Form 8-K VISA INC. For: Apr 25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 25, 2018
VISA INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware | 001-33977 | 26-0267673 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
P.O. Box 8999 San Francisco, California | 94128-8999 | |
(Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s Telephone Number, Including Area Code: (650) 432-3200
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On April 25, 2018, Visa Inc. (the "Company") issued an earnings release announcing financial results for the Company's fiscal second quarter ended March 31, 2018.
A copy of the earnings release is attached hereto as Exhibit 99.1. All information in the earnings release is furnished but not filed.
On April 25, 2018, the Company will host a conference call to discuss its fiscal second quarter ended March 31, 2018.
A copy of the presentation to be used during the conference call is attached hereto as Exhibit 99.2. All information in the presentation is furnished but not filed.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VISA INC. | |||||
Date: | April 25, 2018 | By: | /s/ Vasant M. Prabhu | ||
Vasant M. Prabhu Chief Financial Officer | |||||
Q2 2018 Results
(Ending March 31, 2018) Alfred F. Kelly, Jr. , Chief Executive Officer, Visa Inc.,
commented on the results:
“Visa had a terrific second quarter. Revenue growth
was better than anticipated and many of our key
business drivers accelerated compared to the first
quarter, including strong growth in cross-border and
payments volume. The fundamentals of our core
business remain robust around the world and our
team continues to execute against the company’s
long-term growth strategy. Based on our first half
results, we are raising our revenue and profit
outlook for the year.”
in billions, except percentages and per share data
USD
($)
YoY Change
(%)
Net Operating Revenues $5.1 13%
GAAP Net Income $2.6 505%
Adjusted Net Income(1) $2.6 26%
GAAP Earnings Per Share $1.11 523%
Adjusted Earnings Per Share(1) $1.11 30%
(1) Adjusted Net Income and Adjusted Earnings Per Share excludes special
items in the prior year.
Q2 2018 Key Business Drivers
(Volume in constant dollars)
Payments volume growth
+11%
Cross-border volume growth
+11%
Processed transactions
+12%
Visa Inc. Reports Fiscal Second Quarter 2018 Results
San Francisco, CA, April 25, 2018 - Visa Inc. (NYSE: V)
GAAP Net Income of $2.6B or $1.11 per share
Net Operating Revenues of $5.1B, an increase of 13%
Double-digit growth in payments volume, cross-border volume and processed transactions
Increased Fiscal Full-Year 2018 Outlook based on strong performance in the first half
Returned $2.5B of capital to shareholders in the form of share repurchases and dividends
Exhibit 99.1
2
Fiscal Second Quarter 2018 — Financial Highlights
GAAP net income in the fiscal second quarter was $2.6 billion or $1.11 per share, increases of 505% and 523%, respectively, over
prior year’s results. Prior year’s results included two special items related to the legal entity reorganization of Visa Europe and the
formation of the Visa Foundation. Excluding these special items, adjusted net income and adjusted earnings per share increased
26% and 30%, respectively, over prior year's adjusted results. Exchange rate shifts versus the prior year positively impacted
earnings per share growth by approximately 2 percentage points. All references to earnings per share assume fully-diluted class
A share count.
Net operating revenues in the fiscal second quarter were $5.1 billion, an increase of 13%, driven by continued growth in payments
volume, cross-border volume and processed transactions. Exchange rate shifts versus the prior year positively impacted reported
net operating revenue growth by approximately 1.5 percentage points.
Payments volume for the three months ended December 31, 2017, on which fiscal second quarter service revenue is recognized,
grew 10% over the prior year on a constant-dollar basis.
Payments volume for the three months ended March 31, 2018, grew 11% over the prior year on a constant-dollar basis.
Cross-border volume growth, on a constant-dollar basis, was 11% for the three months ended March 31, 2018.
Total processed transactions, which represent transactions processed by Visa, for the three months ended March 31, 2018, were
29.3 billion, a 12% increase over the prior year.
Fiscal second quarter service revenues were $2.3 billion, an increase of 13% over the prior year, and are recognized based on
payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data
processing revenues rose 15% over the prior year to $2.1 billion. International transaction revenues grew 19% over the prior year
to $1.8 billion. Other revenues of $230 million rose 13% over the prior year. Client incentives, which are a contra revenue item,
were $1.3 billion and represent 20.3% of gross revenues.
Operating expenses were $1.7 billion for the fiscal second quarter, a 4% increase over the prior year's results, including the special
item related to the charitable donation to the Visa Foundation. Excluding the special item, operating expenses grew 18% over the
prior year, primarily driven by personnel and marketing expenses.
Effective income tax rate was 19.0% for the quarter ended March 31, 2018.
Cash, cash equivalents, and available-for-sale investment securities were $14.2 billion at March 31, 2018.
The weighted-average number of diluted shares of class A common stock outstanding was 2.34 billion for the quarter ended
March 31, 2018.
3
Fiscal Second Quarter 2018 — Other Notable Items
On March 7, 2018, the Company acquired Fraedom, a Software-as-a-Service technology company providing payments and
transaction management solutions for financial institutions and their corporate customers. The acquisition will strengthen and
expand Visa’s business solutions to meet the evolving needs of the Business-to-Business payments industry.
During the three months ended March 31, 2018, the Company repurchased 16.9 million shares of class A common stock, at an
average price of $120.39 per share, using $2.0 billion of cash on hand. In the six months ended March 31, 2018, the Company
repurchased a total of 32.4 million shares of class A common stock, at an average price of $115.73 per share, using $3.75 billion
of cash on hand. The Company has $7.5 billion of funds available for share repurchase as of March 31, 2018.
On April 17, 2018, the board of directors declared a quarterly cash dividend of $0.21 per share of class A common stock
(determined in the case of class B and C common stock and series B and C convertible participating preferred stock on an as-
converted basis) payable on June 5, 2018, to all holders of record as of May 18, 2018.
Financial Outlook for Fiscal Full-Year 2018
Visa Inc. updates its financial outlook for fiscal full-year 2018:
Annual net revenue growth: Low double-digits on a nominal basis, with approximately 1 percentage point of positive
foreign currency impact;
Client incentives as a percentage of gross revenues: 21.5% to 22.0% range;
Annual operating expense growth: Low double-digits adjusted for special items in fiscal 2017 (see note below);
Annual operating margin: High 60s;
GAAP and adjusted effective tax rate: 21% to 22% range, which includes a 6 percentage point reduction resulting from
U.S. tax reform; and
Annual diluted class A common stock earnings per share growth including the impact of U.S. tax reform: Low-60's on a
GAAP nominal dollar basis and high-20's on an adjusted, non-GAAP nominal dollar basis (see note below). Both include
approximately 9 to 10 percentage points driven by U.S. tax reform and approximately 1.5 percentage points of positive
foreign currency impact.
Note: The financial outlook for fiscal full-year 2018 includes Visa Europe integration expenses of approximately $60 million for the
full-year. Annual operating expense growth is derived from adjusted full-year 2017 operating expenses of $6.0 billion. Annual
adjusted diluted class A common stock earnings per share growth is derived from adjusted full-year 2017 earnings per share results
of $3.48. Refer to the accompanying financial tables for further details and a reconciliation of the adjusted fiscal full-year 2017
results.
