Bank Maya in the Philippines has chosen Visa to offer its millions of mobile wallet users and bank depositors access to consumer credit cards with new issuance of affluent products. In the US, we signed a newly expanded credit deal with brokerage platform Robinhood, including the launch of a new Robinhood Gold Card, which offers 3% cashback for all purchases. In Europe, broker and savings platform Trade Republic has launched a new Visa card that combines spending and savings for their 4 million customers across 17 markets. Over 1 million people joined the waitlist for the card in just a few weeks. As I've mentioned in the past, we feel great about our products, our value-added services, our new flows capabilities, our brand, and our people, all coming together to deepen and expand our partnerships with our clients around the world. As we think about Visa's growth, tap-to-pay and e-commerce are key drivers in the digitization of payments. This quarter, tap-to-pay grew five percentage points from last year to 79% of face-to-face transactions globally, excluding the US. Of note, Japan nearly doubled its penetration since last year to almost 30%. In the US, in the second |
7,506 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | excluding the US. Of note, Japan nearly doubled its penetration since last year to almost 30%. In the US, in the second quarter, we're nearing 50% penetration with New York City at over 75%. The first US city to reach this milestone up from 50% two years ago, demonstrating the impact that transit and our focused issuance and acceptance have on accelerating growth. On the e-commerce front, we continued to see Visa's US e-commerce payments volume grow several points faster year-over-year than face-to-face spend. And the same is true in many key countries around the world, including Canada, Brazil, Australia and India. And this matters to Visa's growth because in the e-commerce space, cash is not usually an option. And although e-commerce payments are a highly competitive environment, we believe our capabilities and our focus on safety, security, reliability, and user experience position us very well. Adding to the potential for growth is tokenization, which brings several benefits to the ecosystem, especially in e-commerce, including reducing fraud, improving authorization rates and therefore making it easier for a customer to purchase a good or service. As of the second quarter, we have over 9.5 billion tokens globally and have surpassed a milestone of 1 billion tokens in Asia-Pacific joining the ranks of the US and Europe. We continue to be focused across all of these efforts in addition to seeking new areas of acceptance and spending. Now moving to new flows. We mentioned last quarter that we see $200 trillion of opportunity excluding Russia and China and we are delivering Visa's commercial and money movement solutions to help digitize these flows. This quarter, new flows revenue growth improved to 14% year-over-year on a constant dollar basis with Visa Direct overall transactions growing 31% for the quarter to $2.3 billion and commercial volumes up 8% year-over-year in constant dollars. Throughout the quarter, we remain focused on our Visa Direct strategy across several areas of growth, including through new |
7,507 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Throughout the quarter, we remain focused on our Visa Direct strategy across several areas of growth, including through new use cases, expansion to new geographies and enablers. One recent example is our expanded agreement with Thunes, which increased the number of countries in which Visa Direct can enable push-to-wallet from 78 to 108. In addition, Thunes is implementing Visa Direct's push-to-card capability to enable payouts made to eligible Visa cards and accounts. We have also expanded earned wage access in Canada through an agreement with Payfare and have brought our first Visa Direct cross-border capability into Taiwan with Taishin Bank. On the enabler front, we are pleased that our long-time partner JPMorgan Payments will be seamlessly integrating Visa Direct into their acquiring operations to offer their business clients faster push payments capabilities. In addition, we continued to deepen our relationship with Chase in the small business market with investment and enhancements in products and services. And in accounts receivable and payable, we renewed and expanded our multi-year agreement with Bill on their accounts payable, spend and expense management platforms. We have also reached a global partnership with Taulia, an SAP company and a leading provider of working capital management solutions. The collaboration will incorporate Visa's digital payments technology into Taulia's virtual cards, a solution that integrates with SAP ERP solutions and business applications to make embedded finance accessible for businesses through a seamless and streamlined payments experience for buyers and suppliers. One vertical in new flows that has immense potential is government payments, representing over $15 trillion in annual payments volume opportunity, where we are in a strong position to combine many of our new flows offerings. A recent example is in Kenya, where we signed an agreement with Pesaflow, a technology partner for the government of Kenya to expand card payments on eCitizen, the government's electronic |
7,508 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Pesaflow, a technology partner for the government of Kenya to expand card payments on eCitizen, the government's electronic platform with over 12 million users. We achieved this by bringing together Visa Virtual credentials and Visa Direct into the platform. Now let me move on to value-added services, where revenue was up 23% in the second quarter in constant dollars. The growth and opportunity in value-added services continue to be significant and broad-based. In Acceptance Solutions, we signed an agreement with Millicom International Cellular in Latin America for cybersource gateway, decision manager and token management solutions. As it relates to open banking, just about two years ago, we acquired Tink as we saw the opportunity in open banking to enable the movement of data and money and to provide consumers with control over their financial data. Over those two years, we have been expanding our presence in Europe, winning deals with such as Adyen and Revolut. We're now expanding open banking solutions through Tink into the United States having signed several data access agreements, including with Capital One, Fiserv, and Jack Henry, so that their customers may share data with Tink. We've also signed partnerships on the fintech and merchant side including Dwolla and Max Rewards. And across our risk offerings, we continue to bolster them through our technology, innovation and AI expertise and are expanding their utility beyond the Visa network. Recently, we announced three such capabilities in our Visa Protect offering. The first is the expansion of our signature solutions Visa Advanced Authorization and Visa Risk Manager for non-VISA card payments making them network agnostic. This allows issuers to simplify their fraud operations into a single fraud detection solution. The second is the release of Visa Protect for account-to-account payments, our first fraud prevention solution built specifically for real-time payments, including P2P digital wallets, account-to-account transactions and Central Bank's |
7,509 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | built specifically for real-time payments, including P2P digital wallets, account-to-account transactions and Central Bank's instant payment systems. Powered by AI-based fraud detection models, this new service provides a real-time risk score that can be used to identify fraud on account-to-account payments. We've been piloting both of these in a number of countries and our strong results thus far have informed our decision to roll these out globally. The third solution is Visa Deep Authorization. It is a new transaction risk scoring solution tailored specifically to the US market to better manage e-commerce payments powered by a world-class deep learning recurrent neural network model and petabytes of contextual data. We also continue to make our offerings available through third-party platforms. We mentioned ServiceNow last quarter and we are excited to have recently joined the AWS Partner Network to help seamlessly provide our clients running systems in the cloud access to Visa's solutions, initially starting with Currencycloud, now known as Visa Cross-Border Solutions and Pismo. We also signed an agreement with Stripe for them to distribute Verify solutions through a self-service dispute management platform for their merchants. All of these efforts are part of our strategy to build and offer our solutions for both Visa and our network of networks. Before I hand it to Chris, I wanted to note that we have commenced the exchange offer for Visa's Class B1 common stock that is set to expire at the end of next week. I also wanted to highlight that this quarter, after nearly 20 years of litigation, we have agreed to a landmark settlement with US merchants, more than 90% of which are small businesses, lowering credit interchange rates and capping those rates into 2030 once approved by the court. The injunctive relief class settlement also provides updates to several key network rules, giving merchants more choice in how they accept digital payments. Last, let me share a few closing thoughts on the quarter and |
7,510 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | giving merchants more choice in how they accept digital payments. Last, let me share a few closing thoughts on the quarter and beyond. First, our second quarter was marked by stable results and strengthened relationships with clients across the globe. Second, as we head into the back half of our fiscal year and beyond, new flows and value-added services remain key areas of focus. We also see significant opportunity in consumer payments by digitizing cash and check, enhancing our capabilities in e-commerce, and building new solutions for our network of networks. I could not be more excited for what lies ahead. Finally, all of this is possible because of the 30,000 Visa employees who come to work every day in service of our clients and partners, I am grateful for everything that you do, thank you. And now over to Chris. |
7,511 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Thanks, Ryan. Good afternoon, everyone. As Ryan said, Q2 was a strong quarter with relatively stable growth across payments volume, process transactions, and cross-border volume. Looking at our drivers, in constant dollars, global payments volume was up 8% year-over-year and process transactions grew 11% year-over-year. Cross-border volume growth excluding Intra-Europe was up 16% year-over-year in constant dollars. Fiscal second quarter net revenue was up 10% in nominal and constant dollars, which was slightly above our expectations, primarily due to lower-than-expected incentives and better-than-expected value-added services revenue that collectively more than offset lower-than-expected currency volatility. GAAP EPS was up 12% and non-GAAP EPS was up 20% in nominal and 21% in constant dollars. So let's go into the details, starting with total payments volume. Global payments volume growth in Q2 was 8%, consistent with Q1 growth. There are a couple of things I'd like to highlight when comparing Q2 to Q1. First, the extra day for the leap year was a benefit to the quarter. This was offset primarily by slowing payments volume growth in Asia-Pacific mostly due to macroeconomic weakness in Mainland China. When we adjust for Asia and some other smaller factors, we see second quarter global payments volume growth generally in line with the first quarter. Now on to the US. US payments volume grew 6% year-over-year, credit grew 6% and debit grew 6%. Card present spend grew 4% and card not present volume grew 8%. Reg II had a similar modest impact in Q2 as we saw in Q1. When we normalize for leap year, we see relatively stable US payments volume growth. Consumer spend across all segments from low to high spend has remained relatively stable. Our data does not indicate any meaningful behavior change across consumer segments. Moving to international markets, where total payments volume growth was up 11% in constant dollars. Payments volume growth rates were strong for the quarter in most major regions with Latin |
7,512 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | was up 11% in constant dollars. Payments volume growth rates were strong for the quarter in most major regions with Latin America, CEMEA, and Europe, ex-UK, each growing more than 19% in constant dollars. Normalized for leap year and weakness in Mainland China, total international payments volume growth was relatively stable to the first quarter. As a reminder, domestic volumes in Mainland China drive a very small amount of revenue and therefore the impact to our financial statements is not significant. Now to cross-border, which I'll speak to in constant dollars and excluding Intra-Europe transactions. Total cross-border volumes were up a healthy 16% in Q2 generally in line with our expectations. Cross-border card not present volume growth, excluding travel and adjusted for cryptocurrency purchases was in the mid-teens, stronger than expected. Cross-border travel volume was up 17% or 152% indexed to 2019. Consistent with our expectations for the year, we continue to see strong travel volume growth in and out of LAC, Europe, and CEMEA and out of the US ranging from 158% to 192% of 2019 levels. The US inbound travel volume has continued to recover within our expectations up several points from Q1 versus 2019 levels. Asia-Pacific travel volume continues to recover, but the pace has been slower than we anticipated. Travel volume into Asia indexed at 142% of 2019 levels for the quarter, up eight points from Q1, while travel volume out of Asia was up two points to 124% of 2019. We see the primary drivers being one, macroeconomic weakness in key markets like Australia and Mainland China two, weakness in some Asia-Pacific currencies, which is impacting consumer purchasing power, particularly for Japan and three, airline capacity that is still below 2019 levels, particularly the Mainland China and North American corridor. Altogether, we're pleased with our total cross-border volume growth with e-commerce growth generally offsetting the travel weakness in Asia and this is a great testament to the strength and |
7,513 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | with e-commerce growth generally offsetting the travel weakness in Asia and this is a great testament to the strength and diversification of our model. Now let's review our second quarter financial results starting with the revenue components. Both service revenue and data processing revenue grew generally in line with their underlying drivers, which resulted in their respective revenue yields remaining relatively consistent to the first quarter. Service revenue grew 7% year-over-year versus the 8% growth in Q1 constant dollar payments volume. Data processing revenue grew 12% versus the 11% process transaction growth. International transaction revenue was up 9% versus the 16% increase in constant dollar cross-border volume, excluding Intra-Europe, impacted by lapping strong currency volatility from last year. As volatility reached lows that we haven't seen in about four years, the revenue growth was lower than we expected. Other revenue grew 37%, primarily driven by strong consulting and marketing services revenue growth and to a lesser extent, pricing. Client incentives grew 12%, lower than we expected due to client performance and deal timing. Across our three growth engines, consumer payments growth was driven by relatively stable payments volume, process transactions and cross-border volume. New flows revenue improved as expected to 14% year-over-year growth in constant dollars. Visa Direct transactions improved to 31% year-over-year growth helped by growth in Latin America for interoperability among P2P apps. Commercial volumes rose 8% year-over-year in constant dollars. In Q2, value-added services revenue grew 23% in constant dollars to $2.1 billion, primarily driven by issuing and acceptance solutions and advisory services. GAAP operating expenses increased 29% driven by increases in the litigation provision and G&A expenses. Non-GAAP operating expenses grew 11% primarily due to increases in G&A and personnel expenses. FX and Pismo each represented an approximately half point headwind. Excluding net |
7,514 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | to increases in G&A and personnel expenses. FX and Pismo each represented an approximately half point headwind. Excluding net losses from our equity investments of $30 million, non-GAAP non-operating income was $189 million. Our GAAP tax rate was 15.4% and our non-GAAP tax rate was 16% due to the resolution of some non-US tax matters. GAAP EPS was $2.29 and non-GAAP EPS was $2.51, up 20% over last year, inclusive of an almost one point drag from exchange rates and an approximately half point drag from Pismo. In Q2, we bought back approximately 2.7 billion in stock and distributed over 1 billion in dividends to our stockholders. At the end of March, we had 23.6 billion remaining in our buyback authorization. Now, let's move to what we've seen so far in April through the 21st. US payments volume was up 4% with debit up 4% and credit up 5% year-over-year, down from March, primarily due to Easter timing. Process transactions grew 9% year-over-year. Constant dollar cross-border volume, excluding transactions within Europe grew 15% year-over-year. Travel-related cross-border volume, excluding Intra-Europe grew 15% year-over-year in constant dollars or 151% indexed to 2019. And cross-border card not present ex-travel grew 15% in constant dollars. Now on to our expectations. Remember that adjusted basis is defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentations for more detail. Let's start with the full year. We are reaffirming our prior year guidance for the full year for adjusted net revenue and operating expense growth in the low-double-digits and EPS growth in the low-teens. As for drivers, things are progressing generally as we expected, except for the trends in Asia that we discussed. Accordingly, we are making a small adjustment to our outlook for total payments volume growth to the high-single-digits from the low-double-digits. Total cross-border volume, excluding Intra-Europe is expected to continue to grow strongly in the |
7,515 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | from the low-double-digits. Total cross-border volume, excluding Intra-Europe is expected to continue to grow strongly in the mid-teens with the strength in e-commerce generally offsetting weakness in Asia travel. Remember that our drivers assume no recession or no further increase in Reg II impacts. Currency volatility remains low and we are assuming volatility in the third quarter continues at a similar rate to the second quarter and adjusts up slightly in the fourth quarter. Now on to the third quarter expectations. We expect adjusted net revenue growth in the low-double-digits, generally in line to the adjusted second quarter growth rate. Adjusted operating expenses in the third quarter are expected to grow in the low-teens, driven primarily by Olympic-related marketing expense due to the strong client engagement that Ryan referenced. Non-operating income is expected to be between $50 million and $60 million and the tax rate is expected to be between 19% and 19.5% in Q3 with the full year unchanged. This puts third-quarter adjusted EPS growth in the high end of low-double-digits. For the third quarter, Pismo is expected to have minimal benefit to net revenue growth and an approximately one point headwind to non-GAAP operating expense and an approximately half point drag to non-GAAP EPS growth. FX for the third quarter is expected to have an approximately one point drag to net revenue growth and approximately one and a half point benefit to non-GAAP operating expense growth and an approximately half point drag to non-GAAP EPS growth. In summary, we had another solid quarter in Q2 with relatively stable underlying drivers and strong financial results. We feel good about the momentum in our business as we head into the second half across consumer payments, new flows and value-added services. We remain thoughtful with our spending plans as we continue to balance between short and long-term considerations in the context of a changing environment. So now, Jennifer, let's do some Q&A. |
7,516 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Thanks, Chris. And with that, we're ready to take questions, Holly.
