Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Visa Inc (V, Financial) reported strong financial results for the fourth quarter, with net revenue of $9.6 billion, up 12% year-over-year, and EPS up 16%.
- The company saw significant growth in cross-border volume, excluding intra-Europe, which rose 13%, and processed transactions grew 10% year-over-year.
- Visa Inc (V) continues to expand its consumer payments business, with over 4.6 billion credentials, up 7% year-over-year, and 11.5 billion tokens, with more than 30% of total transactions tokenized.
- The company has made significant strides in new flows, with revenue growing 22% year-over-year in constant dollars, and Visa Direct transactions increasing by 38%.
- Visa Inc (V) has successfully renewed and expanded several key partnerships globally, including agreements with major clients like Grupo Pramerica, SMCC, Alrajhi, and Standard Chartered Bank.
Negative Points
- Visa Inc (V) faces regulatory challenges, including a lawsuit by the Department of Justice, which the company believes is meritless.
- The company experienced slower growth in Asia Pacific payments volume, primarily due to macroeconomic conditions, particularly in Mainland China.
- Cross-border travel volume growth was lower than expected, mainly due to challenges in Asia Pacific travel corridors.
- Visa Inc (V) anticipates a significant increase in client incentives in fiscal 2025, which could impact net revenue growth.
- The company expects a step down in adjusted net revenue growth from Q4 2024 to Q1 2025 due to various factors, including increased incentives and the timing of pricing actions.
Q & A Highlights
Q: Can you share your thoughts on the regulatory and litigation environment in the US, and can you help us size your revenue exposure to US debit?
A: Ryan McInerney, CEO: We are engaged with regulators globally to ensure fair competition and multiple options for consumers and merchants. We feel confident in managing this complexity and continuing to grow our business. We do not disclose specific revenue exposure to US debit, but we feel good about our competitive position.
Q: What are your thoughts on the competitive environment, especially regarding pay by bank?
A: Ryan McInerney, CEO: Account-to-account payments are growing globally. Pay by bank is not new, and we expect it to continue proliferating. We believe we can add significant value to these payments and feel confident in our ability to compete and grow.
Q: What growth rate should we expect for commercial volumes going forward?
A: Christopher Suh, CFO: We saw a day's mix impact in Q4, but we are optimistic about the opportunity in new flows. We anticipate continued growth in commercial volumes ahead of consumer volumes over time.
Q: How do you see AI playing into Visa's business model with the Featurespace acquisition?
A: Ryan McInerney, CEO: AI will drive both competitive differentiation and business model uplift. Featurespace will enhance our fraud prevention capabilities. We are adopting AI across our company to drive productivity and are excited about its potential in our product pipeline.
Q: How might growth in 2025 differ from 2024 across consumer payments, new flows, and value-added services?
A: Christopher Suh, CFO: We don't guide by specific segments, but our approach to guidance is based on our best estimates. Key variables include incentives, cross-border volumes, volatility, and macroeconomic conditions. We expect stable growth trends similar to 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
