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    V
    Earnings call· Mar 2025(Q2 FY25)

    VISA INC. V

    Apr 29, 2025 Source

    Executive summary

    Visa Q2 FY25 — Strong Growth in Net Revenue and EPS, Resilient Consumer Spending

    Visa delivered strong Q2 FY25 results, driven by resilient consumer spending and growth across its core payments, commercial, and value-added services segments. The company remains confident in its diverse business model and strategic investments despite macroeconomic uncertainties, preparing to adjust as needed while focusing on client solutions and product innovation.

    Highlights

    5

    • Net revenue grew 9% year-over-year to $9.6 billion.

    • EPS increased 10% year-over-year.

    • Cross-border volume, excluding intra-Europe, rose 13% in constant dollars.

    • Processed transactions grew 9% year-over-year.

    • Value-added services revenue grew 22% in constant dollars to $2.6 billion.

    Concerns

    3

    • Cross-border volume growth moderated from Q1 to Q2 due to lapping leap year, timing of Ramadan/Easter, weaker currencies, and softer Canada-to-U.S. travel.

    • Client incentives grew 15%, which was lower than expected primarily due to factors related to deal timing.

    • EPS experienced an approximately 1.5 point drag from exchange rates and an approximately 0.5 point drag from acquisitions.

    Guidance & targets

    9
    CategoryTargetConfidence
    Adjusted Net Revenue Growth
    low double digits
    high materiality
    High
    Adjusted Operating Expense Growth
    low double digits
    medium materiality
    High
    Nonoperating Income
    approximately $150 million
    medium materiality
    High
    Tax Rate
    between 17% and 17.5%
    medium materiality
    High
    Adjusted EPS Growth
    high teens
    high materiality
    High
    Acquisition Impact on Net Revenue Growth
    minimal benefit
    low materiality
    High
    Acquisition Impact on Operating Expense Growth
    approximately 1 point contribution
    low materiality
    High
    Acquisition Impact on EPS Growth
    approximately 0.5 point headwind
    low materiality
    High
    Full Year Guidance
    unchanged
    high materiality
    High

    Operational metrics

    23
    Net Revenue Growth
    9%YoY
    Q2 FY25

    Reported net revenue growth for the quarter.

    EPS Growth
    10%YoY
    Q2 FY25

    Reported EPS growth for the quarter, with currency and acquisition impacts noted.

    Global Payments Volume Growth
    8%YoY
    Q2 FY25

    Overall payments volume growth.

    U.S. Payments Volume Growth
    6%YoY
    Q2 FY25

    Payments volume growth in the U.S., with credit and debit splits.

    International Payments Volume Growth
    9%YoY
    Q2 FY25

    Payments volume growth outside the U.S.

    Processed Transactions Growth
    9%YoY
    Q2 FY25

    Growth in total processed transactions.

    Total Credentials Growth
    7%
    Q2 FY25

    Growth in the total number of credentials.

    Total Tokens
    13.7 billion1 billion added since last quarter
    Q2 FY25

    Total number of tokens, with recent additions and regional milestones.

    Tap to Phone Transacting Device Terminals Added
    nearly 2 millionsince last quarter
    Q2 FY25

    Number of new Tap to Phone terminals, indicating expansion of acceptance.

    Tap to Pay Penetration
    76%
    Q2 FY25

    Penetration rate of Tap to Pay technology globally and in the U.S.

    Commercial Volume Growth
    6%YoY
    Q2 FY25

    Growth in commercial payments volume.

    Visa Direct Transactions Growth
    28%YoY
    Q2 FY25

    Growth in Visa Direct transactions, moderated from Q1 due to lapping initial ramp in Latin America and leap year.

    CMS Revenue Growth
    13%YoY
    Q2 FY25

    Revenue growth for Commercial and Money Movement Solutions.

    Operating Expenses Growth
    7%
    Q2 FY25

    Growth in operating expenses, lower than expected due to timing and FX.

    Tax Rate
    16.9%
    Q2 FY25

    Effective tax rate for the quarter.

    Stock Buyback Executed
    $4.5 billion
    Q2 FY25

    Amount of stock repurchased during the quarter.

    Dividends Distributed
    $1.2 billion
    Q2 FY25

    Total dividends paid to stockholders during the quarter.

