Fiscal First Quarter 2025 Financial Results January 30, 2025 ©2025 Visa. All rights reserved. Fiscal First Quarter 2025 Results | YoY increase / (decrease) except for Effective Income Tax Rate | Net Revenue | Operating Expenses | Effective Income Tax Rate | Diluted Class A Common Stock Earnings Per Share | | --- | --- | --- | --- | --- | | GAAP Nominal-Dollar Basis | 10% | 22% | 17.4% | 8% | | Non-GAAP Nominal-Dollar Basis(1) | 10% | 11% | 17.7% | 14% | | Foreign Currency Impact(2) | ~0.5% | (~1%) | N/A | ~ ...

Core Insights - Elon Musk's X is launching X Money, a peer-to-peer payment platform in partnership with Visa, aiming to compete with services like Venmo and Zelle [1][2] - X Money will allow users to connect debit cards for payments, transfer money instantly to bank accounts, and access X Wallet via Visa Direct [2] - The initiative aligns with Musk's vision of transforming X into an "everything app" that offers multiple services [2] User Requirements - Users will likely need an X account to utilize X Money, similar to the requirement of an Apple account for Apple Pay [3] - This requirement may also serve to attract more users to the X platform [3] User Base and Competition - Since Musk's acquisition, X has lost millions of users, with many migrating to platforms like Meta's Threads and Bluesky, which has gained 27 million users since November [4] - The introduction of X Money could enhance convenience for creators on the platform to receive payments directly [4] Security and Fees - Details regarding the security of banking data and potential fees for transferring money to bank accounts remain unclear [5] - Other peer-to-peer apps may charge fees for instant transfers and withdrawals, which could also apply to X Money [5] Cryptocurrency Integration - Currently, there is no mention of cryptocurrency transactions being available through X Money, despite Musk's support for Dogecoin [6] - Future plans for X Money may include separate crypto transactions, but this remains uncertain [6] Launch Timeline - The official launch date for X Money is not yet clear, and it is uncertain whether the rollout will occur in phases or be available internationally [7] - Neither Visa nor X has provided further comments regarding the launch [7]

Group 1: Earnings Performance - Visa reported quarterly earnings of $2.75 per share, exceeding the Zacks Consensus Estimate of $2.66 per share, and up from $2.41 per share a year ago, representing an earnings surprise of 3.38% [1] - The company posted revenues of $9.51 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.82%, compared to $8.63 billion in the same quarter last year [2] - Over the last four quarters, Visa has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Visa shares have increased approximately 6.3% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $2.67 on revenues of $9.55 billion, and for the current fiscal year, it is $11.18 on revenues of $39.3 billion [7] Group 3: Industry Context - The Financial Transaction Services industry, to which Visa belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Visa's stock performance [5][6]

Financial Performance - For the three months ended December 31, 2024, net revenue increased by 10% to $9,510 million compared to $8,634 million in the prior year[91]. - Net income for the period was $5,119 million, reflecting a 5% increase from $4,890 million in the previous year[91]. - Non-GAAP net income increased by 11% to $5,463 million, with non-GAAP diluted earnings per share rising by 14% to $2.75[91]. - Service revenue rose by 8% to $4,208 million, driven by a 6% growth in nominal payments volume[106]. - Data processing revenue increased by 9% to $4,745 million, supported by an 11% growth in processed transactions[107]. - Cash provided by operating activities increased to $5,396 million, up from $3,614 million in the previous year[112]. Operating Expenses - Operating expenses rose by 22% to $3,276 million, primarily due to higher personnel and general administrative expenses[93]. - Non-GAAP operating expenses increased by 11% to $2,917 million, driven by similar factors as GAAP operating expenses[94]. - Operating expenses totaled $3,276 million, reflecting a 22% increase from $2,680 million in the prior year[108]. Shareholder Actions - The company repurchased 13 million shares of class A common stock for $3.9 billion, with remaining authorized funds for repurchase at $9.1 billion[97]. - The company repurchased $3.9 billion of its class A common stock during the three months ended December 31, 2024[116]. - A quarterly cash dividend of $1.2 billion was declared and paid to common and preferred stockholders[117]. Acquisitions - The company acquired Featurespace Limited for $946 million, enhancing its capabilities in real-time AI payments protection technology[95]. - The company acquired Featurespace for $946 million in December 2024[118]. Taxation - The effective income tax rate for the period was 17.4%, with a total income tax provision of $1,081 million[101]. - The effective income tax rate decreased to 17% from 19% year-over-year[110]. Market and Regulatory Changes - The Financial Accounting Standards Board (FASB) issued ASU 2023-07 in November 2023, enhancing reportable segment disclosure requirements, effective for annual periods beginning October 1, 2024[119]. - ASU 2023-09, issued in December 2023, improves income tax disclosures, effective for annual periods beginning October 1, 2025[120]. - ASU 2024-03, issued in November 2024, requires additional disclosure about specific expense categories, effective for annual periods beginning October 1, 2027[121]. - There have been no significant changes to market risks since September 30, 2024[122]. Transaction Volume - For the three months ended December 31, 2024, processed transactions and nominal payments volume contributed to revenue growth, while exchange rate movements had no material impact[92]. - Total nominal payments volume increased by 5% year-over-year to $1,649 billion in the U.S. and $1,760 billion internationally[104].

