10-QPeriod: Q3 FY2015

VISA INC. Quarterly Report for Q3 Ended Jun 30, 2015

Filed July 23, 2015For Securities:V

Summary

Visa Inc. reported solid financial results for the third quarter and first nine months of fiscal year 2015, demonstrating continued growth in its core payments processing business. Total operating revenues increased by 12% and 9% for the respective periods, driven by robust growth in processed transactions and nominal payments volume, as well as the impact of pricing modifications and currency fluctuations. Net income saw a significant increase, up 25% for the quarter and 10% for the nine-month period, reflecting strong operational performance. The company also highlighted its commitment to returning capital to shareholders through share repurchases and dividends, alongside continued investments in technology and infrastructure to support future growth. While facing some headwinds from foreign currency translation and ongoing litigation matters, Visa's financial position remains strong, supported by consistent operating cash flows and a healthy balance sheet.

Financial Highlights

41 data points
Beta

Revenue

$3.52B

Net Income

$1.70B

48.2% Net Margin

Total Assets

$39.43B

Cash & Equivalents

$2.15B

Free Cash Flow

$2.11B

Financial Statements
Beta
Revenue$3.52B
Operating Expenses$1.26B
Operating Income$2.26B
Net Income$1.70B

Key Highlights

  • 1Total operating revenues increased by 12% to $3.5 billion for the three months ended June 30, 2015, and by 9% to $10.3 billion for the nine months ended June 30, 2015, driven by growth in processed transactions and payments volume.
  • 2Net income for the third quarter of fiscal 2015 was $1.7 billion, a 25% increase compared to the prior year, while net income for the first nine months was $4.8 billion, a 10% increase.
  • 3Diluted earnings per share for Class A common stock increased by 28% to $0.69 for the third quarter and by 14% to $1.96 for the nine-month period.
  • 4The company repurchased approximately $1.1 billion of Class A common stock during the quarter and $2.9 billion year-to-date, demonstrating a commitment to shareholder returns.
  • 5A significant tax benefit of $280 million was recognized in the third quarter due to the resolution of uncertain tax positions, positively impacting net income.
  • 6The fair value of the Visa Europe put option increased to $255 million, resulting in a non-cash, non-operating expense of $110 million for the quarter.
  • 7Visa's estimated maximum settlement exposure decreased to $43.9 billion from $56.9 billion, due to regulatory changes reducing the scope of its settlement indemnification.

Frequently Asked Questions

Visa reported a 12% increase in total operating revenues to $3.5 billion for the three months ended June 30, 2015, compared to the same period last year. This growth was primarily driven by increased service revenues, data processing revenues, and international transaction revenues, fueled by higher processed transaction volumes and payment volumes.

Net income for the third quarter of fiscal year 2015 was $1.7 billion, a 25% increase year-over-year. Diluted earnings per share for Class A common stock rose 28% to $0.69. For the nine-month period, net income was $4.8 billion (up 10%) and diluted EPS was $1.96 (up 14%).

Operating expenses increased by 11% to $1.3 billion for the quarter. The primary drivers were higher personnel costs due to increased headcount and incentive compensation, along with increased depreciation and amortization from technology investments. These increases were partially offset by lower marketing and network/processing expenses.

The fair value of the Visa Europe put option increased to $255 million as of June 30, 2015. This resulted in a non-cash, non-operating expense of $110 million recognized in the current quarter, as the fair value of this option is adjusted to market. While the fair value increased, the potential purchase price if the option is exercised could be substantially higher, potentially exceeding $15 billion.