    Stock Buyback Authorization Remaining
    $4.7 billion
    as of March end

    Remaining amount under the existing share repurchase authorization.

    New Share Repurchase Program
    $30 billion
    multiyear

    New multiyear share repurchase program authorized in April.

    U.S. Payment Volume Growth
    8%YoY
    Q3 FY25 (through April 21)

    U.S. payment volume growth for the first part of Q3, benefiting from Easter/Ramadan timing.

    Processed Transactions Growth
    12%YoY
    Q3 FY25 (through April 21)

    Processed transactions growth for the first part of Q3.

    Cross-Border Volume Growth (ex-intra-Europe)
    13%YoY
    Q3 FY25 (through April 21)

    Cross-border volume growth for the first part of Q3, with travel and e-commerce components.

    Cumulative Stablecoin Settlement Volume
    $200 million
    cumulative

    Cumulative volume settled using stablecoins, a milestone for Visa's digital asset strategy.

    Industry KPIs

    8
    MetricValueDetails
    Capital returns$4.5 billionUSD
    Cross border volume13%%
    Payments volume gdv8%%
    Client incentives rebates15%%
    Cards in force credentials7%%
    Net revenue yield take rate—
    Value added services revenue$2.6 billionUSD
    Switched processed transactions9%%

    Product announcements

    7
    ProductTypeDetails
    Scotiabank Passport Visa Infinite Privilege cardlaunch
    Tap to P2P with Samsunglaunch
    Visa Tokenized Asset Platformlaunch
    Authorize.net new versionlaunch
    Unified Checkout experiencelaunch
    ARIC Risk Hub (Featurespace)update
    Tink's Pay by Bank capabilitymilestone

    Deals & partnerships

    14
    EfectyAgreement to launch 4.5 million consumer debit cards and build acceptance with cash agents.

    Efecty is one of the biggest cash networks in Colombia with over 30 million users.

    Banco de la NaciónLaunch an open-loop SUBE Visa card for use on public transportation.

    Transit deal in Argentina to convert closed loop to open loop opportunities.

    Metro PagoLaunch an open-loop Visa card and add acceptance locations at transit stops.

    Transit deal in Chile to convert closed loop to open loop opportunities.

    Lloyds with TauliaIssue and embed Visa virtual cards in SAP ERP and procure-to-pay workflows of their customers.

    Aims to capture accounts receivable and accounts payable opportunities using embedded finance solutions.

    ItaúSupporting their card-as-a-service platform.

    Platform offers credit and debit card issuance, product life cycle management, and digital accounts to businesses across various sectors.

    LianLian GlobalExpanded agreement to launch a B2B travel solution in Hong Kong and utilize Visa Direct's multicurrency capabilities.

    Supports end-to-end collections and payouts for B2B travel.

    Jack HenryOffer Visa Direct through their digital applications to facilitate rapid transfers among bank accounts.

    Enables community and regional financial institution clients to offer Visa Direct to consumer account holders and SMBs.

    Checkout.comFirst acquirer in the U.A.E. to launch Visa Direct's push-to-card solution.

    Enhances real-time money transfer capabilities for both cross-border and domestic transactions.

    TabaPayExpanded agreement for Visa Direct to enable push-to-account and wallet in addition to push to card.

    TabaPay is a money movement platform serving more than 6,500 fintechs and enterprises in the U.S.

    DecathlonVisa became the payment service provider of choice, using its gateway and decision manager capabilities for e-commerce.

    Decathlon is a sporting goods retailer with over 2,000 stores in nearly 80 countries.

    Raiffeisen Bank InternationalLaunched the Travelcentive travel platform, leveraging Visa solutions and adding Visa's Priority Pass benefits to customers.

    Based in Austria, enhancing card benefits for customers.

    NequiDeal for Issuing Solutions (Pismo).

    Located in Colombia, part of Pismo's expansion into new countries.

    T2PDeal for Issuing Solutions (Pismo).

    Located in Thailand, part of Pismo's expansion into new countries.

    Zenith ForexDeal for Issuing Solutions (Pismo).

    Located in India, part of Pismo's expansion into new countries.

    Risks & headwinds

    4
    Macroeconomic uncertainty and tariffs

    potential impacts from tariffs have led to higher levels of economic uncertainty

    Mitigation: Business model diversity and resilience, readiness to make thoughtful adjustments to investment profile and product pipeline.

