VISA INC
For the period ended Jun 30, 2024. Filed Jul 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 24, 2024
V$422.65+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-24.
0001403161-24-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001403161-24-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 83 current paragraphs.
46 unchanged; 32 reworded; 5 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Class B-1 common stock exchange offer. In May 2024, we accepted 241 million shares of class B-1 common stock tendered in the exchange offer. In exchange, we issued approximately 120 million shares of class B-2 common stock and 48 million shares of class C common stock. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.
Current report
•Indirect taxes. During the three and nine months ended June 30, 2024, as a result of the resolution of an audit, we recognized a benefit within general and administrative expense related to the release of the reserve previously recognized in fiscal 2021. This one-time benefit is not representative of our ongoing operations.
Current report
•Charitable contribution. During the three and nine months ended June 30, 2024, we donated investment securities to the Visa Foundation and recognized a non-cash general and administrative expense. We have excluded this amount as it does not reflect the underlying performance of our business.
Current report
•Depreciation and amortization increased over the three and nine-month prior-year comparable periods primarily due to additional depreciation and amortization from our on-going investments and acquisitions.
Current report
The effective income tax rates differ primarily due to the following:
Removed paragraphs (2)
Previous report
NM - Not meaningful
Previous report
The difference in the effective tax rates is primarily due to the following:
Reworded paragraphs (32)
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 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.
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; 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 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.
Current wording
Highlights for the first nine months of fiscal 2024. For the three and nine months ended June 30, 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 months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 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 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.
Current wording
For the three months ended June 30, 2024, GAAP operating expenses decreased 4% over the prior-year comparable period, primarily driven by lower litigation provision. For the nine months ended June 30, 2024, GAAP operating expenses increased 5% over the prior-year comparable period, primarily driven by higher personnel and general and administrative expenses, partially offset by lower litigation provision. See Results of Operations—Operating Expenses below for further discussion. During the three and nine months ended June 30, 2024, exchange rate movements did not have a material impact on our operating expenses growth.
Previous 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.
Current wording
For the three and nine months ended June 30, 2024, non-GAAP operating expenses increased 14% and 11% over the prior-year comparable periods, respectively, primarily driven by higher general and administrative, personnel and marketing expenses.
Previous wording
Interchange multidistrict litigation. During the six months ended March 31, 2024, we recorded an additional accrual pursuant to the agreement to resolve the Injunctive Relief Class claims in the interchange multidistrict litigation. See Note 13—Legal Matters to our unaudited consolidated financial statements.
Current wording
Interchange multidistrict litigation. During the nine months ended June 30, 2024, we recorded additional accruals of $140 million to address claims associated with the interchange multidistrict litigation. See Note 13—Legal Matters to our unaudited consolidated financial statements.
Previous 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.
Current wording
Common stock repurchases. During the nine months ended June 30, 2024, we repurchased 42 million shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.
Previous wording
•Litigation provision. Litigation provision includes significant accruals related to certain legal matters that are not covered by the U.S. retrospective responsibility plan or the Europe retrospective responsibility plan (uncovered legal matters) and additional accruals associated with the interchange multidistrict litigation which are covered by the U.S. retrospective responsibility plan (U.S. covered litigation). Litigation provision associated with these matters can vary significantly based on the facts and circumstances related to each matter and do not correlate to the underlying performance of our business. During the three and six months ended March 31, 2024, and six months ended March 31, 2023, we have excluded these amounts to facilitate a comparison to our past operating performance.
Current wording
•Litigation provision. Litigation provision includes significant accruals related to certain legal matters that are not covered by the U.S. retrospective responsibility plan or the Europe retrospective responsibility plan (uncovered legal matters) and additional accruals associated with the interchange multidistrict litigation which are covered by the U.S. retrospective responsibility plan (U.S. covered litigation). Litigation provision associated with these matters can vary significantly based on the facts and circumstances related to each matter and do not correlate to the underlying performance of our business. During the three and nine months ended June 30, 2024 and 2023, we have excluded these amounts to facilitate a comparison to our past operating performance.
Previous 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.
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 and class B-2 common stock ultimately convert into shares of class A common stock. During the three and nine months ended June 30, 2024, there were no conversion rate adjustments. During the three months ended June 30, 2023, basic and diluted earnings per class A common stock was unchanged and during the nine months ended June 30, 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
•Lease consolidation costs. During the three and six months ended March 31, 2024, we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces. We have excluded these amounts as they do not reflect the underlying performance of our business.
Current wording
•Lease consolidation costs. During the nine months ended June 30, 2024, we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces. We have excluded these amounts as they do not reflect the underlying performance of our business.
Previous 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.
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 nine months ended June 30, 2024 and 2023, respectively, was based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2024 and 2023, respectively. On occasion, previously presented volume information may be updated. Prior period updates are not material.
Previous 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.
Current wording
Net revenue increased over the three and nine-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 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.
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 months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth.
Previous wording
•Service revenue increased primarily due to 9% growth in nominal payments volume over the three and six-month prior-year comparable periods.
Current wording
•Service revenue increased primarily due to 7% and 8% growth in nominal payments volume over the three and nine-month prior-year comparable periods, respectively.
Previous wording
•Data processing revenue increased primarily due to 11% and 10% growth in processed transactions over the three and six-month prior-year comparable periods, respectively, and select pricing modifications.