Fiscal Second Quarter 2018 Earnings Results Conference Call Details
Visa’s executive management team will host a live audio webcast beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific
Time) today to discuss the financial results and business highlights. All interested parties are invited to listen to the live webcast
at http://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days. Investor
information, including supplemental financial information, is available on Visa Inc.’s Investor Relations website at
http://investor.visa.com.
4
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of
1995 that relate to, among other things, our future operations, prospects, developments, strategies, business growth and financial
outlook for fiscal full-year 2018. Forward-looking statements generally are identified by words such as “believes,” “estimates,”
“expects,” “intends,” “may,” “projects,” “outlook”, “could,” “should,” “will,” “continue” and other similar expressions. All statements
other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are
not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond
our control and are difficult to predict.
Actual results could differ materially from those expressed in, or implied by, our forward-looking statements due to a variety of
factors, including, but not limited to:
increased oversight and regulation of the global payments industry and our business;
impact of government-imposed restrictions on payment systems;
outcome of tax, litigation and governmental investigation matters;
increasingly intense competition in the payments industry, including competition for our clients and merchants;
proliferation and continuous evolution of new technologies and business models;
our ability to maintain relationships with our clients, merchants and other third parties;
brand or reputational damage;
management changes;
impact of global economic, political, market and social events or conditions;
exposure to loss or illiquidity due to settlement guarantees;
uncertainty surrounding the impact of the United Kingdom’s withdrawal from the European Union;
cyber security attacks, breaches or failure of our networks;
failure to maintain interoperability with Visa Europe’s systems and to migrate European activity onto VisaNet successfully;
our ability to successfully integrate and manage our acquisitions and other strategic investments; and
other factors described in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on
Form 10-K for the year ended September 30, 2017, and our subsequent reports on Forms 10-Q and 8-K.
Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information,
future events or otherwise.
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative,
reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing
network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000
transaction messages a second. Our relentless focus on innovation is a catalyst for the rapid growth of connected commerce on
any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog
to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more
information, visit usa.visa.com/about-visa.html, visacorporate.tumblr.com and @VisaNews.
Contacts Investor Relations Mike Milotich, 650-432-7644,
[email protected]
Media Relations
Will Stickney, 415-805-4892,
[email protected]
5
Fiscal Second Quarter 2018 — Financial Summary
YoY Change
GAAP Adjusted
Operating Revenues
Service revenues 2,253$ 13% 13%
Data processing revenues 2,127 15% 15%
International transaction revenues 1,752 19% 19%
Other revenues 230 13% 13%
Client incentives (1,289) 25% 25%
Net operat ing revenues 5,073 13% 13%
Operating Expenses
Personnel 824 17 % 17 %
Marketing 261 35 % 35 %
Network and processing 169 13 % 13 %
Professional fees 108 30 % 30 %
Depreciation and amortization 153 17 % 17 %
General and administrative 222 (45%) 4 %
Litigation provision — (100%) (100%)
Total operating expenses 1 ,737 4% 18%
Operating income 3,336 19% 11%
Non-operating income (expense) (119) 13% 13%
Effective Tax Rate 19.0% (65 ppts) (10 ppts)
Net income 2,605 505% 26%
Earnings Per Share 1 .1 1$ 523% 30%
YoY Change
Constant Nominal
Payments volume 11% 15%
Cross-border volume 11% 21%
Processed Transactions 12% 12%
Q2 FISCAL 2018 KEY BUSINESS DRIVERS
Three Months Ended
March 31 , 2018
(in millions, except percentages and
per share data)
Q2 FISCAL 2018 INCOME STATEMENT SUMMARY
6
Visa Inc. Consolidated Balance Sheets (unaudited)
March 31,
2018
September 30,
2017
(in millions, except par value data)
Assets
Cash and cash equivalents $ 8,142 $ 9,874
Restricted cash—U.S. litigation escrow 884 1,031
Investment securities:
Trading 94 82
Available-for-sale 3,483 3,482
Settlement receivable 2,501 1,422
Accounts receivable 1,259 1,132
Customer collateral 1,250 1,106
Current portion of client incentives 331 344
Prepaid expenses and other current assets 592 550
Total current assets 18,536 19,023
Investment securities, available-for-sale 2,602 1,926
Client incentives 566 591
Property, equipment and technology, net 2,366 2,253
Other assets 1,063 1,226
Intangible assets, net 28,537 27,848
Goodwill 15,372 15,110
Total assets $ 69,042 $ 67,977
Liabilities
Accounts payable $ 136 $ 179
Settlement payable 3,052 2,003
Customer collateral 1,250 1,106
Accrued compensation and benefits 530 757
Client incentives 2,512 2,089
Accrued liabilities 1,241 1,129
Current maturities of long-term debt — 1,749
Accrued litigation 830 982
Total current liabilities 9,551 9,994
Long-term debt 16,624 16,618
Deferred tax liabilities 5,110 5,980
Deferred purchase consideration 1,367 1,304
Other liabilities 2,287 1,321
Total liabilities 34,939 35,217
Equity
Preferred stock, $0.0001 par value, 25 shares authorized and 5 shares issued and outstanding as follows:
Series A convertible participating preferred stock, none issued — —
Series B convertible participating preferred stock, 2 shares issued and outstanding at March 31, 2018 and September
30, 2017 (the “UK&I preferred stock”) 2,295 2,326
Series C convertible participating preferred stock, 3 shares issued and outstanding at March 31, 2018 and September
30, 2017 (the “Europe preferred stock”) 3,181 3,200
Class A common stock, $0.0001 par value, 2,001,622 shares authorized, 1,790 and 1,818 shares issued and outstanding at
March 31, 2018 and September 30, 2017, respectively — —
Class B common stock, $0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at March 31, 2018 and
September 30, 2017 — —
Class C common stock, $0.0001 par value, 1,097 shares authorized, 12 and 13 shares issued and outstanding at March 31,
2018 and September 30, 2017, respectively — —
Right to recover for covered losses (6) (52 )
Additional paid-in capital 16,713 16,900
Accumulated income 10,192 9,508
Accumulated other comprehensive income (loss), net:
Investment securities, available-for-sale 93 73
Defined benefit pension and other postretirement plans (77) (76 )
Derivative instruments classified as cash flow hedges (51) (36 )
Foreign currency translation adjustments 1,763 917
Total accumulated other comprehensive income, net 1,728 878
Total equity 34,103 32,760
Total liabilities and equity $ 69,042 $ 67,977
7
Visa Inc. Consolidated Statements of Operations (unaudited)
Three Months Ended
March 31,
