01—Abstract
Summary
Summary of the 10-Q filed April 26, 2019. Cited figures are marked; the original filing is the authoritative source.
Visa Inc. reported solid financial performance for the quarter and six months ended March 31, 2019.
Net revenues saw a healthy increase of 8%a for the quarter and 11% for the six-month period, driven by growth in payments volume and processed transactions. Operating expenses also increased, primarily due to investments in personnel and ongoing business growth initiatives, but the company maintained strong operating margins. Profitability remained robust, with net income growing by 14% for the quarter and 16% for the six-month period.
Diluted earnings per share (EPS) saw a corresponding increase of 17%b and 19%, respectively. The company continued its strong capital return program, repurchasing a significant amount of its stock and declaring a quarterly dividend. Liquidity remains strong, with ample cash on hand and operating cash flow to meet its obligations and fund future growth.
Key financial and operational metrics indicate continued positive momentum for Visa, driven by the global shift towards electronic payments and the company's extensive network and services. While operating expenses are rising, they are largely in line with strategic investments for future expansion and support of business growth.
02—Key points
Key Highlights
- Net revenues increased by 8% year-over-year to $5.5 billion for the three months ended March 31, 2019, and by 11% to $11.0 billion for the six months ended March 31, 2019.
- Net income grew by 14% to $3.0 billion for the quarter and by 16% to $6.0 billion for the six-month period, demonstrating strong profitability.
- Diluted earnings per share (EPS) rose by 17% to $1.31 for the quarter and by 19% to $2.61 for the six-month period.
- Total operating expenses increased by 7% for the quarter and 11% for the six months, largely due to investments in personnel and general administrative costs supporting business growth.
- The company repurchased approximately $1.9 billion of its Class A common stock during the quarter, with an additional $8.4 billion authorized for future repurchases as of March 31, 2019.
- Visa maintained a strong liquidity position, with cash and cash equivalents, restricted cash, and restricted cash equivalents totaling $10.3 billion at the end of the period.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2019filed April 26, 2019Financial Statements
Q2 FY2019 against Q2 FY2018
| Line item | Q2 FY2019Q2 FY2018 | Change |
|---|---|---|
| Revenue | $5.49B$5.07B | +8.3% |
| Operating Expenses | $1.85B$1.74B | +6.7% |
| Operating Income | $3.64B$3.34B | +9.1% |
| Net Income | $2.98B$2.60B | +14.3% |
05—Questions
Frequently Asked Questions
What were the main drivers of Visa's revenue growth in this period?
Revenue growth was primarily driven by an increase in nominal payments volume (7% and 8% for the three and six months, respectively) and a significant increase in processed transactions (11% for both periods). This reflects the ongoing global shift towards electronic payments and Visa's expanding network services.
How did operating expenses change, and what were the key contributing factors?
Operating expenses increased by 7% for the quarter and 11% for the six months. The primary drivers for this increase were higher personnel expenses due to increased headcount, growth in general and administrative expenses supporting business expansion, and the impact of adopting new revenue recognition standards.
What is Visa's stance on returning capital to shareholders?
Visa continues to actively return capital to shareholders. During the quarter, the company repurchased $1.9 billion of its Class A common stock and declared a quarterly cash dividend of $0.25 per share. As of March 31, 2019, there was approximately $8.4 billion remaining under an authorized share repurchase program.
What is the status of the U.S. and Europe retrospective responsibility plans?
The U.S. retrospective responsibility plan involves an escrow account for certain litigation settlements, with a balance of $899 million at March 31, 2019. The company paid $600 million from this account during the quarter. For the Europe plan, the company recorded $162 million in VE territory covered losses, with $6 million recovered through adjustments to preferred stock conversion rates. The 'right to recover for covered losses' account within equity was $(163) million at quarter-end.
06—Continue