10-QPeriod: Q1 FY2019

VISA INC. Quarterly Report for Q1 Ended Dec 31, 2018

Filed January 31, 2019For Securities:V

Summary

Visa Inc. reported strong financial results for the quarter ended December 31, 2018, with net revenues reaching $5.5 billion, a 13% increase year-over-year. This growth was driven by a 9% increase in payments volume and an 11% rise in processed transactions, reflecting the global shift towards electronic payments and continued consumer spending. The company also saw robust growth in data processing revenues (15%) and international transaction revenues (11%). Operating expenses increased by 17% to $1.8 billion, primarily due to investments in personnel, marketing, and general administrative costs to support business expansion. Despite increased expenses, Visa maintained strong profitability, with net income growing 18% to $2.98 billion and diluted earnings per share rising 21% to $1.30. The company also demonstrated a strong commitment to returning capital to shareholders, repurchasing $2.4 billion in common stock and declaring a quarterly dividend of $0.25 per share.

Financial Highlights

43 data points
Beta

Revenue

$5.51B

Net Income

$2.98B

54.1% Net Margin

Total Assets

$71.66B

Cash & Equivalents

$8.29B

Free Cash Flow

$3.29B

Financial Statements
Beta
Revenue$5.51B
Operating Expenses$1.79B
Operating Income$3.72B
Net Income$2.98B

Key Highlights

  • 1Net revenues grew 13% to $5.5 billion, driven by a 9% increase in payments volume and 11% growth in processed transactions.
  • 2Data processing revenues and international transaction revenues showed strong growth at 15% and 11% respectively.
  • 3Net income increased by 18% to $2.98 billion, with diluted EPS rising 21% to $1.30.
  • 4Operating expenses increased 17% to $1.8 billion, primarily due to investments in personnel and marketing.
  • 5Visa repurchased $2.4 billion of its common stock during the quarter.
  • 6The company declared a quarterly cash dividend of $0.25 per share.
  • 7The effective income tax rate decreased to 18% from 22% in the prior year, largely due to the impact of the U.S. Tax Cuts and Jobs Act.

Frequently Asked Questions

Visa's revenue growth was primarily driven by an increase in payments volume (up 9%) and a rise in the number of processed transactions (up 11%). This indicates a continued global shift towards electronic payments and robust consumer spending, which are core to Visa's business model.

Operating expenses increased by 17% to $1.8 billion. This increase is attributed to strategic investments in personnel, marketing, and general administrative expenses aimed at supporting future business growth. While expenses are rising, the company is focused on expanding its revenue streams and improving operational efficiency.

Visa is actively returning value to shareholders through share repurchases and dividends. In this quarter, the company repurchased $2.4 billion of its common stock and declared a quarterly cash dividend of $0.25 per share. A new $8.5 billion share repurchase program was authorized in January 2019.

Visa adopted a new revenue recognition standard effective October 1, 2018. This adoption resulted in a reclassification of certain client incentives and marketing-related funds, leading to a reported decrease in net revenues by $52 million and an increase in client incentives expense by $130 million for the quarter. However, the overall impact on net income was a reduction of only $15 million, as the company adjusted other related accounts and expenses.