Six Months Ended
March 31,
2018 2017 2018 2017
(in millions, except per share data)
Operating Revenues
Service revenues $ 2,253 $ 1,993 $ 4,399 $ 3,911
Data processing revenues 2,127 1,843 4,274 3,735
International transaction revenues 1,752 1,469 3,418 2,958
Other revenues 230 203 459 406
Client incentives (1,289) (1,031 ) (2,615) (2,072)
Net operating revenues 5,073 4,477 9,935 8,938
Operating Expenses
Personnel 824 704 1,503 1,275
Marketing 261 193 484 411
Network and processing 169 150 329 295
Professional fees 108 83 200 163
Depreciation and amortization 153 131 298 277
General and administrative 222 406 458 592
Litigation provision — 2 — 17
Total operating expenses 1,737 1,669 3,272 3,030
Operating income 3,336 2,808 6,663 5,908
Non-operating Income (Expense)
Interest expense (153) (135 ) (307) (275)
Other 34 29 100 48
Total non-operating expense (119) (106 ) (207) (227)
Income before income taxes 3,217 2,702 6,456 5,681
Income tax provision 612 2,272 1,329 3,181
Net income $ 2,605 $ 430 $ 5,127 $ 2,500
Basic earnings per share
Class A common stock $ 1.12 $ 0.18 $ 2.19 $ 1.04
Class B common stock $ 1.84 $ 0.30 $ 3.61 $ 1.71
Class C common stock $ 4.46 $ 0.72 $ 8.76 $ 4.15
Basic weighted-average shares outstanding
Class A common stock 1,798 1,854 1,805 1,857
Class B common stock 245 245 245 245
Class C common stock 12 15 13 16
Diluted earnings per share
Class A common stock $ 1.11 $ 0.18 $ 2.19 $ 1.04
Class B common stock $ 1.84 $ 0.29 $ 3.60 $ 1.71
Class C common stock $ 4.46 $ 0.72 $ 8.74 $ 4.14
Diluted weighted-average shares outstanding
Class A common stock 2,337 2,406 2,345 2,413
Class B common stock 245 245 245 245
Class C common stock 12 15 13 16
8
Visa Inc. Consolidated Statements of Cash Flows (unaudited)
Six Months Ended March 31,
2018 2017
(in millions)
Operating Activities
Net income $ 5,127 $ 2,500
Adjustments to reconcile net income to net cash provided by operating activities:
Client incentives 2,615 2,072
Share-based compensation 153 116
Depreciation and amortization of property, equipment, technology and intangible assets 298 277
Deferred income taxes (945) 1,700
Right to recover for covered losses recorded in equity (4) (163)
Charitable contribution of Visa Inc. shares — 192
Other (13) 23
Change in operating assets and liabilities:
Settlement receivable (1,039) (1,946)
Accounts receivable (113) (40)
Client incentives (2,177) (2,306)
Other assets (103) (301)
Accounts payable (26) (83)
Settlement payable 986 883
Accrued and other liabilities 975 (35)
Accrued litigation (152) 15
Net cash provided by operating activities 5,582 2,904
Investing Activities
Purchases of property, equipment, technology and intangible assets (354) (317)
Investment securities, available-for-sale:
Purchases (2,342) (1,083)
Proceeds from maturities and sales 1,771 3,972
Acquisition of business, net of cash received (196) (302)
Purchases of / contributions to other investments (16) (2)
Net cash (used in) provided by investing activities (1,137) 2,268
Financing Activities
Repurchase of class A common stock (3,850) (3,469)
Repayments of long-term debt (1,750) —
Dividends paid (948) (795)
Payments from litigation escrow account—U.S. retrospective responsibility plan 150 —
Cash proceeds from issuance of common stock under employee equity plans 103 87
Restricted stock and performance-based shares settled in cash for taxes (88) (66)
Net cash used in financing activities (6,383) (4,243)
Effect of exchange rate changes on cash and cash equivalents 206 (121)
(Decrease) increase in cash and cash equivalents (1,732) 808
Cash and cash equivalents at beginning of period 9,874 5,619
Cash and cash equivalents at end of period $ 8,142 $ 6,427
Supplemental Disclosure
Income taxes paid, net of refunds $ 1,197 $ 1,611
Interest payments on debt $ 276 $ 244
Accruals related to purchases of property, equipment, technology and intangible assets $ 21 $ 37
9
Visa Inc. Fiscal 2018 and 2017 Quarterly Results of Operations
(unaudited)
Fiscal 2018 Quarter Ended Fiscal 2017 Quarter Ended
March 31,
2018
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
(in millions)
Operating Revenues
Service revenues $ 2,253 $ 2,146 $ 2,116 $ 1,948 $ 1,993
Data processing revenues 2,127 2,147 2,067 1,984 1,843
International transaction revenues 1,752 1,666 1,792 1,571 1,469
Other revenues 230 229 226 209 203
Client incentives (1,289) (1,326) (1,346) (1,147) (1,031)
Net operating revenues 5,073 4,862 4,855 4,565 4,477
Operating Expenses
Personnel 824 679 655 698 704
Marketing 261 223 290 221 193
Network and processing 169 160 167 158 150
Professional fees 108 92 144 102 83
Depreciation and amortization 153 145 147 132 131
General and administrative 222 236 238 230 406
Litigation provision — — 2 — 2
Total operating expenses 1,737 1,535 1,643 1,541 1,669
Operating income 3,336 3,327 3,212 3,024 2,808
Non-operating Income (Expense)
Interest expense (153) (154) (148) (140) (135)
Other 34 66 35 30 29
Total non-operating expense (119) (88) (113) (110) (106)
Income before income taxes 3,217 3,239 3,099 2,914 2,702
Income tax provision 612 717 959 855 2,272
Net income $ 2,605 $ 2,522 $ 2,140 $ 2,059 $ 430
10
Visa Inc. Reconciliation of Non-GAAP Financial Results
Fiscal Second Quarter of 2018 (unaudited)
Our financial results for the six months ended March 31, 2018 and the three and six months ended March 31, 2017 reflect the impact
of certain significant items that we believe were not indicative of our operating performance in these or future periods, as they
were either non-recurring or had no cash impact. As such, we believe the presentation of adjusted financial results excluding the
following items provides a clearer understanding of our operating performance for the periods presented. There were no
comparable adjustments recorded for the three months ended March 31, 2018.
• Remeasurement of deferred tax balances. During the six months ended March 31, 2018, in connection with the Tax Cuts
and Jobs Act's reduction of the corporate income tax rate, we remeasured our net deferred tax liabilities as of the
enactment date, resulting in the recognition of a non-recurring, non-cash income tax benefit estimated to be
approximately $1.1 billion.
• Transition tax on foreign earnings. During the six months ended March 31, 2018, in connection with the Tax Cuts and Jobs
Act’s requirement that we include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable
income, we recorded a one-time transition tax estimated to be approximately $1.1 billion.
• Elimination of deferred tax balances. During the three and six months ended March 31, 2017, in connection with our legal
entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe,
resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion.
• Charitable contribution. During the three and six months ended March 31, 2017, associated with our legal entity
reorganization, we recognized a non-recurring, non-cash general and administrative expense of $192 million, before tax,
related to the charitable donation of Visa Inc. shares that were acquired as part of the Visa Europe acquisition and held as
treasury stock. Net of the related cash tax benefit of $71 million, determined by applying applicable tax rates, adjusted net
income increased by $121 million.
11
Visa Inc. Reconciliation of Non-GAAP Financial Results – continued
Fiscal Second Quarter of 2018 (unaudited)
Adjusted financial results are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated
in accordance with U.S. GAAP. The following table reconciles our as-reported financial measures calculated in accordance with U.S.
GAAP, to our respective non-GAAP adjusted financial measures for the six months ended March 31, 2018 and the three and six
months ended March 31, 2017. There were no comparable adjustments recorded for the three months ended March 31, 2018.
Six Months Ended March 31, 2018
(in millions, except percentages and per share data)
Operating
Expenses
Operating
Margin
(1),(2)
Income
Before
Income
Taxes
Income Tax
Provision
Effective
Income Tax
Rate(1) Net Income
Diluted
Earnings Per
Share(1)
As reported $ 3,272 67 % $ 6,456 $ 1,329 20.6 % $ 5,127 $ 2.19
Remeasurement of deferred tax balances — — % — 1,133 (1,133) (0.48)
Transition tax on foreign earnings — — % — (1,147) 1,147 0.49
As adjusted $ 3,272 67 % $ 6,456 $ 1,315 20.4 % $ 5,141 $ 2.19
Three Months Ended March 31, 2017
(in millions, except percentages and per share data)
Operating
Expenses
Operating
Margin
(1),(2)
Income
Before
Income
Taxes
Income Tax
Provision
Effective
Income Tax
Rate(1) Net Income
Diluted
Earnings Per
Share(1)
As reported $ 1,669 63 % $ 2,702 $ 2,272 84.1 % $ 430 $ 0.18
Elimination of deferred tax balances — — % — (1,515) 1,515 0.63
Charitable contribution (192) 4 % 192 71 121 0.05
As adjusted $ 1,477 67 % $ 2,894 $ 828 28.6 % $ 2,066 $ 0.86
Six Months Ended March 31, 2017
(in millions, except percentages and per share data)
Operating
Expenses
Operating
Margin
(1),(2)
Income
Before
Income
Taxes
Income Tax
Provision
Effective
Income Tax
Rate(1) Net Income
Diluted
Earnings Per
Share(1)
As reported $ 3,030 66 % $ 5,681 $ 3,181 56.0 % $ 2,500 $ 1.04
Elimination of deferred tax balances — — % — (1,515) 1,515 0.63
Charitable contribution (192) 2 % 192 71 121 0.05
As adjusted $ 2,838 68 % $ 5,873 $ 1,737 29.6 % $ 4,136 $ 1.71
(1) Figures in the table may not recalculate exactly due to rounding. Operating margin, effective income tax rate, diluted earnings per share and their respective totals are calculated
based on unrounded numbers.
(2) Operating margin is calculated as operating income divided by net operating revenues.
12
Visa Inc. Reconciliation of Non-GAAP Financial Results
Fiscal Full-Year 2017 (unaudited)
Our fiscal full-year 2018 annual diluted class A common stock earnings per share growth outlook is based on adjusted non-GAAP
fiscal full-year 2017 results, which are reconciled to their closest comparable U.S. GAAP financial measure below.
Our financial results during the twelve months ended September 30, 2017 reflected the impact of certain significant items that we
do not believe were indicative of our ongoing operating performance in these or future periods, as they were either non-recurring
or have no cash impact. As such, we believe the presentation of adjusted financial results excluding the following items provides a
clearer understanding of our operating performance for the period presented.
• Elimination of deferred tax balances. During the twelve months ended September 30, 2017, in connection with our legal
entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe,
resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion.
• Charitable contribution. During the twelve months ended September 30, 2017, associated with our legal entity
reorganization, we recognized a non-recurring, non-cash general and administrative expense of $192 million, before tax,
related to the charitable donation of Visa Inc. shares that were acquired as part of the Visa Europe acquisition and held as
treasury stock. Net of the related cash tax benefit of $71 million, determined by applying applicable tax rates, adjusted net
income increased by $121 million.
Adjusted financial results are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated
in accordance with U.S. GAAP. The following table reconciles our as-reported financial measures calculated in accordance with U.S.
GAAP, to the respective non-GAAP adjusted financial measures for the twelve months ended September 30, 2017.
Twelve Months Ended September 30, 2017
(in millions, except percentages and per share data)
Operating
Expenses
Operating
Margin
(1),(2)
Income
Before
Income
Taxes
Income Tax
Provision
Effective
Income Tax
Rate(1) Net Income
Diluted
Earnings Per
Share(1)
As reported $ 6,214 66 % $ 11,694 $ 4,995 42.7 % $ 6,699 $ 2.80
Elimination of deferred tax balances — — % — (1,515) 1,515 0.63
Charitable contribution (192) 1 % 192 71 121 0.05
As adjusted $ 6,022 67 % $ 11,886 $ 3,551 29.9 % $ 8,335 $ 3.48
(1) Figures in the table may not recalculate exactly due to rounding. Operating margin, effective income tax rate, diluted earnings per share and their respective totals are calculated
based on unrounded numbers.
(2) Operating margin is calculated as operating income divided by net operating revenues.
13
Operational Performance Data
The tables below provide information regarding the available operational results for the 3 months ended March 31, 2018, as well
as the prior four quarterly reporting periods and the 12 months ended March 31, 2018 and 2017, for cards carrying the Visa, Visa
Electron, V PAY and Interlink brands. Sections 1-3 below reflect the acquisition of Visa Europe, with Europe included in Visa Inc.
results effective the 3 months ended September 30, 2016.
1. Branded Volume and Transactions
The tables present regional total volume, payments volume, and cash volume, and the number of payments transactions, cash
transactions, accounts and cards for cards carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-
badged volume and transactions for all periods. Card counts include PLUS proprietary cards. Nominal and constant dollar growth
rates over prior years are provided for volume-based data.