Operator: Thank you. [Operator Instructions] Our first caller is Sanjay Sakhrani with KBW. You may go ahead.
Sanjay Sakhrani: Thank you. Chris, a clarification question. You mentioned Easter was mainly affecting the quarter-to-date trends. Is it fair to assume that the growth rate would be commensurate with the last quarter if you adjust it for that? And then just on a related matter, did the tax refund timings have any impact later in the quarter or in the quarter or into the quarter-to-date trends? Thanks.
Chris Suh: Yeah. Thanks for the question. So April volumes, as I said on the call, through the first three weeks were lower than March -- the month of March. This was due to the timing of Easter, which again was in March this year and April of last year. And so once you factor that into March and April growth rates, the change between the months are -- the change in growth rate is not meaningful. As far as tax payments at this point, I don't really have an update. Largely they've been consistent at this point year-to-date.
Jennifer Como: Next question, Holly.
Operator: Our next caller is Timothy Chiodo with UBS. You may go ahead.
Timothy Chiodo: Great. Thank you for taking the question. There were some helpful comments around the e-commerce strength within cross-border offsetting some of the travel weakness. When we think about the components of overall cross-border, clearly, there's the traditional travel, so card present and card not present. And then there's the traditional e-commerce, right, so retail e-commerce. But there are other faster growing but smaller portions, whether it be the remittances or marketplace payouts or you gave the Thunes example earlier. I was wondering if you could maybe size the, in aggregate, how large some of those other maybe faster growing portions of cross-border have become as a part of the overall mix? |
7,517 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yeah, sure. Why don't I start? Yeah, we don't have specifics to break-out. As we talked about, the e-commerce business has been strong. It continues to grow above what we expected. The yields across our entire cross-border business are positive and accretive to Visa overall. And so we're happy with all flavors of cross-border, but I don't have a further breakout for you in terms of the pieces that you were asking about.
Jennifer Como: Next question, Holly.
Operator: Our next caller is Craig Maurer with FT Partners. You may go ahead .
Craig Maurer: Yeah, thanks for taking the question. I wanted to ask a question on US debit trends. April continued the trend of weakening that we've seen -- that we saw also in March and basically since February. I wanted to know to what degree your guidance for both third quarter and the year embeds continued weakening in US debit. It seems if we look at the restaurant data released by the likes of Darden that the lower-income portion of the US is significantly reducing spend in certain areas. So curious about commentary there. Thanks.
Chris Suh: Yeah. As we talked about on the call, we see quite stable -- relatively stable volumes in the US across credit and debit, normalizing for the things that I talked about. And so in addition, as I talked about Reg II, the impact remains stable as well. And so from our perspective, our data indicates stable volume growth in the US.
Jennifer Como: Next question, Holly.
Operator: Our next caller is Bryan Bergin with TD Cowen. You may go ahead.
Bryan Bergin: Hi. Good afternoon. Thank you. I wanted to ask on new flows, so a nice recovery there in growth. Can you give a comment on what areas were most pronounced in the underlying growth recovery relative to what you saw last quarter? |
7,518 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yeah. Let me talk about Q2 growth. The two pieces of information that we gave you in terms of Q2 growth. We saw commercial volume growth globally 8%, stable to Q1 and in fact, stable over the last several quarters. And we saw very strong growth in Visa direct transactions, growing 31% for the quarter. New flows revenue in total growing 14%, which was in line with our expectations that we shared with you at the start of the year. I think the recovery that you're referencing to was because Q1 growth was lower and that was really due to some lapping issues that were one-time and non-recurring, which we passed at this point.
Jennifer Como: Next question, Holly.
Operator: Our next caller is Will Nance with Goldman Sachs. You may go ahead.
Will Nance: Hey, guys. I appreciate you taking the question. A bit of a dual-part question on just some of the prior guidance commentary you made around first-half versus second-half dynamics and some of the drivers of acceleration over the course of the year. And I guess specifically, I guess, incentives, you talked about a step-down in the growth rate from first half to second half. Is that still your expectation despite that coming in a lot lower in the most recent quarter? And then for the similar question on the volume growth trends, I guess, I hear you on the Asia trends, but I guess overall, you had some kind of upbeat commentary on ticket sizes over the course of the year and kind of easing inflation in comps, it seems like gas prices might help that as well. So just any commentary on ticket sizes and specifically the negative ticket sizes you've seen in the US? Any commentary on kind of what's structural versus kind of more environmental there? Thanks. |
7,519 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yeah. Okay. Let me start first with incentives, the first part of your question. So, as you all have seen from quarter-to-quarter, incentive growth can vary based on a number of factors, client performance, deal timing, which is what caused half one to come in lower than anticipated. For our outlook for the second half of the year, our expectations remain largely unchanged. We still expect year-over-year growth to be lower in the second half than in the first half as we lap the higher incentives that we saw starting in the second half of last year. And we do expect the Q4 incentive growth rate will be the lowest growth quarter of the year. So expectations for half two are unchanged. To your second question on ATS, let me -- there's a lot of moving parts in here. And so maybe I'm just going to kind of go through it in detail and unpack bit by bit. Globally, Q2 ATS year-over-year growth was down slightly, which is consistent with the growth that we saw in Q1. Breaking that apart between the US and international. In the US, ticket size growth actually continued to improve from Q1 to Q2, still slightly negative, but the trend improved from Q1 to Q2. And looking ahead in the US, this is something that we've spoken to previously, we do continue to expect ATS will turn positive in the second half of this year as we lap the lower ticket sizes in the second half of last year. Internationally, outside of Asia-Pacific, let's set that aside for a second, we saw improvement in several regions, including the impact from higher inflation in several markets. And so overall, excluding Asia, we still expect ATS to turn positive in the second half based on the expected improvements in the US with the impact of Asia factored in, global ATS will be slightly negative and that was factored into the revised payment volume outlook that I gave for the full year.
Jennifer Como: Next question, Holly.
Operator: Our next caller is Moshe Katri with Wedbush Securities. You may go ahead. |
7,520 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question, Holly.
Operator: Our next caller is Moshe Katri with Wedbush Securities. You may go ahead.
Moshe Katri: Hey, thanks for taking my question. It seems that there was a pretty significant uptick sequentially in growth for value-added services. Is there anything to call out there? Thanks.
Ryan McInerney: I mean, I'll talk about the business just for a minute, Moshe. Thanks for the question and then, Chris, you can add any specific callouts. As I think I said in my prepared remarks, the business is really hitting its strides in a lot of different areas in terms of the product we're bringing to market, the success our sales teams are having around the world, we're really focused on three big areas of trying to drive growth. One is just deepening the penetration of products we have with existing clients. That's -- if you think about it is the most near-term opportunity that we have and we've got metrics, client-by-client all around the world, what are they using, what are they not using. We're arming our sales teams with that. We're building case studies on how we can help them and we're driving progress in terms of deepening the relationship we have with our existing clients. And then we're building new products that we're bringing to market. I mentioned a few of those in my prepared remarks today, both in the risk and fraud space as well as in the open banking space and then driving geographic expansion. I mentioned I think just one cybersource deal in my prepared remarks, but cybersource has been a great example of a platform where we've been having success growing in markets where we hadn't traditionally been as deep. AP is actually a positive example of that in the cybersource space. So those are a couple of call-outs, Moshe, in terms of kind of how we're just seeing the broader business.
Jennifer Como: Next question.
Operator: Our next caller is Cris Kennedy with William Blair. You may go ahead. |
7,521 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Our next caller is Cris Kennedy with William Blair. You may go ahead.
Cristopher Kennedy: Good afternoon. Thanks for taking the question. You talked about bringing Tink into the US. Can you talk about the open banking opportunity in the US relative to Europe? Thank you.
Chris Suh: Yeah. Thanks, Chris. I think Europe is the most developed open banking market in the world. We bought Tink two years ago believing that it was the best platform in Europe and I think that's proven true over the couple of years that we've had a chance to own it. On the client side, in Europe, we've been making great progress. I think I mentioned a couple in my prepared remarks, we've been -- we've been winning business and winning share with both fintechs as well as more traditional banks, merchants, and others, both in the payment side of things and in the account information side of things. I would describe the US market as less developed as Europe. And so I think it's an opportunity for us to take the learnings that we've had in the much more developed Europe market as well as the success we've had with our clients, the products, the services, the wins and the losses and bring all of that to the US market. So we're excited to do that. And as I mentioned, I think the US market is still at the very early stages of its development. So I think it's a good time for us to be a competitor in the market. And we're hopeful that over the coming quarters and years, we'll have a chance to share with you a lot of the success that we have in the US market.
Jennifer Como: Next question, please.
Operator: Our next caller is Dan Perlin with RBC Capital Markets. You may go ahead. |
7,522 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question, please.
Operator: Our next caller is Dan Perlin with RBC Capital Markets. You may go ahead.
Daniel Perlin: Thanks. Ryan, I just wanted to ask a question on the Visa Deep Authorization commentary and kind of that market there. I just want to make sure I understand, are you -- are you doing this as a means with which to like equalize kind of e-commerce across the market for authorization rates, so that like acquirers need to be partnered with you more specifically and therefore, they're not competing maybe shows individually on kind of author rates within e-commerce or is there something different within this platform? Thank you.
Ryan McInerney: Hey, Dan. Let me backup. I think this is a little different than what you were describing. What we found in the US e-commerce market is that it's the most -- on the one hand, it's the most developed e-commerce market on the planet. On the other hand, it's become the place of the most sophisticated fraud and attack vectors that we see anywhere in the world. And so what we were bringing -- we are bringing to market with Visa Deep Authorization is an e-commerce transaction risk scoring platform and capability that is specifically tailored and built for the unique sets of attack vectors that we're seeing in the US. So it's -- as I was mentioning in my prepared remarks, it's built on deep learning technology that's specifically tuned to some of the sequential and contextual view of accounts that we've had in the US market. And the whole goal is what we do with a lot of our fraud and authorization products. We want to -- we want to make it a better buyer and seller experience. We want to reduce fraud rates, increase authorization rates, increase shopping conversion for our merchant partners. And we think Visa Deep Authorization is going to be yet another tool that will help do that.
Jennifer Como: Next question, please.
Operator: Our next caller is Tien-Tsin Huang with JPMorgan. You may go ahead. |
7,523 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question, please.
Operator: Our next caller is Tien-Tsin Huang with JPMorgan. You may go ahead.
Tien-Tsin Huang: Thanks so much. It sounded like the Middle East deal activity is in a good place here. I believe Emirates is a takeaway for you. I'm just curious if there's something new going on there from a pipeline perspective. It sounds like maybe some investing. Is this the growth market we should be paying more attention to maybe? Thanks.
Chris Suh: Thanks, Tien-Tsin. I think what you're seeing is good execution from our sales team, doing what we do when we do it best, which is in with our clients, listening, learning, obsessing about what's important to them and then bringing them products and value propositions that are helping meet their needs and drive their strategies and really just kudos to our team on the ground there and the great work that they're doing.
Jennifer Como: Next question, please.
Operator: Our next caller is Trevor Williams with Jefferies. You may go ahead.
Trevor Williams: Great. Thanks a lot. This one is for Ryan. Just wanted to go back to the merchant settlement in the US, clearly you guys aren't directly impacted by lower interchange, but I'm just curious kind of what you're expecting the downstream impact to be on Visa, the relationships between you and your issuing banks. And if you think it in any way kind of changes the competitive dynamics at all within the US credit market? Thanks. |
7,524 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Thanks, Trevor. I think the good news on this front is it brings clarity and stability to the market. This is litigation that's been out there for the better part of 20 years or so. I think there's been a lot of great work that's been done to bring this to a resolution. Just to remind everyone what the main planks of the resolution are. It really is two different sets of things. One is it will reduce interchange for US -- for credit cards in the US market for both Visa and Mastercard and it will have no increases in interchange for the five years of the agreement. And then the second set of things are tools that give merchants more flexibility to how they manage payments significant -- specifically as it relates to surcharging and things like that. I think, overall, it's what I said, Trevor, which is clarity and stability that lets everybody who operates in the US market move on and move on continuing to grow the digitization of this great payments ecosystem that we've all collectively built in the United States.
Jennifer Como: Next question, please.
Operator: Our next question is from Harshita Rawat with Bernstein. You may go ahead.
Harshita Rawat: Good afternoon. So, Ryan, I want to follow up on value-added services, such an important part of your growth story. I know you've talked about the five types of services you offer and how your top 250 clients use almost 2x the number of services versus the rest of your client base. Can you give us some sense on how these penetration numbers have evolved over time? And finally as you kind of think about pricing for these services, to what extent it's a bundle pricing along with core versus kind of a separately priced service? Thank you. |
7,525 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Okay. You have a great memory. As we've said, our top 265 clients or so use on average about 22 of our value-added services. We don't talk about like how that's moved quarter-to-quarter, but the opportunity is enormous just when you think about the number of clients we have around the planet. And so as I was mentioning earlier kind of what we've done is we've armed our frontline teams with kind of client-by-client, what are they using, what are they not using, what are the opportunities to create value for the client by putting value-added services A, B, C or D to work for them and we're having great success and you see that in the numbers. In terms of the pricing, it's -- it's different pricing models for different products and different suites of solutions in different places around the world. We're always trying to come up with the right product pricing mix that's going to work best for our products in the market. And we have a portfolio of value-added services that span from issuing to acceptance to risk and identity to advisory into open banking and the competitive sets are deep and different in all of those markets. So we're bringing different pricing approaches to each and every market around the world to help meet the best that we can for our clients.
Jennifer Como: Next question, please.
Operator: Our next caller is Ramsey El-Assal with Barclays. You may go ahead.
Ramsey El-Assal: Hi. Thanks for taking my question. I wanted to ask about one of the consumer payment opportunities that Ryan called out, namely taking share from domestic card networks. How do you drive that? Is it just a question of getting banks to issue more of your cards or is it more on the acceptance or consumer side? What are the levers that you have to basically speed that up? |
7,526 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yeah. Thanks for the question. On the -- it's really the first of the things that you mentioned. Now, of course, we need to have great acceptance. We need to have great capabilities and all those types of things, which we do in every market we operate around the planet. So then it becomes sitting down with clients, helping them understand the value of, for example, a Visa debit card versus a card that runs primarily on domestic schemes. And then you get into e-commerce capabilities that Visa Debit is able to provide their clients that maybe they don't get the same type of capabilities from the domestic scheme. You get to cross-border travel opportunities that their customers would have if they were using a Visa card versus one of those domestic schemes that I mentioned. You also get into the risk and fraud prevention capabilities that I mentioned earlier and the ability to have more transactions approved and lower fraud rates, tokenization, I mean, all these kind of benefits, you've heard us talk about over and over again, those are what our teams can sit down with the clients and explain to them. Often the clients will do some pilots and some tests, they'll see the results, they'll see higher spend, they'll see higher client satisfaction. And then ultimately the decision to issue Visa cards to their clients becomes a very clear decision for them.
