Ayush Bansal
Image: The Verge
Visa Inc (V.N) beat Wall Street’s quarterly estimates on Thursday as more international travel and e-commerce drove increased spending volumes.
Chief Executive Al Kelly saw several drivers for Visa’s results, including continued growth in e-commerce and a faster-than-expected return of cross-border travel spending.
“As we look ahead, we do not believe the current surge in the pandemic will curtail the recovery,” he said in Visa’s earnings release. “We see economies around the world continuing to improve and, as restrictions are lifted, cross-border travel will continue to recover.”
Visa sees strong pent-up demand for travel that could help results as more countries ease pandemic-related restrictions. “You’re seeing that every time a border opens, there’s an extraordinary amount of travel,” Chief Financial Officer Vasant Prabhu
Financial Highlights
Net revenues in the fiscal first quarter were $7.1 billion, an increase of 24%, driven by the year-over-year growth in payments volume, cross-border volume, and processed transactions. Net revenues increased approximately 25% on a constant-dollar basis.
Payments volume for the three months ended September 30, 2021, on which fiscal first-quarter service revenue is recognized, increased 17% over the prior year on a constant-dollar basis.
Payments volume for the three months ended December 31, 2021. It was increased 20% over the prior year on a constant dollar basis.
Cross-border volume excluding transactions within Europe, which drive our international transaction revenues, increased 51% on a constant-dollar basis for the three months ended December 31, 2021.
Total cross-border volume on a constant dollar basis increased 40% in the quarter.
Total processed transactions, which represent transactions processed by Visa, for the three months ended December 31, 2021, were 47.6 billion, a 21% increase over the prior year.
Fiscal first-quarter service revenues were $3.2 billion, an increase of 19% over the prior year. They 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 19% over the prior year to $3.6 billion. International transaction revenues grew 50% over the prior year to $2.2 billion.
Other revenues of $449 million rose 17% over the prior year. Client incentives, a contra revenue item, were $2.4 billion and represented 25.1% of gross revenues.
About Visa Inc.
Visa (NYSE: V) is a world leader in digital payments. It facilitates transactions between consumers, merchants, financial institutions, and government entities across more than 200 countries and territories each year.
Our mission is to connect the world through the most innovative, convenient, reliable, and secure payments network, enabling individuals, businesses, and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.
Stock Movement
Visa is the third big payments company to report results this week, after earnings from American Express Co. AXP, +0.88%, and Mastercard Inc. MA, +5.51% were met with positive stock reactions.
Shares of Visa have lost 4.5% over the past three months as the Dow Jones Industrial Average DJIA, +0.36% has declined 3.8%.