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $589 13.9% 7.0% $468 17.1% 10.0% 6,204 $120 3.2% (3.5%) 888 3 4
Canada 66 13.7% 9.5% 60 13.5% 9.3% 815 6 16.0% 11.7% 11 - -
CEMEA 258 9.5% 6.5% 89 21.6% 17.2% 3,583 170 4.2% 1.6% 1,188 3 3
LAC 254 5.8% 8.2% 107 11.3% 15.7% 3,092 147 2.1% 3.2% 1,168 2 2
US 994 9.3% 9.3% 855 10.2% 10.2% 15,867 139 4.4% 4.4% 973 4 4
Europe 556 20.5% 7.6% 416 22.7% 9.4% 8,387 141 14.4% 2.6% 990 18 21
Visa Inc. 2,716 12.2% 8.1% 1,994 14.9% 10.5% 37,947 722 5.5% 1.8% 5,219 29 35
Visa Credit Programs
US $461 10.2% 10.2% $446 10.5% 10.5% 5,421 $15 0.9% 0.9% 15 - -
International 718 15.4% 9.1% 666 16.0% 9.8% 8,991 51 8.4% 1.0% 208 945 1,096
Visa Inc. 1,179 13.3% 9.5% 1,113 13.7% 10.1% 14,412 66 6.7% 1.0% 224 945 1,096
Visa Debit Programs
US $533 8.6% 8.6% $409 9.8% 9.8% 10,446 $124 4.8% 4.8% 958 - -
International 1,005 13.0% 6.1% 473 22.6% 12.2% 13,089 532 5.6% 1.2% 4,037 1,972 2,186
Visa Inc. 1,538 11.4% 7.0% 881 16.3% 11.1% 23,535 656 5.4% 1.9% 4,995 1,972 2,186
For the 3 Months Ended March 31, 2018
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $588 8.8% 6.0% $468 11.2% 8.2% 6,357 $120 0.3% (2.0%) 917 874 972
Canada 72 15.4% 9.8% 67 15.6% 10.1% 884 5 12.5% 7.1% 11 51 57
CEMEA 271 10.3% 6.7% 89 23.8% 19.1% 3,589 182 4.7% 1.6% 1,271 342 332
LAC 270 8.1% 7.2% 112 14.1% 14.1% 3,154 159 4.3% 2.8% 1,202 429 463
US 1,019 8.6% 8.6% 881 9.6% 9.6% 16,472 137 2.8% 2.8% 957 701 886
Europe 564 15.1% 7.4% 416 17.5% 9.3% 8,745 148 8.8% 2.4% 1,051 485 539
Visa Inc. 2,784 10.2% 7.5% 2,033 12.5% 9.9% 39,201 751 4.3% 1.6% 5,409 2,883 3,250
Visa Credit Programs
US $492 10.8% 10.8% $479 11.3% 11.3% 5,927 $13 (5.9%) (5.9%) 16 267 340
International 732 12.5% 9.0% 678 12.9% 9.6% 9,338 54 7.2% 1.7% 223 671 744
Visa Inc. 1,224 11.8% 9.7% 1,157 12.3% 10.3% 15,265 67 4.3% 0.1% 239 938 1,085
Visa Debit Programs
US $527 6.7% 6.7% $403 7.6% 7.6% 10,545 $124 3.8% 3.8% 941 434 546
International 1,033 10.2% 5.4% 474 17.7% 10.7% 13,390 559 4.5% 1.4% 4,229 1,510 1,620
Visa Inc. 1,560 9.0% 5.9% 877 12.9% 9.2% 23,935 683 4.3% 1.8% 5,170 1,944 2,166
For the 3 Months Ended December 31, 2017
14
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $559 4.0% 4.1% $441 8.2% 9.0% 6,140 $117 (9.3%) (10.7%) 882 849 952
Canada 69 11.8% 7.0% 64 12.0% 7.2% 843 6 9.4% 4.7% 11 50 56
CEMEA 263 10.8% 7.6% 85 24.4% 19.7% 3,447 178 5.4% 2.6% 1,258 346 334
LAC 254 7.4% 6.8% 102 11.5% 11.8% 2,998 152 4.9% 3.7% 1,145 433 465
US 978 8.2% 8.2% 836 8.9% 8.9% 15,999 142 4.6% 4.6% 1,008 699 864
Europe 555 9.4% 8.1% 403 11.8% 10.3% 8,259 152 3.4% 2.8% 1,090 485 541
Visa Inc. 2,677 7.8% 7.1% 1,931 10.2% 9.7% 37,686 747 2.2% 0.9% 5,394 2,862 3,213
Visa Credit Programs
US $463 9.1% 9.1% $449 9.7% 9.7% 5,648 $14 (7.0%) (7.0%) 17 264 336
International 700 6.6% 6.5% 646 7.3% 7.5% 9,097 54 (1.5%) (3.9%) 230 663 736
Visa Inc. 1,163 7.5% 7.5% 1,095 8.2% 8.4% 14,746 68 (2.7%) (4.6%) 247 927 1,072
Visa Debit Programs
US $515 7.5% 7.5% $387 8.0% 8.0% 10,350 $127 6.0% 6.0% 991 436 528
International 999 8.3% 6.4% 448 17.3% 14.9% 12,590 551 1.9% 0.5% 4,156 1,499 1,613
Visa Inc. 1,514 8.0% 6.8% 835 12.8% 11.6% 22,940 679 2.7% 1.5% 5,147 1,935 2,141
For the 3 Months Ended September 30, 2017
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $532 0.1% 1.9% $414 5.2% 7.6% 5,912 $118 (14.2%) (14.1%) 867 835 943
Canada 64 3.6% 7.7% 59 3.7% 7.8% 814 5 1.6% 5.6% 11 50 56
CEMEA 261 12.2% 7.6% 81 26.5% 19.6% 3,244 181 6.9% 3.0% 1,288 342 330
LAC 248 10.9% 8.1% 99 16.3% 13.4% 2,920 148 7.5% 4.9% 1,161 425 458
US 981 11.1% 11.1% 840 12.1% 12.1% 15,940 141 5.6% 5.6% 1,004 701 867
Europe 512 372 7,957 140 1,098 485 536
Visa Inc. 2,599 34.4% 34.2% 1,865 38.2% 38.8% 36,786 734 25.7% 23.7% 5,429 2,839 3,191
Visa Credit Programs
US $460 18.0% 18.0% $446 18.9% 18.9% 5,522 $14 (3.9%) (3.9%) 16 261 337
International 658 28.3% 30.4% 607 27.5% 29.8% 8,791 51 39.4% 37.9% 233 659 732
Visa Inc. 1,119 23.9% 25.0% 1,053 23.7% 24.9% 14,313 65 26.9% 26.0% 249 920 1,069
Visa Debit Programs
US $521 5.7% 5.7% $394 5.3% 5.3% 10,418 $127 6.8% 6.8% 987 440 530
International 959 78.6% 74.6% 418 238.5% 229.8% 12,055 542 31.0% 28.1% 4,192 1,479 1,592
Visa Inc. 1,480 43.7% 42.0% 811 63.2% 62.1% 22,473 669 25.6% 23.5% 5,180 1,919 2,122
For the 3 Months Ended June 30, 2017
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $517 1.1% 2.1% $400 6.3% 7.5% 5,575 $117 (13.4%) (12.8%) 857 817 924
Canada 58 13.2% 8.8% 53 13.8% 9.4% 723 5 6.6% 2.5% 11 49 55
CEMEA 236 15.2% 6.9% 73 28.5% 16.8% 2,907 163 10.1% 2.9% 1,213 341 331
LAC 240 17.9% 10.5% 96 21.4% 12.2% 3,023 144 15.6% 9.5% 1,142 419 455
US 909 10.5% 10.5% 776 11.8% 11.8% 14,687 133 3.2% 3.2% 930 712 859
Europe 461 339 7,271 123 1,005 481 533
Visa Inc. 2,420 35.0% 35.4% 1,736 38.7% 40.2% 34,186 684 26.6% 24.6% 5,158 2,820 3,156
Visa Credit Programs
US $418 20.0% 20.0% $404 20.8% 20.8% 4,952 $14 0.6% 0.6% 16 274 334
International 622 31.0% 30.9% 575 29.1% 29.3% 8,376 47 59.3% 54.4% 222 651 726
Visa Inc. 1,041 26.3% 26.4% 979 25.5% 25.8% 13,328 62 40.2% 38.1% 237 925 1,060
Visa Debit Programs