Jennifer Como: Next question, please.
Operator: Our next caller is Jamie Friedman with Susquehanna. You may go ahead.
James Friedman: Hi. I was wondering if you could share some color on how Prosa is doing so far and how you view the opportunity in Mexico as you start to press and productize into the Mexican market. Thank you. |
7,527 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yeah. Thanks, Jamie. We view the Mexican opportunity as a very significant one. And coincidentally, I was just down there a couple of weeks ago meeting with clients and meeting with the Prosa team as well. So as I think I explained on one of these calls, today, because we don't process transactions domestically in Mexico, we're not able to deliver a lot of the value-added services that I've mentioned over the course of this call to our clients. And so first and foremost, our clients are very excited about us having the opportunity to have a majority ownership stake in Prosa and then bring these world class capabilities that we've built to the Mexican market, the things I mentioned earlier, tokenization or the risk scoring algorithms that I mentioned or the e-commerce capabilities that I mentioned those types of things. Now Prosa itself is a great asset. It's been operating for 50 years in Mexico has deep processing experience, it has scale. They do more than 10 billion transactions annually. They have a great base of clients. So it's really the combination of both Prosa's experience and deep footprint in the Mexican market combined with our experience, our technology, our track record in bringing a lot of these services to market, the combination of those two things gives us a lot of confidence and our clients a lot of confidence that we can digitize the significant amount of cash and check and electronic payments that exist today in Mexico.
Jennifer Como: Next question, please.
Operator: Our next question is from Andrew Schmidt with Citi. You may go ahead.
Andrew Schmidt: Hey, Ryan. Hey, Chris. Thanks for having me on the call here. I wanted to go back to cross-border for a second. Obviously, a part of the back-half growth is the narrowing of the spread between cross-border revs and volumes. Maybe if you could talk a little about how, whether those assumptions have changed at all with FX volumes coming down or if there's other puts and takes we should consider there? Thanks a lot. |
7,528 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yeah, sure. Yeah, I spoke at length about volatility. So we had -- in Q2 we saw volatility -- currency volatility at multiyear lows. This one is hard to predict. In Q3, our assumption, what's embedded in the guidance for Q3 is that the currency volatility levels remain at this low level. We do have, again, embedded in our forecast. We do anticipate that Q4 improves slightly. That's generally in line with market expectations. But, yeah, that is our view of currency volatility. That said, the underlying health of our business as we enter the second half of the year, we feel really good about across consumer payments, across new flows, across value-added services. And so volatility is sort of the variable and we'll have to see how it comes in.
Jennifer Como: Next question, please.
Operator: Our next question comes from Jason Kupferberg with Bank of America. You may go ahead.
Jason Kupferberg: Thank you, guys. Can you talk about your second half expectations for new flows and VAS revenue growth as well as cross-border travel volume growth? Thanks. |
7,529 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Sure. Let me unpack that a little bit. From a -- as you heard us, we reaffirmed our prior year guide for the full year, adjusted net revenue growth, OpEx, EPS. And within that, I spoke about the fact that volatility is going to cause our currency volatility -- treasury revenues in international to be lower than we anticipated in Q3. But again full year unchanged within that. Our expectations for new flows in that are consistent with the ones that we shared at the beginning of the year, which we anticipated. For the full year, new flows will grow faster than consumer payments with weighted toward faster growth in the second half of the year. We're seeing that with the 14% growth in Q2. We anticipate continuing to see a good growth in the second half of the year. Value-added services has grown over 20% in each of the first two quarters. The momentum there is pretty evident. The second part of your question was, I think, around cross-border travel of volumes in total. So we did make a little bit of adjustment. You heard me talk about based on half-one trends. And so again, this is one with a couple of parts, so let's just go through it in detail. First of all, we feel really good, feel great about our first-half total cross-border performance, 16% growth in Q2, in line with our expectations, and within that, travel was 17% and e-commerce growth mid-teens better than expected. And so that unpacking travel a bit, we've seen most of our travel volume expectations play out actually as we planned at the beginning of the year, which continues to be strong and healthy in most regions LAC, Europe, CEMEA and all the ones that I talked about on the call, with Asia being the exception to that, which again continues to improve with the pace of recovery being slower than expected, offset again by strength in the e-commerce cross-border business, which is performing better than we expected.So we expect these trends to continue into the second half and thus, we've moderated our outlook for travel due to AP and upped |
7,530 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | we expect these trends to continue into the second half and thus, we've moderated our outlook for travel due to AP and upped our expectations on e-commerce. So putting that all together, overall, our view is that total cross-border volumes remain strong, growing in the mid-teens in the second half, which is frankly the better measure in relation to our financial performance given the strong yields across both travel and e-commerce. |
7,531 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question, please.
Operator: And our last question comes from Ken Suchoski with Autonomous Research. You may go ahead.
Kenneth Suchoski: Hey, good afternoon. Thanks for taking the question. A lot of my questions have been asked. I just want to ask about the service yields, though, because they came in a little bit lighter than we were expecting. So can you just talk about what drove that? It looks like the service yield declined year-over-year, but maybe there's some offset with client incentives also coming a little bit lower in the quarter. So any detail there would be helpful. Any thoughts on how to think about the year-over-year change in that yield going forward? Thanks.
Chris Suh: As we talked about both service revenue and data processing revenue grew generally in line with the underlying drivers, service revenue at 7% versus the 8% in constant dollar PV, Q1 constant dollar PV that's impacted by a number of smaller things, none of which I would call out as a single thing. Data processing revenue grew a little bit above processed transactions, 1.12 versus 11 and that was helped aided a little bit by pricing. From a yield perspective, I think the thing that's important is that our second quarter yields remained consistent with Q1 and consistent with the average over the last several quarters. And so we're seeing very stable yields across the business and we're pleased to see that. And even more broadly, our net revenue yield across the whole company remained quite stable.
Jennifer Como: Great. And last question please, Holly.
Operator: And our last question comes from Paul Golding with Macquarie Capital. You may go ahead.
Paul Golding: Thanks so much. Ryan, you were talking about the addressable opportunity of $20 trillion of which cash and check was half. I was wondering if you can give any thought to quantifying the ACH versus the domestic network conversion and where you think you are in that opportunity capture for each of those. Thanks. |
7,532 | V | 2 | 2,024 | 2024-04-23 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yeah, thanks. We're having great success in all three. I gave you examples. Some of our teams are ahead of others in different parts of the world and domestic schemes are more prevalent in some parts of the world than others like I mentioned Europe as an example. But the opportunity is enormous in all three of these areas and we've been having really good success in all three of the areas.
Jennifer Como: And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or email our Investor Relations team. Thanks again and have a great day.
Operator: And this concludes today's conference. Thank you for participating. You may disconnect at this time and have a great rest of your day. |
7,533 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Operator: Welcome to Visa's Fiscal First Quarter 2024 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Ms. Jennifer Como, Senior Vice-President and Global Head of Investor Relations. Ms. Como, you may begin.
Jennifer Como: Good afternoon, everyone, and welcome to Visa's Fiscal First Quarter 2024 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance and our actual results could differ materially as the results of many factors. Additional information concerning those factors is available in our most recent Annual Report on Form 10-K and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. For non-GAAP financial information disclosed in this call, the related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan. |
7,534 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Hi, everyone. Good afternoon and thank you for joining us. We are off to a solid start in 2024. Consumer spending remained resilient with first-quarter year-over-year payments volume growth at 8%. U.S. payments volume grew 5% year-over-year. International payments volume grew 11%. Cross-border volume excluding intra-Europe rose 16% year-over-year in constant dollars with cross-border travel at 142% of 2019 levels, up from 139% in the fourth quarter. Processed transactions rose 9%. Our net revenues increased 9% with GAAP EPS up 20% and non-GAAP EPS up 11%. As I reflect on the execution of our strategy this quarter across consumer payments, new flows and value-added services, I wanted to highlight a few key themes. One, we remain obsessed about serving our customers including traditional bank partners, neobanks, fintechs, wallets, sellers, acquirers and everyone else. Our focus on clients has enabled us to deepen our relationships with partners across all three pillars of our strategy. Two, we continue to seek new partnerships, new use cases and new verticals to drive our business forward with a particular emphasis on cross-border. Three, we have gone to market with innovative solutions across our network of networks, seeking to add value for all transactions, no matter the network. And four, we are always looking for new and innovative ways to amplify our brand in service of our partners. With those themes in mind, let me provide some more details on the quarter. Let's start with consumer payments. We saw continued growth in credentials, acceptance and engagement. Credentials grew 6% and we now have more than 8.7 billion network tokens, up 55%. Acceptance locations grew 17%. And let me highlight two recent examples of where we have expanded acceptance. The first was in Brazil with Caixa for cash conversion at their over 10,000 lottery branches. They are now accepting Visa credit and debit cards to pay for utilities, tax collection, lotteries and voucher payments which are called boletos. Another |
7,535 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | credit and debit cards to pay for utilities, tax collection, lotteries and voucher payments which are called boletos. Another example was in Asia-Pacific where we signed an agreement with Bcash, the largest mobile financial services player in Bangladesh. Already a client with Visa Direct, they now have enabled Visa's 15 million plus cardholders in the country to use their in-app QR code to pay at more than 550,000 Bcash merchants. These examples demonstrate our local approach to expanding our global acceptance footprint. Tap to pay grew five percentage points from last year to 77% of face-to-face transactions globally, excluding the U.S. In the U.S., we reached 45% penetration. One highlight from the first-quarter is that Lowe's has enabled tap to pay acceptance. We believe the tapping provides the best buyer and seller experience in the face-to-face environment and we've seen that play-out in the results. In a recent Visa study in the U.S., we saw on average two more transactions a month and spend lift of $70 a month for those who tap with a Visa debit card versus those who don't tap. Now on to some noteworthy updates from the quarter, which demonstrate our ability to deepen and expand partnerships as well as create new ones. In Europe, we renewed our agreement with isbank, the largest private bank in Turkey with 33 million cards for its consumer and commercial credit and debit portfolios. As part of that renewal, they will be issuing the first Olympic and Paralympic Games credit card in Europe outside of France, leveraging our sponsorship. In Poland, we signed a new issuing agreement with PKO Bank Polski, the largest issuer and acquirer in Poland and Central Eastern Europe for consumer and commercial debit. In Greece, we expanded our partnership with Piraeus Bank, the largest bank in the country to become their exclusive payment network across their consumer and commercial credit and debit portfolios. These are all fantastic examples of the attractive position and strong pipeline in Continental Europe I spoke |
7,536 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | debit portfolios. These are all fantastic examples of the attractive position and strong pipeline in Continental Europe I spoke about last quarter. In Japan, we expanded our credit issuance partnership with e-Pass, one of the fastest-growing issuers in the country, affiliated with department store Marui. They will use Visa Managed Services, which is a part of our advisory solutions where we embed Visa employees within a client organization to help execute against key initiatives. In Korea, we renewed and expanded our partnership with Shinhan Card, the largest issuer in the country for a consumer and commercial credit and debit. Shinhan has also committed to utilizing a suite of Visa's value-added services, including consulting and marketing to advance their business. In Mexico, we renewed our agreement with BBVA across consumer and commercial credit and debit along with value-added services, including risk, advisory and data tools. And last, in the U.S., we extended our agreement with Bank of America for multiple value-added services, including visas loyalty platform service, CardinalCommerce 3D secure service, Verifi Order Insight digital service and DPS debit processing. We also continue to be a partner of choice for fintechs around the world. First, in the U.S., we renewed with leading fintech chime, further debit and credit builder secured card portfolios as well as for Visa Direct. In Latin-America, we renewed our debit and credit contracts with Rappi, one of the largest fintech and merchant clients in the region with more than 30 million customers. They will also utilize numerous value-added services, including CyberSource and Decision Manager. And finally, we are excited about a new global partnership with HSBC for their fintech initiative Zing. Starting with the U.K., we are supporting the ambition to launch this multi-currency proposition in more than 30 markets. Visa's capabilities through Tink, currency cloud and our consumer payment solutions offer a powerful customer proposition and rapid deployment |
7,537 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | through Tink, currency cloud and our consumer payment solutions offer a powerful customer proposition and rapid deployment for Zing and HSBC. Through these renewals and new partnerships, you can see how we are focused on building a deep relationship across all the capabilities Visa offers. Now moving to new flows. We have updated our sizing of the new flows opportunity using the latest market data available. Excluding Russia and China, we see $200 trillion of opportunity annually across B2B, B2C, P2P and G2C, certainly an enormous number. We are working with our clients to deliver Visa's commercial and money movement solutions to help digitize these flows on our network of networks. Starting with Visa Direct. Total transactions this quarter grew 20% to $2.2 billion. And on the P2P cross-border front, transactions grew more than 65% year-over-year. In terms of client highlights for this quarter, we have been developing partnerships for new use cases in verticals and we are continuing to drive cross-border volumes. First, in new use cases, in addition to our existing P2P partnership in the U.S., we have expanded our Visa Direct relationship with Meta, launching the ability for content creators on Meta's family of apps to cash out their earnings to a debit card. This launch, now live in the U.S., U.K., France and Italy, allows for creators to receive their payout quickly and safely. Second, on cross-border volumes, we have continued to make progress in enabling global money movement across our 8.5 billion endpoints in nearly 200 countries and territories. Western Union is a great example. We just signed a long-term global partnership agreement with Western Union covering issuance, Visa Direct and other services across 40 countries in five regions. This long-term collaboration will bring product innovations and digital-first customer experiences to enhance cross-border money movement. We also expanded our relationship with Remitly to enable customers from 30 countries to send cross-border payments to eligible debit |
7,538 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | expanded our relationship with Remitly to enable customers from 30 countries to send cross-border payments to eligible debit cards and bank accounts in over 100 countries globally. In Canada, we recently announced our agreement with CIBC and Simplii to provide millions of clients the ability to send money to digital wallets in key remittance destinations including the Philippines, China and Bangladesh. On to the commercial side, total payments volume grew 8% in constant dollars. And throughout the quarter, we continued to focus on new verticals. Let me highlight a few specific areas. First, in the cross-border travel vertical, we recently expanded our agreement with Singapore based B2B platform Nium. Their virtual card B2B travel program will expand from the U.S. and Europe into Australia, Singapore, Hong-Kong and Japan. Also in B2B travel, we signed a new virtual card agreement with Worldline, a leading global payment provider for travel intermediaries to pay their suppliers more quickly. In the contractor vertical, we recently signed an agreement with United Overseas Bank and Doxa, a Singapore fintech for contractors. In partnership with Visa, the Doxa platform has further been enhanced to provide embedded financing capabilities. Subcontractors will be given the option to be paid for their services through UOB virtual cards. And also with UOB, we renewed and expanded our commercial relationship across commercial debit and credit including the enablement of payment flows for the Singapore government. Let me move on to value-added services. Our network of networks strategy is also playing a key role in value-added services. As a reminder, this has three components. One, moving money to all end-points and to all form factors. Two, using all available networks and being a single connection point for our partners. And three, providing our value-added services on all transactions, no matter the network. We have continued to develop and expand our value-added services as part of this strategy. Let me cover three |
