VISA INC

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our future financial position, results of operations and cash flows; the implementation of the exchange offer program; prospects, developments, strategies and growth of our business; anticipated expansion of our products in certain countries; industry developments; anticipated timing and benefits of our acquisitions; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our unaudited consolidated financial statements. Forward-looking statements generally are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “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. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2023, and any 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.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our future financial position, results of operations and cash flows; the completion of the class B-1 exchange offer; prospects, developments, strategies and growth of our business; anticipated expansion of our products in certain countries; industry developments; anticipated timing and benefits of our acquisitions; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our unaudited consolidated financial statements. Forward-looking statements generally are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “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. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2023, and any 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.

Previous wording

Highlights for the first quarter of fiscal 2024. For the three months ended December 31, 2023, net revenues increased 9% over the prior-year comparable period, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives. During the three months ended December 31, 2023, exchange rate movements did not have a material impact on net revenues growth. See Results of Operations—Net Revenues below for further discussion.

Current wording

Highlights for the first half of fiscal 2024. For the three and six months ended March 31, 2024, net revenue increased 10% and 9% over the prior-year comparable periods, respectively, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives. During the three and six months ended March 31, 2024, exchange rate movements did not have a material impact on net revenue growth. See Results of Operations—Net Revenue below for further discussion.

Previous wording

For the three months ended December 31, 2023, GAAP operating expenses decreased 6% over the prior-year comparable period, primarily driven by lower litigation provision, partially offset by higher personnel expenses. See Results of Operations—Operating Expenses below for further discussion. During the three months ended December 31, 2023, exchange rate movements positively impacted our operating expenses by approximately one percentage point.

Current wording

For the three months ended March 31, 2024, GAAP operating expenses increased 29% over the prior-year comparable period, primarily driven by higher litigation provision and general and administrative expenses. For the six months ended March 31, 2024, GAAP operating expenses increased 11% over the prior-year comparable period, primarily driven by higher personnel and general and administrative expenses. See Results of Operations—Operating Expenses below for further discussion. During the three and six months ended March 31, 2024, exchange rate movements did not have a material impact on our operating expenses growth.

Previous wording

For the three months ended December 31, 2023, non-GAAP operating expenses increased 7% over the prior-year comparable period, primarily driven by higher personnel expenses.

Current wording

For the three and six months ended March 31, 2024, non-GAAP operating expenses increased 11% and 9% over the prior-year comparable periods, respectively, primarily driven by higher general and administrative and personnel expenses.

Previous wording

Acquisition. On January 16, 2024, we acquired Pismo Holdings (Pismo), a global cloud-native issuer processing and core banking platform, for $1.0 billion in cash.

Current wording

Acquisition. On January 16, 2024, we acquired Pismo Holdings (Pismo), a global cloud-native issuer processing and core banking platform, for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements.

Previous wording

Common stock repurchases. During the three months ended December 31, 2023, we repurchased 15 million shares of our class A common stock in the open market for $3.6 billion. As of December 31, 2023, our share repurchase programs had remaining authorized funds of $26.4 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Current wording

Common stock repurchases. During the six months ended March 31, 2024, we repurchased 25 million shares of our class A common stock in the open market for $6.4 billion. As of March 31, 2024, our share repurchase program had remaining authorized funds of $23.6 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Previous wording

•Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of amortization of intangible assets such as developed technology, customer relationships and brands acquired in connection with business combinations executed beginning in fiscal 2019. Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations. As such, we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

Current wording

•Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of amortization of intangible assets such as technology, customer relationships and trade names acquired in connection with business combinations executed beginning in fiscal 2019. Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations. As such, we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

Previous wording

•Acquisition-related costs. Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations. These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities. These costs also include retention equity and deferred equity compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination. We have excluded these amounts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

Current wording

•Acquisition-related costs. Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations. These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities. These costs also include retention equity and deferred compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination. We have excluded these amounts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

Previous wording

•Litigation provision. During the three months ended December 31, 2022, we recorded additional accruals to address claims associated with the interchange multidistrict litigation. Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a downward adjustment to the rate at which shares of our class B common stock ultimately convert into shares of class A common stock. During the three months ended December 31, 2022, basic and diluted earnings per class A common stock were unchanged, as a result of the downward adjustments of the class B common stock conversion rate during the period. See Note 5—U.S. and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements.