Current wording
•Data processing revenue increased primarily due to 10% growth in processed transactions over the three and nine-month prior-year comparable periods.
Previous 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.
Current wording
•International transaction revenue increased primarily due to growth in nominal cross-border volumes of 12% and 15% over the three and nine-month prior-year comparable periods, respectively, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.
Previous wording
•Other revenue increased primarily due to growth in consulting and marketing services and select pricing modifications over the three and six-month prior-year comparable periods.
Current wording
•Other revenue increased primarily due to growth in consulting and marketing services and select pricing modifications over the three and nine-month prior-year comparable periods.
Previous 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.
Current wording
•Client incentives increased primarily due to growth in payments volume over the three and nine-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 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.
Current wording
•Personnel expenses increased over the three and nine-month prior-year comparable periods primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.
Previous 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.
Current wording
•Marketing expenses increased over the three and nine-month prior-year comparable periods primarily due to higher spend including for client marketing and the Olympic and Paralympic Games Paris 2024. The increase during the nine months ended June 30, 2024 was partially offset by spend related to the FIFA World Cup TM in the prior year and absent in the current year.
Previous 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.
Current wording
•Professional fees increased over the three and nine-month prior-year comparable periods primarily due to higher consulting fees. The increase during the nine months ended June 30, 2024 also included higher advisory fees.
Previous 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.
Current wording
•General and administrative expenses increased over the three and nine-month prior-year comparable periods primarily due to a charitable contribution to the Visa Foundation in the current year, higher usage of travel related card benefits, higher indirect taxes and higher unfavorable foreign currency fluctuations, partially offset by the release of the reserve on indirect taxes previously recognized in fiscal 2021. The increase during the nine months ended June 30, 2024 also included lease consolidation costs in the current year.
Previous wording
•Litigation provision increased during the three months ended March 31, 2024 due to the accruals related to the uncovered litigation and U.S. covered litigation. Litigation provision increased during the six months ended March 31, 2024 due to the accruals related to the uncovered litigation, partially offset by lower accruals related to the U.S. covered litigation. See Note 13—Legal Matters to our unaudited consolidated financial statements.
Current wording
•Litigation provision decreased over the three and nine-month prior-year comparable periods primarily due to lower accruals related to the U.S. covered litigation. The decrease during the nine months ended June 30, 2024 was partially offset by accruals related to uncovered litigation in the current year. See Note 13—Legal Matters to our unaudited consolidated financial statements.
Previous 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.
Current wording
•Interest expense increased during the three months ended June 30, 2024 primarily due to higher losses from derivative instruments and higher interest expense related to taxes. Interest expense increased during the nine months ended June 30, 2024 primarily due to higher losses from derivative instruments, partially offset by higher interest benefit related to taxes and lower interest expense related to lower outstanding debt.
Previous 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.
Current wording
•Investment income (expense) and other decreased during the three months ended June 30, 2024, primarily due to losses on our investments, partially offset by higher interest income on our cash and investments. Investment income (expense) and other increased during the nine months ended June 30, 2024, primarily due to higher interest income on our cash and investments and lower losses on our investments.
Previous wording
•During the three and six months ended March 31, 2024, a $184 million tax benefit as a result of the conclusion of an audit; and
Current wording
•During the nine months ended June 30, 2024, a $184 million tax benefit as a result of the conclusion of an audit; and
Previous 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.
Current wording
•During the nine months ended June 30, 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 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.
Current wording
Operating activities. Cash provided by operating activities for the nine months ended June 30, 2024 was lower than the prior-year comparable period primarily due to higher incentive payments and higher cash paid for taxes due to the timing of payments, partially offset by continued growth in our underlying business.
Previous 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.
Current wording
Investing activities. Cash used in investing activities for the nine months ended June 30, 2024 was higher than the prior-year comparable period primarily due to cash paid for acquisitions, net of cash acquired, the absence of cash received from the settlement of net investment hedge derivative instruments and higher purchases, net of maturities and sales, of investment securities. See Note 2—Acquisitionsto our unaudited consolidated financial statements.
Previous 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.
Current wording
Financing activities. Cash used in financing activities for the nine months ended June 30, 2024 was higher than the prior-year comparable period primarily due to higher share repurchases and higher dividends paid, partially offset by the absence of the principal debt payment upon maturity of our December 2022 senior notes. See Note 9—Stockholders’ Equityto our unaudited consolidated financial statements.
Previous 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.
Current wording
Common stock repurchases. During the nine months ended June 30, 2024, we repurchased shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.
Previous 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.
Current wording
Dividends. During the nine months ended June 30, 2024, we declared and paid $3.2 billion in dividends to holders of our common and preferred stock. On July 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
In December 2023, the FASB issued ASU 2023-09, which provides improvements to income tax disclosures. This standard requires disaggregated information related to effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for our annual periods beginning October 1, 2025, and requires prospective application with the option to apply the standard retrospectively. We are currently evaluating the impact of the ASU on our disclosures.
Current wording
In December 2023, the FASB issued ASU 2023-09, which provides improvements to income tax disclosures. This standard requires disaggregated information related to the effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for our annual periods beginning October 1, 2025, and requires prospective application with the option to apply the standard retrospectively. We are currently evaluating the impact of the ASU on our disclosures.