7,539 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | the network. We have continued to develop and expand our value-added services as part of this strategy. Let me cover three recent examples. Processing capabilities for RTP networks, Pismo and Prosa. Last quarter, I noted that Visa is becoming a certified service provider for FedNow, enabling financial institutions to receive funds through the FedNow service. We have now enabled the ability to also send funds. The second example is Pismo, which we just closed last week. As I talk to clients around the world, particularly issuing clients, there are two priorities that are increasingly on the minds of CEOs. The first is for many of our issuing clients, they've either recently embarked on or they're considering embarking on a transformation of their tech-stack from their legacy infrastructure to cloud-native API-based tech stacks. The second is that many clients, whether they'd be traditional issuers or fintechs, are increasingly looking to rapidly expand their issuance to new regions and countries, especially the more developing markets around the world. Our clients are looking to Visa to help them with both of these priorities. And with Pismo, we will be able to deliver to our clients the best cloud-native issuer processor in core banking platform in the world. Pismo offers global core banking and multi-product issuer processing covering credit, debit and commercial with connectivity to local payment networks such as Pix. Our goal is for Pismo to be the platform of choice for our issuing partners around the world, enabling them to accelerate their global expansion and transition to cloud-native platforms. And the third example of our network of networks is our announcement to acquire a majority interest in Prosa, a payments processor in Mexico. A couple things about the Mexican market. One, cash and check represent more than 50% of personal consumption expenditures. And two, today Visa has limited ability to process domestically. We believe we can bring enhanced technology infrastructure and lay the groundwork to |
7,540 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | limited ability to process domestically. We believe we can bring enhanced technology infrastructure and lay the groundwork to develop new innovative ways for consumers, small businesses and local issuers and acquirers in Mexico to pay and be paid. This includes improving safety, security and reliability and providing better experiences through our value-added services such as tokenization, risk products and more. We can also bring our innovation and commitment to continued investment for both face-to-face and online transactions. Together, these efforts will help further digitize payments in the country. The investment is subject to regulatory review and we hope to close in the second-half of calendar year 2024. And finally, I want to highlight the opportunities to drive further growth in value-added services via the development of new partnerships. These enable us to enhance our overall offering and distribution reach. Yesterday, we announced an agreement with digital workflow leader ServiceNow to build solutions and distribute Visa's products and solutions to joint customers. To start, ServiceNow will launch in end-to-end disputes management solution for issuers with plans to expand to additional segments and products over-time. This partnership showcases the demand for our value-added services and provides a compelling distribution channel to reach more customers around the globe. So, across consumer payments, new flows and value-added services, you can see the enormous opportunity as well as Visa strong relationships, commitments to our clients and innovation in new ways to pay and be paid. What helps to amplify all of these efforts is our brand. We recently renewed our long-standing partnership with FIFA, creating a powerful opportunity to drive business for both Visa and our clients, improve brand lift and maximize global reach. Not to mention, providing an opportunity to showcase and implement Visa's innovative payment technology. We're also launching our first new global sports sponsorship in more than |
7,541 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | and implement Visa's innovative payment technology. We're also launching our first new global sports sponsorship in more than 15 years with the Red Bull Formula One teams. The partnership aligns our brand with two teams within Formula One which is one of the fastest-growing sports on the planet, providing another opportunity to drive business for our clients. As we look ahead this year, we're excited to be activating our brand with our clients across all of these partnerships as well as the Olympic and Paralympic games in Paris. Before I hand it over to Chris, I wanted to mention that we hold our Annual Meeting on Tuesday. All of the proposals that the Board recommended past including the exchange offer program proposal. As such, we will be moving promptly to file an S-4 with the SEC relating to the initial exchange offer. I also wanted to give a special thanks to my colleague, partner and friend, Alf Kelly, as Tuesday he officially retired as Executive Chairman. Alf, on behalf of the entire Visa family, thank you for your exceptional leadership. You led this business to incredible heights, while also driving innovation, deepening our client relationships and strengthening our culture in so many ways. Your impact on Visa will be visible for generations. In closing, in the first-quarter, Visa once again demonstrated the effective execution of our strategy across the globe. While uncertainty seems to be the norm, Visa has the experience and discipline to manage through the challenging environments and I remain optimistic and confident about our future. Now over to Chris. |
7,542 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Thanks, Ryan. Good afternoon, everyone. As Ryan said, Q1 was a solid quarter with relative stable-growth in overall payments volume and processed transactions and strong growth in cross-border volume. Looking at our drivers, in constant dollars, global payments volume was up 8% year-over-year and processed transactions grew 9% year-over-year. Cross-border volume growth excluding intra-Europe was up 16% year-over-year in constant dollars. Fiscal first-quarter net revenues were up 9% in nominal and constant dollars, which was on the high-end of our expectations, primarily due to lower-than-expected incentives and less FX drag. GAAP EPS was up 20% and non-GAAP EPS was up 11% in nominal and 10% in constant dollars. Now on to the details, starting with the U.S. U.S. payment volumes grew 5% year-over-year, credit grew 6% and debit grew 5%. Card-present spend grew 3% and card not present volume grew 7%. As we look at the monthly total U.S. payments volume growth rates throughout the quarter, we saw low in October and a peak in November with December in between. Putting it all together, the step-down of about 80 basis-points in total US payments volume growth from Q4 to Q1 was primarily due to a less favorable mix of weekends and weekdays compared to last year and a combination of a few small items, including a softer October and modest impact from Reg II. Consumer spend across all segments from low to high spend has remained relatively stable. Our data does not indicate any meaningful behavior change across consumer segments. Moving to holiday spend, which is the period from November 1 to December 31. In the US, consumer holiday spend growth was in the mid-single-digits on a year-over-year basis. Consumer retail spending growth was similar to last year. However, retail spending growth on key shopping days from Thanksgiving to Cyber Monday was much stronger. E-commerce increased its share of retail spending versus last year. Moving to international markets, where total payments volume growth was up 11% in |
7,543 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | share of retail spending versus last year. Moving to international markets, where total payments volume growth was up 11% in constant dollars, stable to Q4. Payments' volume growth rates were strong for the quarter in most major regions of Latin-America, CEMEA and Europe ex-U.K. each growing about 20% in constant dollars. Now on to cross-border, which I'll speak to in constant dollars and excluding intra-Europe transactions. Total cross-border volume was up 16% year-over-year. Cross-border card-not-present volume growth excluding travel grew slightly faster-than-expected in the low-teens adjusted for cryptocurrency purchases. Cross-border travel-related spend grew 19% year-over-year. The cross-border travel volume index to 2019 increased from 139% in Q4 to 142% in Q1. Travel volume into Asia indexed at 132% of 2019 levels for the quarter, up three points from Q4, while travel volume out of Asia was up four points to 118%. This was lower than last quarter's expansion, primarily due to relative weakness in Australia and Japan. Travel in and out of Mainland China continued to improve, but both remain below 2019 levels. U.S. travel inbound continued to improve several points from Q4 versus 2019 levels. And we continued to see healthy travel volumes in and out of LAC, Europe and CEMEA and out-of-the US, ranging from 145% to 170% of 2019 levels. Now let's review our first-quarter financial results, starting with the revenue components. First, as any new pricing usually goes into effect in April and October, this quarter, each of our revenue components benefited as a result and the growth rates were either further enhanced or offset by the additional factors as follows. Service revenues grew 11% year-over-year versus the 9% growth in Q4 constant dollar payments volume with some additional help from card benefits. Data processing revenues grew 14% versus 9% processed transaction growth, helped by business mix and value-added services. International transaction revenues were up 8% versus the 16% increase in constant |
7,544 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | by business mix and value-added services. International transaction revenues were up 8% versus the 16% increase in constant dollar cross-border volume, excluding intra-Europe, impacted by lapping strong currency volatility from last year. Other revenues grew 18% with strong consulting revenue growth, but impacted by lapping 31% growth from 2023, primarily from FIFA related value-added services revenue. Client incentives grew 20%, but ended-up lower-than-expected due to client performance and deal timing. Across our three growth engines, consumer payments growth was driven by relative stability in payments volume growth and processed transactions as well as strong growth in cross-border volume. This quarter, in new flows, the underlying drivers remained relatively stable. Commercial volumes rose 8% year-over-year in constant dollars and Visa Direct transactions grew 20%. Total new flows revenue grew in the low-single-digits year-over-year in constant dollars due to several one-time items and business mix impact. As you know, for any given period, there can be puts and takes, but most importantly drivers are stable and we continue to expect full-year 2024 new flows revenue to grow faster than consumer payments revenue. In Q1, value-added services revenue grew 20% in constant dollars to $2.1 billion with strength and issuing and acceptance solutions. GAAP operating expenses declined 6%. The decrease in expenses was driven by a decrease in the litigation provision, somewhat offset by an increase in personnel expenses. Non-GAAP operating expenses grew 7%, primarily due to an increase in personnel expenses. Excluding net gains from our equity investments of $4 million, non-GAAP non-operating income was $84 million. Our GAAP tax-rate was 19.1% and our non-GAAP was 19%, helped by larger-than-expected tax benefits. GAAP EPS was $2.39; non-GAAP EPS was $2.41, up 11% over last year, inclusive of an approximately 0.5 point benefit from exchange rates. In Q1, we bought back approximately $3.4 billion in stock and distributed |
7,545 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | approximately 0.5 point benefit from exchange rates. In Q1, we bought back approximately $3.4 billion in stock and distributed over $1 billion in dividends to our stockholders. At the end of December, we had $26.4 billion remaining in our buyback authorization. Now let's move to what we've seen so far in January through to the 21st. U.S. payment volume was up 4% with debit up 3% and credit up 4% year-over-year, down from December, largely due to severe weather conditions in parts of the U.S. Process transactions grew 8% year-over-year. Constant dollar cross-border volume, excluding transactions within Europe, grew 16% year-over-year. Travel-related cross-border volume, excluding intra-Europe, grew 16% year-over-year or 146% indexed to 2019; and cross-border card-not-present ex travel grew 16%. Now on to our expectations. Remember that adjusted basis is defined as non-GAAP results in constant dollar and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail. For the full year, we have no material changes to our prior outlook for drivers, adjusted net revenues or EPS growth. Remember that our drivers assume no recession or a further increase in Reg II impacts. Pismo is expected to have minimal benefit to full year net revenue growth and an approximately 0.5 point headwind to non-GAAP operating expense and EPS growth. FX is expected to have an approximately 0.5 point drag to net revenues growth and approximately 1 point benefit to non-GAAP operating expense growth and a minimal drag to non-GAAP EPS growth. Non-GAAP non-operating income is expected to be between $350 million and $400 million, with nearly half in Q2 due to the resolution of some non-U.S. tax matters. Putting it all together, adjusted net revenues growth is unchanged at low-double-digits, adjusted operating expense growth is updated to low double digits, and adjusted EPS growth is unchanged at low-teens. For the second quarter, similar to the full-year, Pismo is expected to have a minimal benefit |
7,546 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | growth is unchanged at low-teens. For the second quarter, similar to the full-year, Pismo is expected to have a minimal benefit to net revenues growth and an approximately 0.5 point headwind to non-GAAP operating expense and EPS growth. FX is expected to have minimal drag to net revenues growth and an approximately 0.5 point benefit to non-GAAP operating expense growth and minimal benefit to non-GAAP EPS growth. We expect adjusted net revenues growth in the upper mid to high-single-digits and adjusted operating expense growth in the low-double-digits, north of 10%. Nonoperating income is expected to be highest in Q2 due to the resolution of some tax matters, as I noted earlier. As such, the tax rate is expected to be between 16% and 16.5% in Q2 with the full-year unchanged. This puts second quarter adjusted EPS growth in the high-teens. In summary, we're off to a solid start in the first quarter. The fundamental drivers remain relatively stable, and with no material changes to our full year guidance, we remain focused on the execution of our growth strategy for the rest of 2024. As always, if the environment changes and there's an event that impacts our business, we will, of course, adjust our spending plans. We remain thoughtful on balancing between short- and long-term considerations. And now Jennifer, let's go to Q&A. |
7,547 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Thanks, Chris, and with that, we're ready to take questions.
Operator: [Operator Instructions] Our first question comes from Tien-Tsin Huang with JPMorgan. Your line is open.
Tien-Tsin Huang: Hey, thanks so much. Just want a clarification and a bigger question here. Just on the clarification, the new flows up low single digits versus mid-teens last quarter. How did that come in versus plan? Were there some onetime issues? Because it sounds like the other metrics were in line. And then my question was just on U.S. volume running in the mid-single-digits here, it's pretty tight to PCE. I know there are a lot of factors like gas and e-com and Reg II, but just can you clarify your view on U.S. volume here in relation to PCE growth in the short to mid-term? Thank you.
Ryan McInerney: Tien-Tsin, it's Ryan. Why don't I start on the second part of your question and then Chris can answer the first part and add or correct any on the second part. I think let's back way up for a second in the U.S. U.S. remains a significant opportunity for us in consumer payments. I mean, there's still a lot of cash, a lot of checks, a lot of ACH. We're having great work with fintechs and banks to bring more people in on the carded front. We're doing work to expand acceptance, the service industry, whether it's plumbers or contractors, charities, vending, parking, tap to pay. I mean, we continue to be very, very excited about the U.S. market. I think as you said, and Chris can add some detail, in the quarter, there's some Visa-specific factors on the growth rate in the U.S. as it relates to PCE, like you were talking about. But as we look forward, it continues to be a big opportunity for us. We continue to be excited about it. Chris, do you want to take the first part of Tien-Tsin's question and add anything on the second? |
7,548 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Sure. Yes, in new flows, so the underlying fundamentals of our commercial business remain sound. Commercial payment volumes grew 8% and Visa Direct transactions grew 20%. And importantly, the new flows business continues to be a growth engine for Visa. We do expect the full-year revenue growth to exceed consumer revenue growth. Now specific to your question around the first quarter, it was impacted by a couple of factors: first, the mix of business, with cross-border volume growth slowing in Q1 as travel continued to normalize; and second, the growth was also impacted by a few onetime items that happened to be larger than we might typically see in any given quarter. But all in all, we feel great about the business and the long-term growth trajectory ahead.
Tien-Tsin Huang: Cool, that's helpful. Thank you both.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Dan Perlin with RBC Capital Markets. Your line is open.