    Currency weaknessQ2 FY25

    weaker currencies in certain countries

    Mitigation: Diversification of cross-border business across regions and spend types, hedging strategies.

    Deceleration in specific spend categoriesQ2 FY25

    travel and entertainment growth decelerate

    Mitigation: Overall discretionary and nondiscretionary spend remains strong; diversification across spend bands and categories.

    Geopolitical backdrop and nationalismongoing

    challenging and uncertain environment

    Mitigation: Regular engagement with governments and regulators, world-class government engagement team, tailored strategies for highly regulated markets, education of officials on global payments complexities.

    What to watch in Q3 FY25

    5

    Adjusted Net Revenue Growth

    Q3 FY25
    Current11% (constant dollars, Q2 FY25)
    Targetlow double digits

    Why it matters

    This is a key indicator of overall business health and ability to meet guidance in a dynamic macro environment.

    Pulling it all together, we expect third quarter adjusted net revenue growth in the low double digits, essentially in line with Q2.

    Q&A highlights

    5

    Has there been any noticeable change in client decision-making, pipelines, or backlog, especially with international clients, and their speed of working with Visa?

    Ryan stated that the primary focus with clients has been sharing data, products, and advisory services to help them navigate the current environment, rather than on new partnership arrangements or deals. He emphasized being at their best with clients during this time.

    “the bulk of the time we've been spending with clients over the last several months has been sharing our data, sharing our products and solutions, working with our advisory teams, really helping them to navigate this environment.”

    asked by Tien-Tsin Huang · answered by Ryan McInerney

    2 min read6 chapters

    Detailed Narrative

    01

    Consumer Payments Innovation and Acceptance Expansion

    Visa continues to drive cash digitization and expand acceptance globally, notably adding over 1 million merchant locations in India, Mexico, and Brazil in the last year. Innovations like Tap to Everything, tokenization, and account-to-account solutions are enabling growth in high-value use cases. Tap to Phone added nearly 2 million transacting device terminals since last quarter, and Tap to Pay penetration reached 76% globally, with the U.S. passing 60% for the first time.

    02

    Commercial and Money Movement Solutions Growth

    The company saw strong results in commercial and money movement solutions, with commercial volume up 6% in constant dollars and Visa Direct transactions growing 28% to 3 billion. Strategic partnerships, such as with Jack Henry and TabaPay, are expanding Visa Direct's reach for real-time money transfers. Embedded finance solutions, exemplified by the Lloyds and Taulia deal, are capturing accounts receivable and payable opportunities.

    03

    Accelerated Value-Added Services Performance

    Value-added services revenue accelerated to 22% growth in constant dollars, reaching $2.6 billion, driven by strength across Issuing Solutions, Advisory, and the recent Featurespace acquisition. New offerings include a relaunched Authorize.net with AI capabilities for small business checkout and the Unified Checkout experience, designed to enhance merchant acceptance and fraud management for various payment types.

    04

    Advancing Stablecoin and Digital Asset Strategy

    Visa is actively expanding its stablecoin offerings, recently surpassing $200 million in cumulative stablecoin settlement volume. The company developed the Visa Tokenized Asset Platform to enable banks to issue and leverage stablecoins for programmable finance, with a pilot partner, BBVA, planning to launch a stablecoin on the Ethereum blockchain later this year. This highlights Visa's continued investment in digital asset interoperability and programmability.

    05

    Resilient Consumer Spending Amidst Uncertainty

    Despite macroeconomic uncertainties and geopolitical backdrops, consumer spending has remained resilient and strong, particularly in the U.S. All spend bands show consistent growth, with affluent consumers growing fastest. While some travel categories experienced deceleration, overall discretionary and nondiscretionary spend remains robust, reflecting the diverse and resilient business model that has proven effective in various environments.

    06

    Strategic Investment and Operational Flexibility

    Visa remains committed to its product and investment roadmap, confident in opportunities across consumer payments, value-added services, and commercial solutions. The management team is constantly looking at scenarios and is prepared to make thoughtful adjustments to its investment profile and product pipeline should economic conditions shift materially, balancing long-term growth with short-term responsiveness and leveraging its experience in highly regulated markets.

    AI-generated summary of the company’s earnings call. Not investment advice.