US $491 3.5% 3.5% $372 3.5% 3.5% 9,735 $119 3.5% 3.5% 915 437 525
International 889 79.6% 78.4% 386 240.6% 241.5% 11,123 504 31.9% 28.9% 4,006 1,458 1,571
Visa Inc. 1,380 42.4% 43.0% 758 60.3% 64.3% 20,858 622 25.3% 23.3% 4,921 1,895 2,096
For the 3 Months Ended March 31, 2017
15
(1) Europe payments volume growth, when including Europe in prior periods before the Visa Inc. acquisition, is 10% Constant USD and 13% Nominal USD
(2) Europe includes volumes and transactions effective with the 3 months ended September 30, 2016
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $2,268 6.7% 4.8% $1,792 10.4% 8.7% 24,613 $476 (5.5%) (7.8%) 3,555 3 4
Canada 271 11.1% 8.5% 250 11.2% 8.6% 3,356 22 9.7% 7.3% 44 - -
CEMEA 1,054 10.7% 7.1% 343 24.0% 18.8% 13,862 711 5.3% 2.2% 5,006 3 3
LAC 1,025 8.0% 7.6% 420 13.2% 13.8% 12,163 605 4.7% 3.6% 4,677 2 2
US 3,971 9.3% 9.3% 3,412 10.2% 10.2% 64,278 559 4.3% 4.3% 3,941 4 4
Europe (1) 2,187 1,607 33,348 580 4,229 1,472 1,638
Visa Inc. 10,776 15.1% 13.0% 7,823 17.7% 15.8% 151,620 2,953 8.6% 6.2% 21,451 1,484 1,652
Visa Credit Programs
US $1,876 11.9% 11.9% $1,820 12.5% 12.5% 22,518 $56 (4.0%) (4.0%) 64 - -
International 2,808 15.0% 12.7% 2,598 15.3% 13.2% 36,218 210 11.2% 6.7% 895 945 1,096
Visa Inc. 4,684 13.7% 12.4% 4,418 14.1% 12.9% 58,736 266 7.6% 4.3% 959 945 1,096
Visa Debit Programs
US $2,095 7.1% 7.1% $1,592 7.7% 7.7% 41,759 $503 5.4% 5.4% 3,877 - -
International 3,997 21.6% 17.0% 1,813 40.1% 32.6% 51,124 2,184 9.5% 6.6% 16,615 1,972 2,186
Visa Inc. 6,092 16.2% 13.4% 3,405 22.8% 19.7% 92,883 2,687 8.7% 6.4% 20,492 1,972 2,186
For the 12 Months Ended March 31, 2018
Total
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Payments
Transactions
(millions)
Cash
Volume
($ billions)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Cash
Transactions
(millions)
Accounts
(millions)
Cards
(millions)
All Visa Credit & Debit
Asia Pacific $2,126 3.5% 4.3% $1,622 8.2% 9.0% 21,699 $504 (9.2%) (8.2%) 3,788 817 924
Canada 244 6.1% 6.6% 225 6.1% 6.6% 3,007 20 5.5% 5.8% 44 49 55
CEMEA 952 5.5% 8.6% 277 16.0% 18.1% 10,728 675 1.7% 5.1% 5,012 341 331
LAC 949 4.9% 9.6% 371 8.4% 12.2% 12,033 579 2.8% 7.9% 4,649 419 455
US 3,633 10.2% 10.2% 3,097 11.3% 11.3% 59,642 536 4.7% 4.7% 3,796 712 859
Europe (2) 1,459 1,053 22,116 406 3,198 481 533
Visa Inc. 9,363 26.7% 29.3% 6,645 30.9% 32.9% 129,225 2,718 17.6% 21.1% 20,487 2,820 3,156
Visa Credit Programs
US $1,677 17.2% 17.2% $1,618 17.7% 17.7% 20,007 $59 4.3% 4.3% 67 274 334
International 2,443 24.5% 26.6% 2,254 23.5% 25.4% 32,295 188 38.1% 42.2% 886 651 726
Visa Inc. 4,120 21.5% 22.6% 3,872 21.0% 22.1% 52,302 247 28.2% 31.2% 953 925 1,060
Visa Debit Programs
US $1,956 4.9% 4.9% $1,479 4.9% 5.0% 39,635 $477 4.7% 4.7% 3,729 437 525
International 3,288 54.3% 61.4% 1,293 177.2% 190.9% 37,288 1,994 19.9% 24.4% 15,805 1,458 1,571
Visa Inc. 5,243 31.2% 34.9% 2,772 47.8% 51.4% 76,923 2,471 16.6% 20.1% 19,534 1,895 2,096
For the 12 Months Ended March 31, 2017
16
2. Cross-Border Volume
The table below represents cross-border volume growth for cards carrying the Visa, Visa Electron,V PAY, Interlink and PLUS
brands. Cross-border volume refers to payments and cash volume where the issuing country is different from the merchant
country.
(1) Europe is included as part of Visa Inc. effective with the 3 months ended September 30, 2016.
(2) Europe volumes and transactions were first included as part of Visa Inc. starting in the quarter ended September 30, 2016. Normalized
Growth includes Europe activity in prior year periods before Visa Inc. acquired Visa Europe.
3. Visa Processed Transactions
The table below represents transactions involving Visa, Visa Electron, V PAY, Interlink and PLUS cards processed on Visa’s
networks.
(1) Europe is included as part of Visa Inc. effective with the 3 months ended September 30, 2016.
(2) Europe volumes and transactions were first included as part of Visa Inc. starting in the quarter ended September 30, 2016. Normalized
Growth includes Europe activity in prior year periods before Visa Inc. acquired Visa Europe.
Period (1)
Growth
(Nominal
USD)
Growth
(Constant
USD)
Normalized
Growth (2)
(Constant USD)
3 Months Ended
Mar 31, 2018 21% 11% –
Dec 31, 2017 14% 9% –
Sep 30, 2017 12% 10% –
Jun 30, 2017 142% 147% 11%
Mar 31, 2017 129% 132% 11%
12 Months Ended
Mar 31, 2018 31% 27% 10%
Period (1)
Processed
Transactions
(millions) Growth
Normalized
Growth (2)
3 Months Ended
Mar 31, 2018 29,321 12% –
Dec 31, 2017 30,508 12% –
Sep 30, 2017 29,180 13% –
Jun 30, 2017 28,450 44% 13%
Mar 31, 2017 26,256 42% 12%
12 Months Ended
Mar 31, 2018 117,458 18% 12%
17
Footnote
Payments volume represents the aggregate dollar amount of purchases made with cards carrying the Visa, Visa Electron, V PAY
and Interlink brands for the relevant period, and cash volume represents the aggregate dollar amount of cash disbursements
obtained with these cards for the relevant period and includes the impact of balance transfers and convenience checks, but
excludes proprietary PLUS volume. Total volume represents payments and cash volume.
Visa payment products are comprised of credit and debit programs, and data relating to each program is included in the tables.
Debit programs include Visa’s signature based and Interlink (PIN) debit programs.
The data presented is based on results reported quarterly by Visa’s financial institution clients on their operating certificates.
Estimates may be utilized if data is unavailable.
On occasion, previously presented information may be updated. Prior period updates, if any, are not material.
Europe is reported and included in Visa Inc. results effective with the 3 months ended September 2016. Visa’s CEMEA region is
comprised of countries in Central Europe, the Middle East and Africa. Several European Union countries in Central Europe, Israel
and Turkey are not included in CEMEA. LAC is comprised of countries in Central and South America and the Caribbean.
International includes Asia Pacific, Canada, CEMEA, Europe and LAC.
Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each
local currency in which Visa Inc. volumes are reported (“Nominal USD”). These exchange rates are calculated on a quarterly basis
using the established exchange rate for each quarter. To eliminate the impact of foreign currency fluctuations against the U.S.
dollar in measuring performance, Visa Inc. also reports year-over-year growth in total volume, payments volume and cash
volume on the basis of local currency information (“Constant USD”). This presentation represents Visa’s historical methodology
which may be subject to review and refinement.
Effective June 9, 2016, Article 8 of the EU Interchange Fee Regulation states that payment card networks cannot impose reporting
requirements or the obligation to pay fees on payment transactions where their payment brand is present but their network is
not used. Prior to this regulation, Visa collected a small service fee in a few countries, particularly France, on domestic payment
transactions where Visa cards are co-badged with a domestic network. Clients in Europe continued to report co-badged volume
through the quarter ended September 2016; however, Europe co-badged volume and transactions have been excluded from all
periods.
Visa Inc.
Fiscal Second Quarter 2018
Financial Results
April 25, 2018
Fiscal Second Quarter 2018 Financial Results2 ©2018 Visa. All rights reserved.
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among
other things, our future operations, prospects, developments, strategies, business growth and financial outlook for fiscal full-year 2018. Forward-looking
statements generally are identified by words such as "believes," "estimates," "expects," "intends," "may," "projects," “outlook”, "could," "should," "will,"
"continue" and other similar expressions. All statements other than statements of historical fact could be forward-looking statements, which speak only as
of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are
beyond our control and are difficult to predict.
Actual results could differ materially from those expressed in, or implied by, our forward-looking statements due to a variety of factors, including, but not
limited to:
• increased oversight and regulation of the global payments industry and our business;
• impact of government-imposed restrictions on payment systems;
• outcome of tax, litigation and governmental investigation matters;
• increasingly intense competition in the payments industry, including competition for our clients and merchants;
• proliferation and continuous evolution of new technologies and business models;
• our ability to maintain relationships with our clients, merchants and other third parties;
• brand or reputational damage;
• management changes;
• impact of global economic, political, market and social events or conditions;
• exposure to loss or illiquidity due to settlement guarantees;
• uncertainty surrounding the impact of the United Kingdom’s withdrawal from the European Union;
• cyber security attacks, breaches or failure of our networks;
• failure to maintain interoperability with Visa Europe’s systems and to migrate European activity onto VisaNet successfully;
• our ability to successfully integrate and manage our acquisitions and other strategic investments; and
• other factors described in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year
ended September 30, 2017, and our subsequent reports on Forms 10-Q and 8-K.
Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise.
Forward-Looking Statements
Fiscal Second Quarter 2018 Financial Results3 ©2018 Visa. All rights reserved.
Fiscal Second Quarter 2018 Results
in billions, except percentages and per share data
USD
($)
YoY Change
(%)
Net Operating Revenues $5.1 13%
GAAP Net Income $2.6 505%
Adjusted Net Income(1) $2.6 26%
GAAP Earnings Per Share $1.11 523%
Adjusted Earnings Per Share(1) $1.11 30%
Note: Refer to the accompanying financial tables for further details and a reconciliation of the non-GAAP measures presented.
• Double-digit growth in payments volume, cross-border volume and processed transactions
• Increased Fiscal Full-Year 2018 Outlook based on strong performance in the first half
• Returned $2.5B of capital to shareholders in the form of share repurchases and dividends
(1) Adjusted Net Income and Adjusted Earnings Per Share excludes special items in the prior year.
Fiscal Second Quarter 2018 Financial Results4 ©2018 Visa. All rights reserved.
Quarter ended December
Payments Volume
US$ in billions, nominal, except percentages
INTL
1,003
INTL
1,152 INTL
601
INTL
678 INTL
403
INTL
474
U.S.
804
U.S.
881
U.S.
430
U.S.
479
U.S.
374
U.S.
403
1,807
2,033
1,030
1,157
777
877
INTL = International
Total Visa Inc. Credit Debit
YoY Change
(constant) 10% 10% 9%
YoY Change
(nominal)
12% 13%13%
Note: On occasion, previously submitted volume information may be updated to reflect revised client submissions or other adjustments. Prior-period updates are not material. Figures
may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers. Constant-dollar growth rates exclude the impact of foreign
currency fluctuations against the U.S. dollar in measuring performance.
2016
2017
Fiscal Second Quarter 2018 Financial Results5 ©2018 Visa. All rights reserved.
Quarter ended March
Current quarter payments volume and other select metrics are provided in the operational performance data supplement in the earnings
release to provide more recent operating data. Service revenues continue to be recognized based on payments volume in the prior quarter.
Payments Volume
US$ in billions, nominal, except percentages
YoY Change
(constant) 11% 10% 11%
YoY Change
(nominal) 14% 16%15%
Note: On occasion, reported payments volume information may be updated to reflect revised client submissions or other adjustments. Prior-period updates are not material. Figures
may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers. Constant-dollar growth rates exclude the impact of foreign
currency fluctuations against the U.S. dollar in measuring performance.
INTL
420
INTL 09
U.S.
575
U.S.
631
U.S.
277
U.S.
313
INTL
960
INTL
1,139 INTL
575
INTL
666 INTL
386
INTL
473
U.S.
776
U.S.
855
U.S.
404
U.S.
446
U.S.
372
U.S.
409
1,736
1,994
979
1,113
758
881
INTL = International
Total Visa Inc. Credit Debit
2017
2018
Fiscal Second Quarter 2018 Financial Results6 ©2018 Visa. All rights reserved.
Quarter ended March
Transactions
in millions, except percentages
Note: Total transactions represent payments and cash transactions as reported by Visa clients on their operating certificates. On occasion, previously submitted transaction information
may be updated to reflect revised client submissions or other adjustments. Prior-period updates are not material. Figures may not recalculate exactly due to rounding. Percentage
changes and totals are calculated based on unrounded numbers. Processed transactions represent transactions involving Visa, Visa Electron, Interlink, V PAY and PLUS cards processed
on Visa’s networks.