Dan Perlin: Thanks. I just wanted to ask a question around the new partnerships within value-added services. Ryan, it sounds like, as part of the priorities, you want to get value-added services on all the networks. And I think you were alluding to the fact that this is going to be maybe a bigger shared responsibility with this partnership growth, and ServiceNow is obviously a great example. But I'm just trying to reconcile kind of how we should be thinking about Visa maybe opening up those opportunities with these two partnerships and what that may do at some point to the financial picture of the company? Thanks. |
7,549 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yes. Again, if I back up before I answer to the specific question about ServiceNow and partners, we're very excited about the progress that we've made on our value-added services strategy. We're excited about the momentum that we're seeing kind of in the market. We're excited to see our sales efforts really driving success and performance across issuing, acceptance, risk and identity, advisory and open banking. And it's exactly as you were saying with partners like ServiceNow. What we're finding is we can have great efforts selling to our partners directly around the world. But we're also getting a lot of demand from various different platforms that already have relationship with thousands or tens of thousands or, in some cases, more customers in any one country or region. And they're very excited to sell through our value-added services as a way of differentiating their platform and deepening relationships with their users and their customers. And so in the example of ServiceNow, they had been talking to their bank clients, and their bank clients had asked for and been interested in some of the dispute services that we provide. And so we're going to market first, as I said in my prepared remarks, with our dispute services via ServiceNow. We've got a pipeline of other products and services that we're working with them on. And we're deep in discussions with other platforms around the world about bringing our money movement solutions and our value-added services solutions as a way to differentiate their platform and add value to their users.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Craig Maurer with FT Partners. Your line is open.
Jennifer Como: Craig, are you there?
Craig Maurer: Yes. Sorry, can you hear me?
Jennifer Como: We sure can. |
7,550 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Craig, are you there?
Craig Maurer: Yes. Sorry, can you hear me?
Jennifer Como: We sure can.
Craig Maurer: Okay. Great. I wanted to ask if you can be a little bit more detailed in the comments around Reg II and how you're seeing volume move perhaps off your network. And second, if you can just add some detail around the onetime items that impacted Visa in the U.S. in the quarter, I'd appreciate it.
Ryan McInerney: So let me talk a little bit about the business aspect of Reg II, and then Chris, you can hit both of those specific questions, the Reg II and the onetime items. I think it's important at this point to just observe. We're 6 months in now since Reg II in the U.S. And we've had a chance to really engage with our clients and partners on the merchant side of what we do. And we're having really good discussions, really good dialogues. It's been a great opportunity for us to highlight our products, our services and especially the various different things that differentiate a Visa debit transaction from other alternatives. And to be honest, we're getting the chance to have conversations at more senior levels in the organization about the details of our products than we've ever had before, which is great. And so far, we're having great success. The sales conversations have been positive. The results client by client that we're finding as we're able to talk to them about the features and benefits of Visa Direct are great so far and feel really good about our results 6 months into this so far. So Chris, you want to hit the two pieces specifically? |
7,551 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yes, will do. So yes, on Reg II, so as we indicated, we did see some modest impact in the U.S. Payment volumes growth in the U.S. was down about 80 basis points from Q4 to Q1. And that slowdown was primarily due to a couple of things. One is the mix of spend days, but also there were a few smaller things, a softer October and the modest impact from Reg II that we're talking about. So a couple of things. It's important to note, we've actually not seen any meaningful changes to volumes being routed away since October. So all in all, the impact is modest, really hasn't changed over the past quarter, and that's actually what we have assumed and we shared for the rest of the year. Now to your second part of your question about one-time items, I talked a little bit about the things in the U.S., Reg II and the slow October. The other place where I talked about onetime items was in the new flows business. As I said, the revenue growth was impacted by a couple of things. One, I talked about the cross-border normalization as on travel. And then secondly, there were these one-time items, and I'll give you an example of one. In the normal course of our business, we regularly true up or true down our incentive and rebates with our clients based on their reported metrics. And in the first quarter, the net impact of these adjustments ended up being larger than we might typically see in a quarter. But all in all, it's not something that gives us concern. The underlying business fundamentals remain healthy. It doesn't change our expectations for full year growth for new flows revenue, which will continue to outpace consumer revenue.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Sanjay Sakhrani with KBW. Your line is open. |
7,552 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Sanjay Sakhrani with KBW. Your line is open.
Sanjay Sakhrani: Thanks, good evening. I guess just a question on the slower volumes year-to-date, on the severe weather. I'm just curious if there's been any softness beyond that. And then maybe, do you expect that spending to sort of reaccelerate because the weather has gotten better? Or maybe you can just speak about that a little bit.
Chris Suh: Yes. Thanks, Sanjay. Yes, we did see that growth slowdown in the first week of January. And we've looked really closely at it, and it's directly correlated to the extreme cold weather that's hit in many parts of the U.S. I'll give you a few examples. For anyone in Kansas City, they know this. We went from 45 degrees in the last week of December to negative 10 in the first few weeks of January. And so no one was out and about, and we saw growth in Kansas City go from mid-single digits growing to declining mid-single digits. To take another example, in San Diego, those that are lucky enough to be there, 60 degrees, and we've seen stable mid-single-digit volume growth into January. And maybe a third example that highlights the swings that we saw, in Dallas, it was nearly 60 in the first two weeks of January and then dropped to below 20 degrees in the third week, and we saw the exact same pattern following with our card-present volumes in that third week. And so to the second part of your question, the good news is we've seen these type of weather-related patterns before. They tend to be short blips, and over the course of the quarter, tend to get smoothed back out.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Ken Suchoski with Autonomous Research. Your line is open. |
7,553 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Operator: Our next question comes from Ken Suchoski with Autonomous Research. Your line is open.
Ken Suchoski: Hi, good afternoon. Thanks for taking the question. I wanted to ask about the EPS growth outlook. It looks like you're guiding to high-teens EPS growth in fiscal 2Q, which I think implies a mid-single-digit decline in the share count quarter-over-quarter. But I'm just trying to figure out why that doesn't flow through to the full year EPS growth figure where you're guiding it to low-teens growth. So if you can help us reconcile that, that would be great. Maybe there's some tax, certain OpEx impacts in the back half of the year that we're not accounting for.
Chris Suh: Yes. It is specific to Q2. I think I mentioned on the call, there were some tax matters that were resolved outside of the U.S. that brought our tax rate down in Q2 into the 16% range. That same matter also had some benefit that hit the NOI line, which also then helped the high-teens growth rate on EPS in Q2 specifically. For the full-year, it doesn't change the tax rate. It doesn't change our prior outlook for EPS growth.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Harshita Rawat with Bernstein. Your line is open.
Harshita Rawat: Good afternoon. I want to follow-up on services. Given how increasingly important these are to your revenue growth, can you give us some insights, quantification on the composition of your value-added services, DPS, CyberSource, risk, et cetera? And maybe also expand about the growth drivers here with regards to attach rates, processing penetration, geo expansion. They're growing almost 2 times faster than your card volumes' overall services, so we are trying to just have a clear guidance here. |
7,554 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yes, thank you. As I was saying earlier, I think the strategy is really firing on all cylinders. Our execution is firing on all cylinders. The client demand remains strong. The TAMs are large, as you were saying. Last year, we generated about $7 billion in revenue in the value-added services business. I think we said in the quarter, it was a little more than $2 billion and up 20% in constant dollars. Those are great results. To get in a little bit into the details of your question, I mean, we run these businesses segment by segment. In issuing solutions, we're having great success with our network products around the world. DPS continues to have great success with clients in the U.S. I mentioned in my prepared remarks that we had renewed with Bank of America. That's one of our, as you might expect, largest clients in DPS, a fantastic partner, as well as a number of the other value-added services I mentioned. In the acceptance solutions business, CyberSource continues to have great success around the world, both with their omnichannel services as well as some of the value-added services they have, like token management service and the like. Our disputes business beyond just what I mentioned earlier around ServiceNow is having great success. Verifi is really firing on all cylinders, especially as it expands outside the U.S. Our risk and identity solutions business is really proving to be very resilient and high growth, both our Advanced Authorization Platform, Visa Risk Manager, Visa Secure, all the various different products that we've been bringing to market. And then our advisory services continue to do well. I mentioned in a few of the client wins in my prepared remarks, the success we've had with our managed services platforms where we're embedding teams of Visa employees in our clients, working shoulder to shoulder with our client partners day in and day out, week in and week out, month in and month out, helping them drive their business forward. I mean, that drives revenue growth. That |
7,555 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | in and week out, month in and month out, helping them drive their business forward. I mean, that drives revenue growth. That diversifies our revenue. But more importantly than any of that, that embeds us in the building with our clients, helping them grow their businesses, makes our core business even more sticky. So yes, it's execution, it's product pipeline, it's delivery, and we feel really good about the results. Thanks for the question. |
7,556 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Bryan Keane with Deutsche Bank. Your line is open.
Bryan Keane: Hi, guys. Just wanted to get a couple of clarifications. I think last quarter, Chris, you talked about growth would be at a low point in the first quarter, and then you would see that trough accelerate going forward. Just a nuance of the guide is mid to high single digits, so just trying to make sure if there was anything else new to report on Q2 versus Q1 being the trough. And then secondly, just a slightly higher operating expense in constant currency from, I think, it was high single to low double, just the low double now. Was there anything to factor in for that?
Chris Suh: Yes. Thanks, Bryan. Yes, so just backing up to your point, going into Q1, you outlined the guidance that I gave. We set an expectation at that time, similar language, high to mid-single digits to high -- sorry, mid- to high single digits, and we did come in at the high end of that range, which was, again, largely benefiting from timing of incentive performance. We have a similar expectation in terms of the range of growth in Q2, but many of the variables that I talked about in terms of the half one versus half two a quarter ago, which was lapping high volatility, lapping high cross-border performance from a year ago and lapping lower incentive growth from a year ago, those, we continue to believe, hold true. And we do anticipate that growth will accelerate into the second half of the year. In terms of your question on OpEx, yes, the changes that you picked up in terms of the full year guide primarily have to do with two things. One is we're now including the impact of the acquisition of Pismo into the guide for OpEx, and there's been some slight updates based on FX, the current FX rates.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Andrew Jeffrey with Truist Securities. Your line is open. |
7,557 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Operator: Our next question comes from Andrew Jeffrey with Truist Securities. Your line is open.
Andrew Jeffrey: Thanks. I appreciate you taking the question. Ryan, I wanted to dig in a little bit on the impressive 17% merchant acceptance growth. It sounds like that really highlights the possibility or the opportunity for continued volume growth even in markets maybe where the secular growth rate is slowing a little bit. Is that sustainable? Should we continue to think about that kind of mid-teens acceptance growth as being a key driver of overall volume expansion? |
7,558 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Listen, when I'm talking to our sales teams around the world, I'm pushing them for as much as possible and more. I mean, if you travel around the world, there are still hundreds of millions of small businesses that aren't on our network. And then you add to that, Andrew, you add to that kind of the creator economy and what's happening there. You literally can think about the acceptance opportunity in billions. So our sales teams around the world are out there working hard, getting creative, figuring out different ways around the world that we can serve those 100-plus million small and micro businesses and ultimately, 1 billion, 2 billion, 3-plus billion individuals around the world that all ultimately could become acceptors of our products as you think about things like Tap to Phone rolling out at scale. I mean, you can imagine a world where every handheld device becomes a tap acceptor, and every device is a tap to pay opportunity where we can not only penetrate further into the C2B space but the P2P space and others. So we felt really good, as you were alluding to, for the last -- I think the last several quarters, we've been 17%, 18%, 19% growth in acceptance locations. I tried, in my prepared remarks, just to give you a little bit of color of the type of things that we're out there doing with players like bKash and Caixa. And we'll be pushing hard to continue to light up all those other opportunities in emerging markets and developed markets around the world.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from James Faucette with Morgan Stanley. Your line is open. |
7,559 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Operator: Our next question comes from James Faucette with Morgan Stanley. Your line is open.
James Faucette: Thank you. I wanted to touch on the cross-border travel volume growth. It looks like it slowed from roughly 25% to maybe 16% to 17% in January. And back when you're kind of outlining your assumptions for fiscal '24, you thought it would be in the low-20%, and we see a 4 to 5 percentage point improvement compared to 2019. Just wondering how we should think about that as an assumption going forward. Do you think we'll bounce back to that low 20s? Or do you think something closer to where you've seen in January makes more sense? Now this is an area that sometimes you have at least some forward visibility, so trying to get a sense of where we should be thinking about that component? |
7,560 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yes. Great. Thanks, James. We had a really good quarter in Q1 to start the year on our cross-border business. Cross-border volumes, as you said, was up 16%. We feel great about that; and as you click into those, e-com growth in the low teens and 19% growth in travel, with the index going from 139% to 142%. And I'll just clarify one thing you said in terms of the guidance that we had provided into the low 20s, that was related to the travel portion of that, which came in at 19% or almost 20%. I do think when understanding the composition by region of our performance, and some of this is a little repetitious but I think important to go through, looking at it region by region is helpful. In LAC, CEMEA, Europe and U.S. outbound, strong results, indexing between 145% to 170% relative to the 2019 levels; second, U.S. inbound, which up until Q4 had lagged 2019, also continued to improve in Q1 and in line with our expectations; in AP, we did see continued expansion in and out of AP but a little bit slower than we saw in Q4, and that was specific to Australia and Japan. And it's probably also worth mentioning, well, not necessarily a large number, the war in the Middle East did have some impact on the cross-border numbers as well. But again, stepping back, we feel really good about our cross-border business in total. The Q1 results were strong, 16% growth; healthy growth for both travel and e-com. And we feel good about the outlook for the rest of the year.
Jennifer Como: Next question, Jordan.
Operator: Our next question comes from Ashwin Shirvaikar with Citi. Your line is open.
Ashwin Shirvaikar: Hey, Ryan. Chris, Jen, how are you? I just want to drill down into sort of expectations or implied expectations for second half of fiscal '24 given Q1 results, upper single digits; Q2 expectations around growth, mid- to high single digits, so there's an acceleration that's implied. And the question is, what drives it? |
7,561 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yes. Thanks. I'm going to break that down into two questions because, one, you said how do we feel about the revenue guide and then I think the second question implied there was on drivers. And so let me talk to those because they are a little bit different. And maybe I'll even start with the second part first, which is with drivers. We're 1 quarter into the fiscal year. It was a solid quarter, stable trends from Q4. And importantly, the consumer has remained resilient. As we look into the rest of the year, we do anticipate drivers to continue to tick up slightly in the second half of the year for two reasons: one, average ticket sizes should improve, in particular, as we lap lower ticket sizes in the second half of last year in the U.S. and we see continued inflation in certain international regions; and second, we're continuing to execute against our growth initiatives in our global markets, for example, the processing wins that we've seen in LAC that we've shared progress about previously. So that's sort of the underlying drivers. And then your first question actually was on revenue. We had a solid start for the year, a really good Q1, stable Q4 trends. Today, we've reaffirmed our full year guide on net revenue in constant dollars, and that includes the modest impact of Reg II that we talked about. So we feel good about Q1. We feel good about the outlook for the rest of the year, and we'll continue to focus on execution.
Jennifer Como: Next question Jordan.
Operator: Our next question comes from Timothy Chiodo with UBS. Your line is open. |
7,562 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question Jordan.
Operator: Our next question comes from Timothy Chiodo with UBS. Your line is open.
Timothy Chiodo: Great. Thanks for taking the question. I wanted to dig into Pismo a little bit. The website talks about large banks, marketplaces and fintechs. And you mentioned earlier the movement away from the legacy systems into more modern cores. I want to talk a little bit about the ambitions and the potential in terms of the bank sizing. And also, these core conversions, are they for new product and sort of sidecar cores, if you will? Or are we talking about the potential for your core kind of issuing clients in the U.S., midsized banks, to be moving their legacy core potentially over to something offered by Pismo in the future? |
7,563 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: So let me step back and talk a bit about how we found Pismo and then answer your question directly, Timothy. I mentioned in my prepared remarks these narratives and these priorities that we've been hearing from CEOs of banks all over the world, in the U.S. and all over the world, medium-sized, big-sized banks, which is, one, they're trying to make this transition from their legacy tech stacks to the cloud; and the second is they want to expand, especially in emerging markets where they don't have enough options of issuer processors to help them. That led us, hearing that over and over and over again, to go search the world for what we thought was the best cloud-based processor and core bank provider that we could find. And that led us to Pismo. And so while Pismo is based down in Brazil, their platform is global. Their clients today are a mix of some of the biggest and most sophisticated banks in the world as well as medium-sized banks and fintechs. So they already today have a mix of different client types. And our ambitions, our ambitions are what I said in my prepared remarks, which is we want this to be the preferred provider of banks around the world. You asked specifically about midsized banks in the U.S. for their core banking platform, the short answer is absolutely. As you think about large banks and their issuer processing capabilities not just for debit, which we have today in the U.S., but for debit, credit, prepaid, commercial, not just in the U.S. but globally, we think Pismo is absolutely a solution that our issuers could be using around the world. So yes, it is a global platform. We have global ambitions. Given the relationships that we have, the privileged relationships that we have with banks, big and small, in the U.S. and around the world, we feel good about our ability to distribute the product to them.
Jennifer Como: Last question, Jordan.
Operator: Our final question comes from Jason Kupferberg with Bank of America. Your line is open. |
7,564 | V | 1 | 2,024 | 2024-01-25 17:00:00 | Visa Inc. | 38,043,467 | Operator: Our final question comes from Jason Kupferberg with Bank of America. Your line is open.
Jason Kupferberg: Thank you. Just wanted to ask if we're still comfortable with low double-digit process volume and transaction growth for this year. I know both of those started off kind of in the high-single-digit range, ticked down a little bit in January. And also, any change in your thoughts around fiscal '24 incentive guidance? I think we were looking for modestly less dollar growth than in F '23, but you did a little better than expected in Q1. Thanks.
Chris Suh: Yes. Thanks, Jason. I think I answered some of the driver questions, but I'll just recap very quickly at a summary level. We're reaffirming the outlook for the full-year on drivers, second half benefiting from average ticket sizes in the U.S. and inflation in certain international regions and continuing to executing a number of our growth initiatives in global markets. Processing wins in LAC is the example that I used a minute ago. And so yes to your first question about reaffirming the guide on drivers. And then sorry, repeat your second question for me.
Jason Kupferberg: Just on the incentive guide.
Chris Suh: Incentives, yes. On incentives, yes, also no change in outlook for the full year. As you know, we manage the business to net revenue growth. That's where we're focused. We've updated our guidance for the full-year and Q2 on that. And we'll continue to, like I said, focus on execution.
Jennifer Como: Great. And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.
Operator: Thank you for your participation in today's conference. You may disconnect at this time. |
7,565 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Operator: Welcome to Visa's Fiscal Second Quarter 2025 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin.
Jennifer Como: Thank you. Good afternoon, everyone, and welcome to Visa's fiscal second quarter 2025 earnings call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance, and our actual results could differ materially as the results of many factors. Additional information concerning those factors is available in our most recent Annual Report on Form 10-K and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. Our comments today regarding our financial results will reflect revenue on a GAAP basis and all of the results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan. |
7,566 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Thanks, Jennifer. Visa is one of the world's best businesses with strong growth and leading profitability powered by a world-class brand, innovative technology, an unparalleled network, and global scale. This quarter, we saw the strength of our business model with $9.6 billion in net revenue, up 9% year-over-year, and EPS up 10%. Our key business drivers were strong. Even with the lapping of leap day from last year and consumer spending remained resilient in an uncertain and dynamic environment. In constant dollars, overall payments volume grew 8% year-over-year. US payments volume grew 6%, and international payments volume grew 9%. Cross-border volume, excluding Intra-Europe, rose 13% in constant dollars, and process transactions grew 9% year-over-year. Our strategy across consumer payments, commercial and money movement solutions and value-added services continues to resonate with our clients, and we remain focused on serving our clients through our innovation and product development. I will start with quarterly highlights and then make a few comments on the current environment. In consumer payments, we continue to execute the fundamentals, expanding credentials and acceptance, and driving user engagement in order to grow both carded and non-carded volumes. Total credentials grew 7% with generally consistent growth across our regions. We added 1 billion tokens since last quarter to total 13.7 billion, and now nearly 50% of our e-commerce transactions globally are tokenized. We also crossed 1 billion tokens in Latin America and 0.5 billion in CEMEA. And we continued to make progress, displacing cash in key markets. For example, India, Mexico and Brazil each added more than 1 million merchant locations in the last year as we have driven greater acceptance, including with smaller merchants. We recently signed an agreement with Efecty, one of the biggest cash networks in Colombia, with over 30 million users. Efecty will launch 4.5 million consumer debit cards and build acceptance with their cash |
7,567 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Colombia, with over 30 million users. Efecty will launch 4.5 million consumer debit cards and build acceptance with their cash agents. We also convert closed-loop to open-loop opportunities. For example, I'll highlight two transit deals in Latin America, one in Argentina with Banco de la Nación to launch an open-loop SUBE Visa card for use on public transportation. And two, in Chile with Metropago to also launch an open-loop Visa card, and at acceptance locations at transit stops. As we mentioned at Investor Day, what gives us confidence in our ability to grow consumer payments are our products and our solutions. They are enabling us to succeed in important high-value consumer payments use cases, innovations such as Tap to Everything, tokens, multi-currency cards, flex credentials, account-to-account solutions, and our differentiated cardholder benefits platforms. I'll note some progress this quarter. Our efforts in Tap to Everything continued, driving cash digitization and habituation. Tap to Phone added nearly 2 million transacting device terminals since last quarter, with growth primarily driven by Latin America, the US, and Europe. Tap to Pay penetration is now at 76% globally, with the US passing 60% for the first time. Penetration at US drug stores, retailers, and quick-service restaurants is now above 60% as well. Tap to Add Card continued to gain traction, and with the majority of fraud being eliminated as compared to manual entry, it's not surprising that we now have nearly 150 issuers participating globally in more than 35 countries and territories. Tap to P2P is a Visa product that leverages tokenization for enhanced security. Visa's tap kernel and SDK technology for seamless contactless data transmission between devices and the convenience of Visa Direct's real-time money movement for funds transfers. We are soon launching our Tap to P2P products in the US with Samsung. Samsung Wallet will introduce this innovative P2P payments feature that will allow users to quickly send money to friends or family |
7,568 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Wallet will introduce this innovative P2P payments feature that will allow users to quickly send money to friends or family by just tapping a phone to a debit card or another phone, a strategy focused on enabling cross-platform functionality across mobile wallets. Another development is in our stablecoin offerings. We believe two important capabilities are interoperability and programmability. We have continued to expand our interoperability, including with our first seven-day-a-week stablecoin settlement, recently surpassing $200 million in cumulative stablecoin settlement volume. On programmability, we also developed the Visa tokenized asset platform to help enable banks to issue and leverage stablecoins for new types of programmable finance. Our first pilot partner, BBVA, plans to launch a stablecoin later this year on the Ethereum blockchain. In our focus to attract and retain the affluent and cross-border traveler, we continue to evolve our Infinite product and are excited about the launch of the Scotiabank Passport Visa Infinite Privilege card, offering elite travel benefits for Canadians. The card provides travel rewards, insurance, and exclusive perks. Moving to commercial and money movement solutions. As we drive further penetration of these opportunities, we have seen strong results in the second quarter with commercial volume up 6% in constant dollars, Visa Direct transactions up 28%, and CMS revenue up 13% year-over-year in constant dollars. In Visa Commercial Solutions this quarter, we made progress on our strategy as we deepened our relationships with a number of existing clients. To capture the accounts receivable and accounts payable opportunity, we are utilizing product innovations such as embedded finance solutions to meet payers where they manage their business to drive adoption of cards. We are pleased that Lloyds has signed a deal with Taulia to issue and embed Visa virtual cards in the SAP ERP and procure-to-pay workflows of their customers. Our vertical-specific strategies serve the needs |
7,569 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | virtual cards in the SAP ERP and procure-to-pay workflows of their customers. Our vertical-specific strategies serve the needs of small, middle-market, and large businesses. In that light, we are supporting Itau in their card as a service platform, which offers credit and debit card issuance, product life-cycle management, and digital accounts to businesses across agribusiness, real estate, auto and retailers. In the B2B travel vertical, we continue to see strong demand for innovative payment solutions to transact in multiple currencies, while enhancing payment security, reconciliation, and operational efficiency. We expanded our agreement with Leon Lea Global to launch a B2B travel solution in Hong Kong. Leon Lea Global will also be utilizing Visa Direct multi-currency capabilities to support end-to-end collections and payouts. Continuing with Visa Direct, this quarter we signed an important deal with Jack Henry to offer Visa Direct through their digital applications to facilitate rapid transfers among bank accounts and enable their community and regional financial institution clients to offer Visa Direct to their consumer account holders and SMBs. In the cross-border space, checkout.com is the first acquirer in the UAE to launch Visa Direct's push-to-card solution, enhancing real-time money transfer capabilities for both cross-border and domestic transactions. And in the US, we expanded our agreement with TabaPay, a money movement platform serving more than 6,500 fintechs and enterprises. Visa Direct will now be enabling push to account and wallet in addition to push to card. These are all examples of our strategic focus to grow our domestic and cross-border business and expand with our existing customers for Visa Direct, the largest money movement platform in the world by transactions, volumes, and endpoints. In value-added services, we continued to deepen our relationships with our existing customers and also focused on attracting new customers with some of our recently acquired assets. Value-added services |
7,570 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | existing customers and also focused on attracting new customers with some of our recently acquired assets. Value-added services revenue grew 22% in constant dollars, powered by strong growth across all portfolios. I'll share a few areas of success in the execution of our strategy. In issuing solutions, Pismo brings a holistic offering with credit, debit, prepaid, and commercial issuer processing and core bank processing. We have a strong pipeline, and we are well on our way to enter five new countries across four regions this year. Some recent deals to note include, First in Latin America with Nequi in Colombia, and Banco de la Nación in Argentina. And in Asia-Pacific with T2P in Thailand and [indiscernible] in India. Also in issuing solutions, we continue to grow our card benefits business. In Europe, Raiffeisen Bank International in Austria recently launched the travel sentive travel platform, leveraging our solutions as well as added Visa's PriorityPass benefits to customers. In acceptance solutions, we recently announced two new product offerings. The first is a completely new version of Authorized.net, launching in the US next quarter and additional countries next year. It features a streamlined user interface, AI capabilities with an AI agent, A-Net, improved dashboards for day-to-day management and support for in-person card readers and Tap to Phone. It will help businesses analyze data, summarize insights, and adapt to rapidly changing customer trends. The second is the new unified checkout experience, available in the US and in pilot stage in additional markets in Q4. As new ways to pay continue to emerge, merchants want to integrate once to accept all payment types to decrease the likelihood of lost sales at the point of checkout. Unified checkout can be launched in a few hours with a deploy-ready payment acceptance code. It is designed to deliver strong e-commerce conversion rates with an intuitive checkout experience, orchestrating over 25 card and alternative payment options. Because unified |
7,571 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | rates with an intuitive checkout experience, orchestrating over 25 card and alternative payment options. Because unified checkout is part of the Visa Acceptance Solutions platform, customers also have access to fraud management, 3D secure authentication, and tokenization management. We also continued to grow our client relationships in Acceptance solutions this quarter. For example, we have now become the payment service provider of choice for sporting goods retailer Decathlon, who has more than 2,000 stores in nearly 80 countries. Decathlon will be using our gateway and decision manager capabilities for their e-commerce business. In risk and identity solutions, since the closing of our acquisition of Featurespace, we have been actively pursuing deals and have signed over 20 clients globally. We also now provide an enhanced holistic fraud protection solution from Featurespace called the Adaptive Real-time Individual Change-identification or ARIC Risk Hub. This solution utilizes machine-learning and AI solutions to enable clients to build more accurate risk profiles and more confidently detect and block fraudulent transactions, ultimately helping to increase approvals and stop bad actors in real-time. In advisory and other services, our open banking platform, powered by Tink, provides payment initiation and account information services to sellers and payment providers or PSPs across Europe and the United States. In Germany, Tink and Adyen are working with Recharge and Vodafone to provide their customers the option to pay by bank when checking out. Tink has reached a milestone of over 10,000 merchants choosing Tink's pay by bank capability via our more than 10 European PSP partnerships. Across our VAS portfolio, our innovations are designed to address specific challenges in the payments ecosystem and to provide secure, efficient, and scalable solutions for businesses of all sizes. At Investor Day, I spoke about the evolution of our Visa as a service stack. The foundation of our stack is our global connectivity and |
7,572 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Day, I spoke about the evolution of our Visa as a service stack. The foundation of our stack is our global connectivity and the infrastructure that Visa is built on, our network, our network of networks, and access to our credentials and acceptance. Then we have our services architecture, which contains the specific capabilities that we think of as the building blocks for everything that we do, like risk, settlement, and more. Using these services, we create client solutions. We are taking these componentized capabilities and investing in and enhancing them to create new features and capabilities to offer them to a much broader array of customers and partners. And we strive to make it easier than ever for our partners and clients to access these solutions. I encourage all of you to tune in tomorrow to Visa's 2025 Product Drop, where we will share how we continue to evolve the Visa as a Service stack to further our product development and lead in AI. You can watch live on our website at 10 A.M. Pacific Time. Before I hand over to Chris, I'll share some thoughts on our business performance and the current environment. Throughout our history, we have evolved our network and strategy to deliver the best innovation, serve our clients, and pioneer the future of payments. We saw the result of these efforts this quarter with our strong financial performance. Halfway through our fiscal year, consumer spending has been resilient and strong, but there's much uncertainty. Focusing on the US, in Q2 and through April 21, we have not seen any signs of overall consumer spending weakening. While spending growth differs among consumer spend bans, with the most affluent growing the fastest, all spend bans remain resilient and consistent with past quarters. Within spend categories, there are some select areas, such as in travel with airlines and lodging, where growth has decelerated, but overall discretionary and non-discretionary spend remains strong. Outside the US, we see similar stable trends. Within cross-border, volume growth |
7,573 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | and non-discretionary spend remains strong. Outside the US, we see similar stable trends. Within cross-border, volume growth was in line with Q4 2024 levels. We have seen some impacts from currency weakness and travel to specific countries, but the overall growth was above the pre-COVID trend. To wrap up, while we are certainly not immune to the macroeconomic impacts, our incredibly diverse business model has proven to be resilient in the face of a variety of environments, most recently in Q2. And we see this resilience playing out in our financial outlook, which Chris will cover in a moment. For the rest of the year and beyond, what I, our leadership team, and our more than 31,600 employees are focused on is serving our clients and capturing the enormous opportunities ahead. We focus on what we can control and stand ready to make thoughtful adjustments when necessary. I am confident that our business model, strategy, and employees will continue to keep Visa operating from a position of strength well into the future. And with that, I'll turn it over to Chris to review the financial results, discuss what we have seen so far in April, and provide our expectations for the rest of the year. |