Financial Performance - Net revenue for Q1 2025 increased to $9.51 billion, up from $8.634 billion in Q1 2024, reflecting a growth of approximately 10.1%[24][27] - Operating income for Q1 2025 reached $6.234 billion, compared to $5.954 billion in Q1 2024, showing a 4.7% increase[24][27] - Net income for Q1 2025 was $5.119 billion, up from $4.89 billion in Q1 2024, marking a 4.7% growth[24][27] - Total operating expenses for Q1 2025 were $3.276 billion, compared to $2.68 billion in Q1 2024, reflecting a 22.2% increase[24][27] Balance Sheet and Cash Flow - Total assets as of December 31, 2024, were $91.888 billion, a decrease from $94.511 billion as of September 30, 2024[23] - Cash and cash equivalents increased to $12.367 billion as of December 31, 2024, from $11.975 billion as of September 30, 2024[23] - Long-term debt decreased to $16.68 billion as of December 31, 2024, from $20.836 billion as of September 30, 2024[23] - Net cash provided by operating activities for Q1 2025 was $5.396 billion, up from $3.614 billion in Q1 2024[26] Shareholder Returns - Repurchases of Class A common stock in Q1 2025 amounted to $4.011 billion, compared to $3.58 billion in Q1 2024[26] - Dividends paid in Q1 2025 were $1.17 billion, up from $1.06 billion in Q1 2024[26]

Earnings Report - Visa Inc. is set to release its first-quarter earnings results on January 30, 2025, after the market closes [1] - Analysts anticipate quarterly earnings of $2.66 per share, an increase from $2.41 per share in the same period last year [1] - The company is projected to report revenue of $9.34 billion for the recent quarter, compared to $8.63 billion a year earlier [1] - Visa has exceeded revenue estimates in nine of the last ten quarters [1] Stock Performance - Visa shares increased by 0.4% to close at $335.88 on Wednesday [2] Analyst Ratings - Wells Fargo analyst Donald Fandetti maintained an Overweight rating and raised the price target from $325 to $360 [3] - Morgan Stanley analyst James Faucette maintained an Overweight rating and increased the price target from $326 to $371 [3] - Keefe, Bruyette & Woods analyst Sanjay Sakhrani maintained an Outperform rating and raised the price target from $335 to $360 [3] - Barclays analyst Raimo Lenschow maintained an Overweight rating and increased the price target from $319 to $347 [3] - Mizuho analyst Dan Dolev maintained a Neutral rating and raised the price target from $279 to $292 [3]