Credit
38%
YoY Change 10% 12%
Debit
62%
Credit
38%
66%
Debit
66%
Debit
34%
Credit
34%
Credit
39,344
43,166
26,256
29,321
Processed TransactionsTotal Transactions
2017
2018
Fiscal Second Quarter 2018 Financial Results7 ©2018 Visa. All rights reserved.
Quarter ended December
Total Cards
in millions, except percentages
3,132
1,062
2,070
3,250
1,085
2,166
Visa Inc. Credit Debit
Note: The data presented is based on results reported quarterly by Visa clients on their operating certificates. Estimates may be utilized if data is unavailable. On occasion, previously
submitted card information may be updated to reflect revised client submissions or other adjustments. Prior-period updates are not material. Figures may not recalculate exactly due
to rounding. Percentage changes are calculated based on unrounded numbers.
YoY Change 2% 5%4%
2016
2017
Fiscal Second Quarter 2018 Financial Results8 ©2018 Visa. All rights reserved.
5,508
(1,031)
4,477
6,362
(1,289)
5,073
Gross
Revenues
Client
Incentives
Net Operating
Revenues
Fiscal 2017
Fiscal 2018
Revenue – Q2 2018
US$ in millions, except percentages
YoY
Change 25% 13%16%
Note: Figures may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
18.7% 20.3%
Client Incentives as a
% of Gross Revenues
1.6ppts
Fiscal Second Quarter 2018 Financial Results9 ©2018 Visa. All rights reserved.
Revenue Detail – Q2 2018
US$ in millions, except percentages
1,993
1,843
1,469
203
2,253
2,127
1,752
230
Service Revenues Data Processing
Revenues
International
Transaction Revenues
Other Revenues
Fiscal 2017
Fiscal 2018
YoY
Change 15% 19%13% 13%
Note: Figures may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Fiscal Second Quarter 2018 Financial Results10 ©2018 Visa. All rights reserved.
Operating Margin – Q2 2018
US$ in millions, except percentages
1,669
2,808
1,477
3,000
1,737
3,336
Reported GAAP Fiscal 2017 Adjusted non-GAAP Fiscal 2017 Reported GAAP Fiscal 2018
63%
67% 66%
Note: There were no comparable adjustments for second quarter of fiscal 2018. Refer to the accompanying financial tables for further details and a reconciliation of the non-GAAP
measures presented. Operating margin is calculated as operating income divided by net operating revenues. Figures may not recalculate exactly due to rounding. Percentage changes
are calculated based on unrounded numbers.
18% 11%N/A (1)ppt
13% 19%4% 3ppts
YOY Change
(Reported GAAP)
YOY Change
(Adjusted non-GAAP)
4,477
5,073
Net Operating
Revenue
Operating
Income
Operating
Expenses
Operating
Margin
N/A – Not applicable, as there were no non-GAAP adjustments
Fiscal Second Quarter 2018 Financial Results11 ©2018 Visa. All rights reserved.
Operating Expenses – Q2 2018
US$ in millions, except percentages
Note: There were no comparable adjustments for second quarter of fiscal 2018. Refer to the accompanying financial tables for further details and a reconciliation of the non-GAAP
measures presented. Figures may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
13%35% 30% 17% (45)%YOY Change(Reported GAAP)
17% (100)%
YOY Change
(Adjusted non-GAAP) N/A N/A N/A N/A N/AN/A 4%
704
193
150
83
131
824
261
169
108
153
Personnel Marketing Network &
Processing
Professional Fees Depreciation &
Amortization
N/A – Not applicable, as there were no non-GAAP adjustments
406
214 222
Reported GAAP Fiscal 2017 Adjusted non-GAAP Fiscal 2017 Reported GAAP Fiscal 2018
2 0
Litigation
Provision
General &
Administrative
Fiscal Second Quarter 2018 Financial Results12 ©2018 Visa. All rights reserved.
Other Financial Results and Highlights
• Cash, cash equivalents and available-for-sale investment securities of
$14.2 billion at the end of the fiscal second quarter
• Adjusted free cash flow of $2.6 billion for the fiscal second quarter
• Capital expenditures of $213 million during the fiscal second quarter
• On March 7, 2018, the Company acquired Fraedom to strengthen and
expand Visa’s business solutions to meet the evolving needs of the B2B
payments industry
See appendix for reconciliation of adjusted free cash flow to the closest comparable U.S. GAAP financial measure.
Fiscal Second Quarter 2018 Financial Results13 ©2018 Visa. All rights reserved.
Financial Outlook for Fiscal Full-Year 2018
Annual net revenue growth
Low double-digits on a nominal dollar basis, with approximately 1 percentage
point of positive foreign currency impact
Client incentives as a
percentage of gross
revenues
21.5% to 22.0% range
Annual operating expense
growth
Low double-digits adjusted for special items in fiscal 2017 (see note below)
Annual operating margin High 60s
GAAP and adjusted
effective tax rate
21% to 22% range, which includes a 6 percentage point reduction resulting
from U.S. tax reform
Annual diluted class A
common stock earnings per
share growth including the
impact of U.S tax reform
Low-60’s on a GAAP nominal dollar basis and high-20’s on an adjusted, non-
GAAP nominal dollar basis (see note below). Both include approximately 9 to 10
percentage points driven by U.S. tax reform and approximately 1 to 1.5
percentage points of positive foreign currency impact
Note: The financial outlook for fiscal full-year 2018 includes Visa Europe integration expenses of approximately $60 million for the full-year. Annual operating expense growth is derived from
adjusted full-year 2017 operating expenses of $6.0 billion. Annual adjusted diluted class A common stock earnings per share growth is derived from adjusted full-year 2017 earnings per
share results of $3.48. Refer to the accompanying financial tables for further details and a reconciliation of the adjusted fiscal full-year 2017 results.
Appendix
Fiscal Second Quarter 2018 Financial Results15 ©2018 Visa. All rights reserved.
Calculation of Adjusted Free Cash Flow
A-
Management believes that presentation of adjusted free cash flow is useful to measure the Company’s generation of cash available to first
re-invest in the business and then return excess cash to shareholders through stock buybacks and cash dividends. During the three months
ended March 31, 2018, the Company generated adjusted free cash flow of $2.6 billion, and returned $2.5 billion to investors through stock
buybacks of $2.0 billion and dividends paid of $490 million. During the six months ended March 31, 2018, the Company generated
adjusted free cash flow of $5.2 billion, and returned $4.7 billion to investors through stock buybacks of $3.8 billion and dividends paid of
$948 million. The Company defines adjusted free cash flow as cash provided by operating activities adjusted to reflect capital investments
made in the business. Adjusted free cash flow is a non-GAAP performance measure and should not be relied upon as a substitute for
measures calculated in accordance with U.S. GAAP. The following table reconciles as-reported net cash provided by operating activities to
non-GAAP adjusted free cash flow.
US$ in millions Three Months Ended March 31, 2018 Six Months Ended March 31, 2018
Net cash provided by operating activities $2,820 $5,582
Less: capital expenditures (213) (354)
Adjusted free cash flow $2,607 $5,228