7,574 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Thanks, Ryan, and good afternoon, everyone. Our second-quarter results reflected strength in our business. In constant dollars, global payments volume was up 8% year-over-year, and cross-border volume, excluding Intra-Europe, was up 13% year-over-year. Total process transactions grew 9%. Adjusting for the lapping of leap year, our trends were generally stable. Fiscal second-quarter net revenue was up 9% year-over-year in nominal dollars and 11% in constant dollars, helped by resilient consumer spending, lower-than-expected incentives, and better-than-expected value-added services revenue. EPS was up 10% year-over-year and 11% in constant dollars, better-than-expected, primarily due to stronger operating performance and a lower tax rate than expected. Let's go into the details. Total international payments volume was up 9% year-over-year in constant dollars in Q2, relatively consistent with Q1 when adjusted for leap year. US payments volume was up 6%, with e-commerce growing faster than face-to-face spend. Credit was up 5% and debit was up 7%. When we look on a monthly basis in the US, we had a strong January, a dip in February, primarily due to the lapping of leap year and a relatively strong March, even with the fact that Easter was in March last year and in April this year, which resulted in Q2 year-over-year growth being below Q1, but better than Q3 and Q4 of 2024. When looking further at quarterly spend category data in the US, adjusted for leap year, we saw travel and entertainment growth decelerate, restaurant growth remained stable, and retail and fuel growth improved with strong and stable total discretionary and non-discretionary spend growth, reflecting resilience in consumer spending. Now to cross-border volume, which I'll speak to in constant dollars and excluding Intra-Europe transactions. Before going into the detailed results, I wanted to spend a moment to discuss the makeup of our cross-border business. From a geographic mix perspective, our total cross-border volume is fairly well |
7,575 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | the makeup of our cross-border business. From a geographic mix perspective, our total cross-border volume is fairly well distributed, with no reported region comprising more than 25% of total cross-border issued volume. Both e-commerce and travel issued volume reflect a broad distribution as well. You may also recall that our total cross-border issued volume mix is about 40% e-commerce and 60% travel. So there is diversity by region and by spend type. Keep in mind that just as our cross-border volumes are distributed, so are the associated revenues. Now on to the results. Total cross-border volume was up 13%; e-commerce was up 14%; and travel was up 12%. There were several factors that contributed to the growth moderation from Q1 to Q2, including the lapping of leap year, the timing of Ramadan and Easter, weaker currencies in certain countries, and softer Canada to US travel. Some of these factors impacted our intra-quarter trends, which varied slightly from US payment volume trends. While we saw a strong January and a February impacted by leap year, we did see a somewhat softer March. Even with these factors, as Ryan mentioned, the total cross-border volume growth was in line with Q4 2024 levels and above the pre-COVID trend. With that as a backdrop, I'll move to discuss our financial results, which were strong. Starting with the revenue components. Service revenue grew 9% year-over-year versus the 9% growth in Q1 constant dollar payments volume. Data processing revenue grew 10% versus 9% process transaction growth, primarily due to value-added services and pricing. International transaction revenue was up 10%, below the 13% increase in constant dollar cross-border volume, excluding Intra-Europe, but in line with nominal volume growth, reflecting the impact of FX. In addition, while we had higher volatility in Q2, this was offset by a number of factors, including client mix and hedging. Other revenue grew 24%, primarily driven by growth in advisory and other value-added services and to a lesser extent, pricing. |
7,576 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Other revenue grew 24%, primarily driven by growth in advisory and other value-added services and to a lesser extent, pricing. Client incentives grew 15%, lower than expected, primarily due to factors related to deal timing. Now, to our three growth engines. Consumer payments revenue was driven by strong payments volume, cross-border volume, and process transaction growth. Commercial and money movement solutions revenue grew 13% year-over-year in constant dollars, driven by commercial payment volume growth of 6% year-over-year in constant dollars, consistent with last quarter. And Visa Direct transaction growth of 28% year-over-year to 3 billion transactions, below Q1 growth, primarily due to the lapping of our initial ramp in Latin America for interoperability among P2P apps and the lapping of leap year. CMS revenue growth in Q2 moderated from the first quarter, primarily due to lower cross-border volume growth and the absence of the lapping benefit of one-time items. Value-added services revenue growth accelerated to 22% in constant dollars to $2.6 billion, with strength across all portfolios led by issuing solutions and advisory and other, and inclusive of Featurespace. Operating expenses grew 7%, primarily driven by increases in personnel, marketing, and depreciation and amortization. This was lower than we expected, primarily due to a more favorable FX impact from balance sheet remeasurement and some marketing campaigns and advisory services related expenses being shifted to Q3. Our tax rate for the quarter was 16.9%, lower than expected due to several items, including a change in our geographic mix of earnings. EPS was $2.76, up 10% over last year, with an approximately 1.5 point drag from exchange rates and an approximately 0.5 point drag from acquisitions. In Q2, we bought back approximately $4.5 billion in stock and distributed $1.2 billion in dividends to our stockholders. At the end of March, we had $4.7 billion remaining in our buyback authorization. And in April, the Board of Directors authorized a |
7,577 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | the end of March, we had $4.7 billion remaining in our buyback authorization. And in April, the Board of Directors authorized a new $30 billion multiyear share repurchase program. Now let's move to what we've seen so far in Q3. Through April 21st, driver trends have been strong, with some benefit from Easter and Ramadan timing. US payment volume was up 8%, with debit up 9% and credit up 7% year-over-year. Process transactions grew 12% year-over-year. For constant dollar cross-border volume, excluding transactions within Europe, total travel and e-commerce cross-border volume each grew 13% year-over-year. Now on to our expectations. Remember that adjusted basis is defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail. As we said many times, we are not economic forecasters. The potential impacts from tariffs have led to higher levels of economic uncertainty. That being said, what we've seen thus far in our results is relative resilience in consumer spending. So with that as a backdrop, let me cover some of our key assumptions that are incorporated. For cross-border volume, our assumption is that Q3 and Q4 volumes are in line with the average of March and April, which normalizes for Easter and Ramadan timing as well as accounts for other factors I referenced when describing Q2 results. This puts Q3 and Q4 cross-border volume growth slightly below Q4 2024 levels. For volatility, we have seen high FX volatility thus far in April, but assume this will moderate starting in May and remain level for the remainder of Q3 and Q4. This puts Q3 just above Q2 and Q4 more in line with Q2. For incentives, as a result of some client performance adjustments and deal timing, we are assuming that the year-over-year growth in incentives in the back-half will be higher than the first-half, with sequential step-ups in Q3 and Q4. Pulling it all together, we expect third-quarter adjusted net revenue growth in the low-double-digits, |
7,578 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | step-ups in Q3 and Q4. Pulling it all together, we expect third-quarter adjusted net revenue growth in the low-double-digits, essentially in line with Q2. Moving to operating expenses. As we had some timing impacts of expenses in the second quarter, we now expect those to occur in the third quarter with adjusted operating expense growth in the low-double-digits, relatively consistent with adjusted revenue growth. Non-operating income in the third quarter is expected to be approximately $150 million, which includes a benefit from the reversal of accrued interest expense due to the resolution on the tax matter. And our tax rate in the third quarter is expected to be between 17% and 17.5%. As a result, we expect third quarter adjusted EPS growth to be in the high-teens. For acquisition impacts, we expect a minimal benefit to net revenue growth, an approximately 1 point contribution to operating expense growth, and an approximately 0.5 point headwind to EPS growth in the third quarter. Moving now to the full year. Our full-year guidance for adjusted revenue growth, adjusted operating expense growth, non-operating income, tax rate, and adjusted EPS growth remains unchanged. In summary, we delivered another strong quarter in Q2, and our business remains steady. As Ryan said, throughout our history, we've managed through different economic cycles, and we're confident we'll manage through this period as well. Now Jennifer, it's time for some Q&A. |
7,579 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Thanks, Chris. And with that, we're ready to take questions.
Operator: [Operator Instructions] Our first question comes from Tien-Tsin Huang from J.P. Morgan. Please go ahead.
Tien-Tsin Huang: Hi. Thanks a lot. Good results here. It looks like the consumer is pretty resilient. So beyond volumes, I wanted to ask if you've seen any noticeable change in tone on client decision-making pipelines, backlog. I'm definitely curious about international clients, and maybe if they're changing their -- the speed with which they're working with Visa. Thanks.
Ryan McInerney: Hi, Tien-Tsin. The bulk of the time we've been spending with clients over the last several months has been sharing our data, sharing our products and solutions, working with our advisory teams, really helping them to navigate this environment. And that's been the bulk of what we've been doing. I mean, this is the time when we try to be at our best with our clients. We -- I talk to our teams every week to make sure they're out in the offices of our clients, leaning in to work with them. And that's been the bulk of how we've been spending time with our clients, helping them make sure they have all the data and information and tools and solutions they need to run their business most effectively, which many of them run very, very complicated businesses. Over time, there could be conversations about partnership arrangements and deals and those types of things, but that's not been the bulk of how we've been spending our time today.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of James Faucette from Morgan Stanley. Please go ahead. |
7,580 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of James Faucette from Morgan Stanley. Please go ahead.
James Faucette: Thank you so much. Wanted to ask about what you're seeing around our bookings around international travel and travel generally. You highlighted there have been a little bit of slowing growth there, maybe domestically, but overall still remained good and maybe impacted by FX, et cetera, but we've seen a lot of FX moves. So just wondering how you're feeling about the travel outlook on a go-forward basis and anything you can glean from early bookings, et cetera? Thanks.
Ryan McInerney: Hi, James. Yeah. We covered a number of moving parts in our travel and cross-border business as it impacted Q2 and gave some assumptions about what we anticipated going into the back-half of the year. I think I'll make two points. One is, obviously, the situation is quite fluid, and we're monitoring the data very closely, and we're really relying on facts and facts and the results as we see them. But the second point maybe is even more important is that when we look across our business, we talk about the diversity of our business across -- in many dimensions. Regional is one of them. But certainly, when we look at our cross-border business, whether that's issued or acquired, we also benefit from that diversity. And when it comes to inbound travel into the US, the US specifically actually is one of the smaller regions as measured by cross-border inbound travel volume, even though it does have strong yields. And so we just keep that in mind. We'll have to watch how the data comes in, but we have great diversification in our cross-border business, and we anticipate that we'll be able to navigate this period.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Sanjay Sakhrani from KBW. Please go ahead. |
7,581 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Sanjay Sakhrani from KBW. Please go ahead.
Sanjay Sakhrani: Thank you. Chris, just to follow up on your point just now on the corridors and the US one specifically. Obviously, we're hearing a lot of travel information, how things are falling off coming into the US, especially from Canada. Maybe you could just talk about what kind of assumptions you've made for the remainder of this year, because I know that has an impact on sort of the economic return from each of those corridors. So maybe you could just help us with that. And then just curious, inside of the volumes that you saw intra-quarter and even early in April, did you see any evidence of a pull-forward of spending? Thanks. |
7,582 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Got it. Hi, Sanjay. A two-part question. Let me address actually the second one first, because that's a quicker one. There was some evidence of pull-forward. In certain categories, electronics is one of them, and it was mostly in sort of the first part of April, and we shared with you the data through the 21st. And actually, while I'm speaking about April, I just saw the data through the 28th just this morning, and that's relatively unchanged as well. And so there's no meaningful differences even as we get further into April. And so from a pull-forward standpoint, we may have seen a little bit in the first part of April, but all -- by and large, not a meaningful impact to our total growth. And then going back to cross-border assumptions, so I shared a number of them, and I went through in my prepared comments, a number of the items that impacted the cross-border numbers in the month of March. And as it pertained also to the month of April, Ramadan and Easter were two that had timing differences that impacted March and April. But then I spoke to two other factors. One, a broader category around currency weaknesses, and currency weaknesses have an impact on purchasing power, obviously abroad. We had the US dollar weakening, but we also had currency weaknesses in LAC, in Mexico, in different countries throughout Asia. And so that's also impacting the results that we saw in March and April. And then the last one, of course, is Canada. And I referenced it on the call, I could give a little bit more color. I mean, we did see a meaningful slowdown in the Canada to US border. But again, keep in mind the diversification of our business. And so the fact that, as I just mentioned in the last question, the fact that the US is one of the smaller regions as measured by cross-border travel inbound volumes. And so when you add that up, it's really not a -- it's a very small percentage of our global travel volume, and the revenue impact shouldn't be meaningful. And so what we did in terms of assumptions is we |
7,583 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | of our global travel volume, and the revenue impact shouldn't be meaningful. And so what we did in terms of assumptions is we took the average of March and April, which we think accounts for all of those items, and we extended that through the remainder of the fiscal year, and that would put cross-border at just below what we finished FY24 at in Q4. |
7,584 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Sanjay Sakhrani: Thank you.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Andrew Schmidt from Citi. Please go ahead.
Andrew Schmidt: Hi, Ryan. Hey, Chris. Thanks for taking the questions this evening. Maybe you can dig into value-added services. Good to see the robust growth there. Maybe you could just unpack that and just talk about your viewpoint and how that performs through the cycle. Obviously, there's a range of revenue models in their transaction-based, project-based, and recurring/subscription. But if you'd unpack, that would be great. And then any detail on how you're thinking about value-added services growth in the back-half would also be helpful. Thanks so much. |
7,585 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yes, why don't I just talk a little bit about the business, and then, Chris, I'll let you talk about some of the financial aspects of the question, both in terms of what drove the strong performance in the quarter and also where things are headed. Yeah, we just -- we feel really good about the strategy, our execution, our products. I highlighted some really exciting new products in my prepared remarks. And I was just going to go back to some of the things we shared with you at Investor Day about our execution approach. We're -- we've got -- you asked a little bit about some of the business drivers of what happens there. And we've said about 65% of our revenue is really about enhancing Visa payments. But we've been really making a lot of progress on the incremental opportunities to enable all different types of payments, not just Visa payments, and the services that then go beyond payments. If I kind of go back to an example in my prepared remarks, I talked about the authorized.net platform that we've relaunched and we're relaunching. That's a great example of enabling all different types of payments. And that's going to be, we think, a really positive impact in the market, specifically focused on growing our share in small-business checkout. And you go back to what I mentioned in terms of our unified checkout experience that will impact all different sizes of sellers on our platforms. Those are two examples, obviously, in the acceptance business. But if you go back to our Issuing Solutions business, we're having great progress with Pismo and a lot of our other solutions there as well. Our risk and security solutions business, really excited about the progress in market we've made since we acquired Featurespace. And then in our advisory and other business, we've been having some really strong success as well. So thanks for that question. Chris, you want to hit a couple of the financial parts of it? |
7,586 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Sure. I'll just add on top of that. I think, Andrew, I think the heart of your question is how -- in addition, obviously, Ryan covered all the sort of the highlights of the business performance, I won't reiterate those. But I think part of your question was what could potentially happen to VAS in different sorts of cycles. And the way that I would think about it, the way we think about it is obviously, a lot could happen. We're monitoring that sort of the macro situation, we were not economic forecasters. But the thing I'll say about our business, I made the point about diversity previously, what does that mean with a little bit more color? We have, for example, our business today, if I compare it to previous economic cycles, we have more exposure to everyday spending. We have a bigger debit business. We have more e-commerce spend. We're more diverse geographically. And so you got to think about sort of how the business might get impacted today, and it might be different from previous cycles, and we do have greater diversification broadly. And then, as it comes to that, specifically, as Ryan said, there is a 65% of the business has a close correlation to Visa transactions. And so that part, depending on how the business would respond, could have a closer relationship, but there's a great diversification there as well, as we have a good portion of the VAS business that is independent of Visa transactions. And so when I think about that in total, I think there is a good resilience and diversification there as well.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Will Nance from Goldman Sachs. Please go ahead. |
7,587 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Will Nance from Goldman Sachs. Please go ahead.