Current wording

Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a downward adjustment to the rate at which shares of our class B-1 common stock ultimately convert into shares of class A common stock. During the three and six months ended March 31, 2024, there was no conversion rate adjustment. During the six months ended March 31, 2023, basic and diluted earnings per class A common stock increased $0.01 and was unchanged, respectively, as a result of the downward adjustments of the class B-1 common stock conversion rate during the period. See Note 5—U.S. and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements.

Previous wording

Payments volume and processed transactions. Payments volume is the primary driver for our service revenues, and the number of processed transactions is the primary driver for our data processing revenues.

Current wording

Payments volume and processed transactions. Payments volume is the primary driver for our service revenue, and the number of processed transactions is the primary driver for our data processing revenue.

Previous wording

Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-badged volume. Nominal payments volume is denominated in U.S. dollars and is calculated each quarter by applying an established U.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks.

Current wording

Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-badged volume. Nominal payments volume is denominated in U.S. dollars and is calculated each quarter by applying an established U.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions include payments and cash transactions, and represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks.

Previous wording

(1)Service revenues in a given quarter are primarily assessed based on nominal payments volume in the prior quarter. Therefore, service revenues reported for the three months ended December 31, 2023 and 2022, respectively, were based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2023 and 2022, respectively. On occasion, previously presented volume information may be updated. Prior period updates are not material.

Current wording

(1)Service revenue in a given quarter is primarily assessed based on nominal payments volume in the prior quarter. Therefore, service revenue reported for the three and six months ended March 31, 2024 and 2023, respectively, was based on nominal payments volume reported by our financial institution clients for the three and six months ended December 31, 2023 and 2022, respectively. On occasion, previously presented volume information may be updated. Prior period updates are not material.

Previous wording

The following table presents our net revenues earned in the U.S. and internationally:

Current wording

The following table presents our net revenue earned in the U.S. and internationally:

Previous wording

Net revenues increased over the three-month prior-year comparable period primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

Current wording

Net revenue increased over the three and six-month prior-year comparable periods primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

Previous wording

Our net revenues are impacted by the overall strengthening or weakening of the U.S. dollar as payments volume and related revenues denominated in local currencies are converted to U.S. dollars. During the three months ended December 31, 2023, exchange rate movements did not have a material impact on net revenues growth.

Current wording

Our net revenue is impacted by the overall strengthening or weakening of the U.S. dollar as payments volume and related revenue denominated in local currencies are converted to U.S. dollars. During the three and six months ended March 31, 2024, exchange rate movements did not have a material impact on net revenue growth.

Previous wording

The following table presents the components of our net revenues:

Current wording

The following table presents the components of our net revenue:

Previous wording

•Service revenues increased primarily due to 9% growth in nominal payments volume and select pricing modifications.

Current wording

•Service revenue increased primarily due to 9% growth in nominal payments volume over the three and six-month prior-year comparable periods.

Previous wording

•International transaction revenues increased primarily due to growth in nominal cross-border volumes of 18%, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.

Current wording

•International transaction revenue increased primarily due to growth in nominal cross-border volumes of 16% and 17% over the three and six-month prior-year comparable periods, respectively, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.

Previous wording

•Client incentives increased primarily due to growth in payments volume. The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.

Current wording

•Client incentives increased primarily due to growth in payments volume over the three and six-month prior-year comparable periods. The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.

Previous wording

•Personnel expenses increased during the three months ended December 31, 2023 primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth.

Current wording

•Personnel expenses increased during the three and six months ended March 31, 2024 primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth.

Previous wording

•Marketing expenses decreased during the three months ended December 31, 2023 primarily due to spend related to the FIFA World Cup 2022 TMin the prior year and absent in the current year.

Current wording

•Marketing expenses increased during the three months ended March 31, 2024 primarily due to higher spending in various campaigns. Marketing expenses decreased during the six months ended March 31, 2024 primarily due to spend related to the FIFA World Cup TMin the prior year and absent in the current year, partially offset by higher spending in various campaigns.

Previous wording

•Professional fees increased during the three months ended December 31, 2023 primarily due to higher legal and consulting fees.

Current wording

•Professional fees increased during the three and six months ended March 31, 2024 primarily due to higher advisory and consulting fees. The increase during the six months ended March 31, 2024 also included higher legal fees.

Previous wording

•General and administrative expenses increased during the three months ended December 31, 2023 primarily due to higher usage of travel related card benefits and indirect taxes, partially offset by favorable foreign currency fluctuations.

Current wording

•General and administrative expenses increased during the three and six months ended March 31, 2024 primarily due to lease consolidation costs, higher indirect taxes and higher usage of travel related card benefits. The increase during the three months ended March 31, 2024 also included unfavorable foreign currency fluctuations.