Core Insights - Visa is implementing ServiceNow's Dispute Management solution to enhance payment card dispute resolutions and ensure compliance for issuers [1][2] - The collaboration aims to accelerate the dispute resolution process, improving service speed and efficiency for customers [2][3] - The partnership builds on a previous five-year strategic agreement focused on transforming payment services and launching dispute resolution solutions [4] Company Initiatives - Visa will utilize the ServiceNow platform, which incorporates AI capabilities to optimize contact center efficiency and boost employee productivity [2][4] - The new solution is expected to address the increasing volume of disputes in the financial services industry [3] Industry Context - Card disputes are critical moments that can significantly impact customer loyalty, with 52% of consumers indicating that quick processing of disputes is vital for satisfaction [5] - Among frequent card users, 86% are likely to continue using cards that effectively manage disputes, highlighting the importance of efficient dispute resolution in customer retention [5]

Core Insights - Visa is expected to report quarterly earnings of $2.66 per share, reflecting a 10.4% increase year-over-year, with revenues projected at $9.34 billion, an 8.2% increase compared to the previous year [1] Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised down by 0.3%, indicating a reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions to the stock [3] Revenue Projections - Analysts predict 'Service revenues' will reach $4.23 billion, an 8% increase year-over-year [5] - 'Data processing revenues' are expected to be $4.79 billion, indicating a 10% year-over-year change [5] - 'International transaction revenues' are projected at $3.39 billion, reflecting a 12.2% increase from the prior year [5] - 'Other revenues' are estimated at $829.74 million, suggesting a 19.9% year-over-year change [6] Transaction Metrics - The total estimated transaction volume is $4,124.59 billion, up from $3,910 billion in the same quarter last year [7] - 'Payments Volume - Europe' is expected to reach $706.87 billion, compared to $636 billion a year ago [7] - 'Payments volume - Canada' is projected at $108.83 billion, up from $103 billion [8] - 'Payments volume - U.S.A' is forecasted to be $1,692.71 billion, compared to $1,603 billion last year [8] - 'Payments volume - CEMEA' is expected to reach $208.72 billion, up from $179 billion [8] - 'Payments volume - LAC' is projected at $259.26 billion, compared to $230 billion last year [9] - 'Payments volume - Asia Pacific' is expected to be $527.24 billion, slightly up from $525 billion [9] Market Performance - Over the past month, Visa shares have returned +5.8%, outperforming the Zacks S&P 500 composite's +1.7% [9]

Group 1 - Visa Inc is partnering with social media platform X (formerly Twitter) to launch a digital wallet and other products, aligning with CEO Elon Musk's vision for a multi-service application [1] - Visa's stock reached a record high of $337.83, reflecting a 26.3% increase over the last six months, and is on track for its fourth gain in five sessions [2] - The 50-day call/put volume ratio for Visa is 2.10, indicating a strong preference for call options among traders over the past 10 weeks [3] Group 2 - Today's options activity shows 59,000 calls and 27,000 puts traded, which is five times the average intraday volume, with the most popular contract being the weekly 1/31 185-strike call [4]

Core Insights - Visa Inc. has partnered with Elon Musk's social media platform, X, to launch a real-time payment service called "X Money Account," expected to debut in 2025 [1][2] - The initiative aims to transform X into an "everything app," integrating various functionalities including payments, similar to China's WeChat [2] - The collaboration seeks to create new revenue streams for X, reducing reliance on advertising income and positioning it to compete with established payment service providers like Zelle and PayPal's Venmo [3] Visa's Strategic Positioning - The partnership with X allows Visa to maintain relevance in the competitive fintech landscape against rivals like PayPal and Apple Pay [4] - Visa stands to gain early access to a potentially large user base, as millions of X users may utilize Visa's network through the integration with Visa Direct [4] - The collaboration is expected to rejuvenate Visa's transaction growth, with total processed transactions projected to grow 9.9% year-over-year in fiscal 2025 [5][6] Market Dynamics - The digital payments sector has seen rapid growth, accelerated by the COVID pandemic, prompting Visa and Mastercard to compete for a larger market share [6] - The partnership with X could provide Visa with a first-mover advantage in the fintech space, enhancing its position in the financial transaction services market [6] - If X expands into international remittances or crypto-backed payments, Visa could further benefit from increased cross-border transaction volumes [7] Future Outlook - Successful execution of the X Money service could position both Visa and X as dominant players in the evolving digital payments landscape [8] - Key factors for success include seamless payment integration, building user trust, and expanding merchant support [8]