Will Nance: Hey, guys. I appreciate you taking the question. Chris, I was wondering if you could double-click again on some of the comments you shared around the incentives outlook. I think you've been talking about a pretty front-loaded renewal schedule. I thought -- I heard, but correct me if I'm wrong, the outlook is for modest increases in the growth rate over the next two quarters, but I may have misheard that. But if that was the case, could you just talk through cadence and some of the drivers, kind of help square that with the front-loaded renewals? Appreciate it. Thank you.
Chris Suh: Sure, Will. Thanks for the question. You did hear correctly, and let me try to add a little bit of color and clarify. Q2 incentives grew 15%, came in lower than we had anticipated, primarily due to factors related to deal timing. I covered that on the call. In terms of what we expect for the full year and into the second half of the year, we've updated the expectation that in the back half of the year, our growth will be slightly higher than originally expected due to two factors that we called out. One is client-related performance adjustments, and the second is deal timing, which means specifically anticipated early renewals. And so when we reforecast the second-half of the year, we do expect the second-half to grow higher than the first-half of the year, and we do expect that sequentially to be Q3 a little higher than Q2, and Q4 to be a little higher than Q3. And then maybe the final thing I'll say is, when we look at the volume -- payment volume that was impacted by renewals, we still believe that we have the same expectation that we started the year, which is 20% of the payment volumes being impacted.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Timothy Chiodo from UBS. Please go ahead. |
7,588 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Timothy Chiodo from UBS. Please go ahead.
Timothy Chiodo: Great. Thank you. Chris, I want to dig in a little bit more on the delta between nominal cross-border volumes and nominal international revenue. I think you did a great job going through the items. But to recap, there's the FX volatility. There's the quarter and client mix, there is a pricing aspect. And then, of course, there's the hedging, which impacts the revenue, but not the volumes. I think you touched on the FX volatility, meaning not assuming in the guide that the high levels will persist, which is a good conservative approach. You talked around quarter mix and the yields being higher for US inbound. The one I was hoping you could drill in a little bit more is pricing, because I know previously the guidance talked a little bit about pricing being a second-half of the fiscal year event. So, whether it'd be specific to cross-border or for the whole business, maybe you could just touch a little bit on that pricing topic.
Chris Suh: Sure. Hi, Tim. Yes, let me parse those apart a little bit. You covered my points on international transaction revenue. As you pointed out, we grew 10%, which was in line with the nominal volume growth, but below the 13% constant-currency, that's the impact of FX. And I covered a number of items that impacted that, in addition to FX, higher volatility, and some offsets there that you mentioned. Happy to give you more color on those. But let me hit to your second point, which is our expectations on the full-year on pricing. Just to remind everyone, at the start of the year, we said we would anticipate that the pricing contribution to growth in the full year would be similar to the previous year, but the timing would be a little bit different, where we'd have more back-end loaded pricing. That's still our expectation. We don't have a different view. We do believe that pricing will benefit in the second half more than it did in the first half of this year. |
7,589 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead.
Darrin Peller: Hey, guys. Thanks. If you don't mind just going a little deeper into the FX vol offset by what you just said, customer mix, and hedging. I guess it's just if you can explain a little more. I know the -- that corridor and mix on corridor could be a factor. As you said, US volume inbound could have a higher yield, but we haven't necessarily heard you call out hedging much before in the business, and would assume that FX vol benefits would have been more of an offset. So maybe just explain a little more of the hedging or the mix dynamic, and what exactly happened? And then just a quick add-on would be de minimis, and whether or not from an e-com standpoint, cross-border e-com is something that you're factoring or thinking about having any way to think about how to factor that into the model going forward? |
7,590 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Got it. I got both those questions, Darrin. So let me give a little bit more color. Again, just to give -- dimensionalize again, the 10% growth in transaction revenue, which is in line with the nominal growth. And so that 3 point delta, you could think the big portion of that is FX. And then to your point, higher volatility, which we said in April was a -- with higher in Q2 and throughout April. The two items, which I could give a little bit more color on. I called out client mix and hedging. So client mix, we obviously have different clients throughout the portfolio there and different clients have different pricing and different yield dynamics. And so it really depends on specific client performance and which clients are growing and where, and that could have an impact on our revenue yield. And in this case, it was a bit of a drag against the -- against relative to the 13% constant currency volume growth. And then on hedging, we hedge a portion of our cash flow exposures. This quarter, we did have a gain in Q2. We had a year-over-year gain related to that hedging, but it was lower than the gain that we recognized a year ago in Q2. And so that became -- even though there was a gain, it was a drag, again it was a reconciling item between the two, the 13% and the 10%. So those are the two items that primarily offset the higher volatility that we recognized in international transaction revenue. And then your second question, Darrin, on de minimis, if we look at -- if we look at sort of the whole situation with China, so far, we're not seeing a material impact from tariffs related to China and specifically spend associated with the de minimis exemption, it's just not a material portion of our volumes and we wouldn't expect any material impact.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Jason Kupferberg from Bank of America Please go ahead. |
7,591 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Jason Kupferberg from Bank of America Please go ahead.
Jason Kupferberg: Thank you, guys. Wanted to ask about US volume growth. I know we went from 6% in the March quarter to 8% month-to-date. So I'm just curious if you normalize for effects of Easter, and I know, Chris, you mentioned a little bit of pull-forward to spend ahead of the tariffs. Should we be just assuming some moderation off the April levels of 8%, given those factors? Just want to make sure we've got the modeling square there, so we don't over extrapolate from a few weeks of data. Thanks.
Chris Suh: Yes. Good question, Jason. It's -- the overall environment, I'll go back to some of the comments Ryan made, the overall comment, the overall environment remains stable, healthy, and steady. Whenever we give the month-to-date data, I always disclaim it by saying two or three weeks, or three weeks in this case, don't make a trend. We'll have to see how the rest of the quarter plays out. The 8% in the month-to-date does reflect some benefits from the timing of Easter. I called that out earlier in the comments. We'll have to see how the quarter comes together. But I think the overall message that I would convey is that it's stable and the consumer remains resilient, and I wouldn't read too much into the six versus eight at this point.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Bryan Keane from Deutsche Bank. Please go ahead.
Bryan Keane: Hi, guys. Thanks for taking the question. Just want to ask about the entertainment weakness where you saw that exactly, and do you expect that to continue going forward? And was just thinking about the different affluent group, maybe growing faster versus other bands, and just the outlook there. Thanks. |
7,592 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Chris Suh: Yes. A couple of things I'd point to. One is, trends sort of triangulating around the data. The most important thing I think to keep in mind is that when we see -- when we talked about discretionary versus non-discretionary, they were both quite strong and healthy relative to the previous quarter. And so within that, we did have some puts and takes. I mentioned some travel and entertainment, but also offset by retail goods, as an example. And so there are puts and takes, there are some moving parts within that, but overall, healthy stable volumes, whether it's discretionary or non-discretionary. And as Ryan pointed out, even as we look across spend bands, the consistency of the performance in previous quarters, while obviously, higher spend bands are growing faster than they have been for several quarters, the quarter-on-quarter performance remains stable and consistent.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Dan Perlin from RBC Capital Markets. Please go ahead.
Daniel Perlin: Thanks. Just given the geopolitical backdrop, I'm just wondering, Ryan, if it changes in any way your views of how you're placing like your investment bets? I mean, not the long-term ones, but maybe more near-term. So, like risk-on your payback periods, specific geos that maybe you were thinking were kind of more short-duration in nature, but now you want to throttle back or even M&A opportunities that you might see that potentially could be created in this backdrop. Thank you. |
7,593 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yes, Dan, maybe I'll back up one step and just kind of talk about the macro-environment a little bit and then and then kind of zone in what you're saying. I mean, there's obviously more uncertainty today among consumers and businesses than there was several months ago. You see that in the consumer confidence metrics, it's not surprising. But I think what you've heard from us in our prepared remarks today and from the many questions that Chris has answered. If you look at the facts in what we can add to the conversation in terms of spending, it remains strong and resilient. You add to that just looking in the US, employment remains strong, wage growth remains steady, inflation has moderated, consumer balance sheets remain relatively healthy. So we're kind of balancing the uncertainty that we all have with the facts. And the facts show a lot of resiliency in what we're seeing. And so when we look at all of that, we remain very committed to our product roadmap, our investment roadmap. We are as confident today as we've ever been in the opportunities that we're going after across all three of our growth levers and consumer payments, value-added services, and commercial and money movement solutions. But as I mentioned on the call, we're constantly looking at scenarios. We are very kind of dialed into what could happen. And if and when we see facts that lead to changes, we'll be ready to make changes in our investment profile and our product pipeline. And then you mentioned M&A. I think if anything, from the position of strength that we operate, I'm optimistic that the current situation, as I described, it could create more opportunities for us around the world than might otherwise have happened. But we'll obviously have to just wait and see how that all plays out.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Adam Frisch from Evercore ISI. Please go ahead. |
7,594 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Adam Frisch from Evercore ISI. Please go ahead.
Adam Frisch: Hey, thanks for squeezing me in. My extrapolation of your guidance is, if there's a little bit of weakness, kind of just more related to cyclicality as opposed to anything more crazy, you guys can absorb that, correct me if I'm wrong on that assumption. But if macro conditions shift materially and much more quickly than expected, can you remind us where your key levers are in terms of revenue like pricing or cost management in terms of marketing and stuff that would allow you to keep pace with the rate of change if it were to be faster and protect your margins? Thanks. |
7,595 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Yes. Hi, Adam. I touched on some of these points a little bit ago, but let me just expand on them because I think it's sort of an interesting way to think about it. Obviously, every recession is different. But over the course of time and over history, Visa has proven to be quite resilient even during these economic downturns. We don't know what's going to happen. We're not economic forecasters. But the management team here is ready to move decisively should the need arise. Now our business is resilient. I talked about the diversification of the business, more exposure to everyday spend, more exposure to debit, even our cross-border volume is more e-commerce today than travel than it was, if I think about pre-COVID levels. And so that diversification helps us. And so if there was a downturn, I think our performance during this potential economic slowdown we would be resilient, and it can impact our business. If you think about it, between volumes and revenue, volumes historically grown faster than PC. Even if PC slows, we're confident that we can continue to grow faster than that for all the reasons I spoke about. And then the one other thing I'd add is on the revenue front, remember that incentives are largely variable. And so to the extent that volume growth does get impacted, there could be an offset on incentives. On the expense side, I think we've also historically shown we could flex our expenses. We could make -- we obviously want to balance between short and near-term and long-term priorities. We don't want to overreact to anything. We want to be thoughtful about making sure that we're investing in the right areas to ensure that Visa is successful over the long term, but we do have levers, and this is a management team that stands ready to act.
Jennifer Como: Next question.
Operator: Next, we'll go to the line of Ramsey El-Assal from Barclays. Please go ahead. |
7,596 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Jennifer Como: Next question.
Operator: Next, we'll go to the line of Ramsey El-Assal from Barclays. Please go ahead.
Ramsey El-Assal: Hi. Thanks for taking my question. Stablecoin seem to be having their moment, maybe helped along by clear regulations. I know you called out your strategy there, including this -- reaching $200 million of settlement flows. What are your latest thoughts on the demand for those stablecoin settlements or other stablecoin payments? Are you seeing or expecting an inflection? What are your clients saying? Thanks.
Ryan McInerney: It's still early, but we do see real potential, which is why we've been investing in the crypto space broadly in the stablecoin space specifically for many years now. We've built up a team of real experts that I think are very well-respected among the ecosystem. But it's early. On the one hand, $200 million is a great kind of milestone. On the other hand, it's still a relatively very small portion of our overall settlement volume. I guess I'd say a couple of things. One is, we are optimistic about the kind of the US government passing more clear and pragmatic regulations. I think not just in the US, but hopefully other countries as well. We are continuing to push forward with the settlement work that you mentioned, but we're also exploring an kind of a broader set of product opportunities and partnerships in the stablecoin space. I might use that as a little bit of a pitch to join our product drop tomorrow, which I mentioned in my prepared remarks, but our team will talk about some of those things as well. So as you said, there's a lot of activity and discussion about the stablecoin space right now. I think the tipping point will be more clear and pragmatic regulations. But I do think in the big scheme of things, certainly as it relates to our broader business, it's still very early in the development.
Jennifer Como: Last question, please.
Operator: And for our last question, we'll go to the line of Harshita Rawat from Bernstein. Please go ahead. |
7,597 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Operator: And for our last question, we'll go to the line of Harshita Rawat from Bernstein. Please go ahead.
Harshita Rawat: Good afternoon. Ryan, Visa has managed government nationalism risk for decades as a company. How do you think about navigating that risk in the current environment, being a US-based company operating globally during trade disputes? Thank you. |
7,598 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Ryan McInerney: Thanks. If I heard your question right, around how are we navigating all of this? We regularly engage with governments and regulators in every country where we operate. We have a like a world-class government engagement team in all of our regions and all of our major countries, but it's also our country managers, day-in and day-out, they are deeply engaged with the governments and the countries in which we operate because we are an extraordinarily important partner and company in every country we operate around the world. And our engagement now is -- it's important. It's as important as it's ever been, given the challenging and uncertain environment that you mentioned. What I would say is nationalism is nothing new. As long as we are permitted to operate in a country or territory, even if it's been more difficult for us to operate there than it has historically, we have a proven track record of being successful. We're used to operating in highly regulated markets and environments around the world. We've got tailored strategies, which we've tested in other markets with similar conditions, and we tailor those to the unique needs of our clients and our partners in every one of these markets. And we're working with our clients and partners to regularly educate the government and the regulators and the elected officials in those countries about not just what matters most kind of domestically in their market, but the complexities of the global payments market and what we need to be doing together to help them in their markets. So it is as complicated as I remember it, but we have the experience, the people, the products and services to put to work in these countries around the world, and we feel good about our ability to navigate it.
Jennifer Como: And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again and have a great day. |
7,599 | V | 2 | 2,025 | 2025-04-29 17:00:00 | Visa Inc. | 38,043,467 | Operator: Thank you all for participating in Visa's Fiscal Second Quarter 2025 Earnings Conference Call. That concludes today's conference. You may disconnect at this time, and please enjoy the rest of your day. |
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