Visa(V) - 2026 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - Visa reported $40 billion in net revenue for fiscal year 2025, an increase of 11% from the previous year [43] - GAAP earnings per share was $10.20, up 5%, while non-GAAP earnings per share was $11.47, up 14% [44] - The company returned $22.8 billion to shareholders through share repurchases and dividends [44] Business Line Data and Key Metrics Changes - Total volume grew 7% on a constant dollar basis to $16.7 trillion, with total transactions increasing by 8% to 329 billion [44] - Payments volume rose 8% on a constant dollar basis to $14.2 trillion, with payments transactions reaching 313 billion [44] - Cross-border volume grew 13% year-over-year on a constant dollar basis, excluding intra-Europe [45] Market Data and Key Metrics Changes - Visa operates with nearly 14,500 financial institutions and many influential technology and consumer companies [45] - The company sees over $40 trillion in addressable consumer spend, with an estimated $20 trillion annual opportunity in less effective forms of digital payments [46] - In commercial and money movement solutions, Visa identifies a $200 trillion annual volume opportunity, with $145 trillion in B2B [46] Company Strategy and Development Direction - Visa is focused on three growth levers: consumer payments, commercial and money movement solutions, and value-added services [45] - The company aims to tokenize 100% of e-commerce transactions, achieving over 50% tokenization in 2025 [48] - Visa's strategy includes expanding its portfolio of commercial payment solutions and enhancing its capabilities in accounts receivable and payable [52] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in Visa's ability to expand its share in various markets and emphasized the importance of innovation in driving future growth [47][60] - Visa is actively engaging with central banks regarding CBDCs and sees stablecoins as an opportunity to enhance its payment ecosystem [62][64] Other Important Information - Visa's Value-Added Services generated nearly $11 billion in revenue, growing at a compound annual growth rate of over 20% since 2021 [55] - The company has returned over $165 billion to shareholders since its IPO, demonstrating a strong commitment to capital return [69] Q&A Session Summary Question: Why does executive compensation include grants of Visa stock? - Equity awards align executives' interests with shareholders by linking compensation to stock performance and long-term corporate performance [36] Question: How might stablecoins and CBDCs impact Visa's role in the payment ecosystem? - Visa views stablecoins and CBDCs as significant opportunities, particularly in under-penetrated markets, and aims to build a secure interoperable layer between stablecoins and traditional payments [62][63] Question: Can you describe Visa's capital allocation strategy, including share buybacks? - Visa's capital allocation strategy prioritizes business investment, returning 20%-25% of earnings to shareholders through dividends, and returning excess capital through buybacks [66][68]