Previous wording

•Interest expense increased during the three months ended December 31, 2023 primarily due to losses from derivative instruments and the discrete tax benefit recognized during the prior year, partially offset by lower interest expense related to lower outstanding debt.

Current wording

•Interest expense decreased during the three months ended March 31, 2024 primarily due to higher interest benefit related to taxes, partially offset by higher losses from derivative instruments. Interest expense decreased during the six months ended March 31, 2024 primarily due to higher interest benefit related to taxes and lower interest expense related to lower outstanding debt, partially offset by losses from derivative instruments.

Previous wording

•Investment income (expense) and other increased during the three months ended December 31, 2023, primarily due to higher interest income on our cash and investments and gains on our investments.

Current wording

•Investment income (expense) and other increased during the three months ended March 31, 2024, primarily due to higher interest income on our cash and investments and lower losses on our investments. Investment income (expense) and other increased during the six months ended March 31, 2024, primarily due to higher interest income on our cash and investments and gains on our investments.

Previous wording

The difference in the effective tax rates is primarily due to a $142 million tax benefit recognized during the three months ended December 31, 2022 due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

Current wording

•During the six months ended March 31, 2023, a $142 million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

Previous wording

Operating activities. Cash provided by operating activities for the three months ended December 31, 2023 was lower than the prior-year comparable period primarily due to higher incentive payments and higher litigation payments, partially offset by continued growth in our underlying business.

Current wording

Operating activities. Cash provided by operating activities for the six months ended March 31, 2024 was higher than the prior-year comparable period primarily due to growth in our underlying business, partially offset by higher incentive payments.

Previous wording

Investing activities. Cash used in investing activities for the three months ended December 31, 2023 was higher than the prior-year comparable period primarily due to higher purchases of investment securities and cash received from the settlement of net investment hedge derivative instruments in the prior year.

Current wording

Investing activities. Cash used in investing activities for the six months ended March 31, 2024 was higher than the prior-year comparable period primarily due to cash paid for acquisitions, net of cash acquired, higher purchases, net of maturities and sales, of investment securities and cash received from the settlement of net investment hedge derivative instruments in the prior year. See Note 2—Acquisitionsto our unaudited consolidated financial statements.

Previous wording

Financing activities. Cash used in financing activities for the three months ended December 31, 2023 was lower than the prior-year comparable period primarily due to the principal debt payment upon maturity of our December 2022 senior notes in the prior year, partially offset by higher share repurchases and higher dividends paid. See Note 7—Debtand Note 9—Stockholders’ Equityto our unaudited consolidated financial statements.

Current wording

Financing activities. Cash used in financing activities for the six months ended March 31, 2024 was lower than the prior-year comparable period primarily due to the principal debt payment upon maturity of our December 2022 senior notes in the prior year, partially offset by higher share repurchases and higher dividends paid. See Note 7—Debtand Note 9—Stockholders’ Equityto our unaudited consolidated financial statements.

Previous wording

Common stock repurchases. During the three months ended December 31, 2023, we repurchased shares of our class A common stock in the open market for $3.6 billion. As of December 31, 2023, our share repurchase programs had remaining authorized funds of $26.4 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Current wording

Common stock repurchases. During the six months ended March 31, 2024, we repurchased shares of our class A common stock in the open market for $6.4 billion. As of March 31, 2024, our share repurchase program had remaining authorized funds of $23.6 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Previous wording

Dividends. During the three months ended December 31, 2023, we declared and paid $1.1 billion in dividends to holders of our common and preferred stock. On January 23, 2024, our board declared a quarterly cash dividend of $0.52 per share of class A common stock (determined in the case of class B-1 and C common stock and series A, B and C convertible participating preferred stock on an as-converted basis). See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. We expect to continue paying quarterly dividends in cash, subject to approval by the board. All preferred and class B-1 and C common stock will share ratably on an as-converted basis in such future dividends.

Current wording

Dividends. During the six months ended March 31, 2024, we declared and paid $2.1 billion in dividends to holders of our common and preferred stock. On April 23, 2024, our board declared a quarterly cash dividend of $0.52 per share of class A common stock (determined in the case of all other outstanding common and preferred stock on an as-converted basis). See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. We expect to continue paying quarterly dividends in cash, subject to approval by the board.

Previous wording

Acquisition. On January 16 2024, we acquired Pismo for $1.0 billion in cash. See Note 2—Acquisitions to our unaudited consolidated financial statements.

Current wording

Acquisition. On January 16 2024, we acquired Pismo for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements.