VISA INC. Q4 FY2024 earnings call

• Fourth quarter net revenue was $9.6 billion, up 12% YOY with EPS up 16%. Constant dollar overall payments volume grew 8%, U.S. up 5%, international up 10%.
• Key business drivers: stable compared to Q3; processed transactions grew 10% YOY.
• Consumer payments: increased credentials and acceptance; over 4.6B credentials, 11.5B tokens, 150M global merchant locations.
• New flows: new flows revenue grew 22% YOY in constant dollars; Visa Direct transactions grew 38% to 2.8B; commercial volumes grew 5% YOY.
• Value-added services: revenue up 22% in constant dollars; progress in issuing solutions, risk and identity, acceptance, and advisory services.
• Deal highlights: significant renewals globally in various regions and with major clients.
• Mentioned the DoJ lawsuit as meritless and a lack of understanding of the payments ecosystem.

Net revenue for the fourth quarter was $9.6 billion, up 12% year-over-year. Consumer payments: over 4.6 billion credentials (up 7% YOY), 11.5 billion tokens (with over 30% of transactions tokenized), and global merchant locations crossed 150 million. New flows: new flows revenue grew 22% YOY in constant dollars, Visa Direct transactions grew 38% to 2.8 billion for the quarter, and commercial volumes grew 5% YOY. Value-added services: revenue was up 22% in constant dollars.

• 2025 adjusted net revenue growth expected in high single to low double digits.
• Adjusted operating expenses expected in high single digit to low double digits.
• Tax rate expected between 18% and 18.5%.
• Q1 2025 adjusted net revenue growth expected in high single digits; adjusted EPS growth in low double digits.
• Incentives expected to be a key driver, with more than 20% of payments volume impacted by renewals in 2025 compared to less than 15% in 2024.
• Volatility expected to no longer be a drag starting Q2 2025.
• Pricing impact expected to be different cadence with most incremental impact in April 2025.

• DoJ lawsuit, which is seen as meritless but poses regulatory and business complexity risks.
• Regulatory environment and potential impacts from new rules like the CFPB's open banking rule in the U.S.

Q: Thoughts on the U.S. regulatory and litigation environment, especially the DoJ lawsuit, and revenue exposure to U.S. debit?

A: Ryan stated they feel good about managing through regulatory complexity and competitive landscape; revenue exposure details not disclosed.

Q: Updated thoughts on competitive environment, especially pay by bank?

A: Ryan said pay by bank is not new, Walmart has existing capabilities, and account-to-account payments will proliferate with Visa adding value.

Q: Growth rate expectation for commercial volumes going forward?

A: Chris said they're optimistic about commercial volumes growing ahead of consumer volumes over time.

Q: Role of AI in Visa's business model, especially with Featurespace acquisition?

A: Ryan said Featurespace acquisition is for combating fraud, and AI is used for productivity and product differentiation across various business areas.

Q: How growth in 2025 might differ from 2024 across segments?

A: Chris said variables like incentives, cross-border volumes, volatility, and macro economy can impact growth, with key variables including incentives, cross-border volumes, volatility, and macro economy.

Q: Opportunities and headwinds from CFPB's open banking rule?

A: Ryan said they're advocates for consumer data control securely, and Visa brand can be a differentiator in open banking.

Q: Growth drivers and planning process for value-added services?

A: Ryan said value-added services growth comes from services for Visa transactions, non-Visa transactions, and services beyond payments, with planning across various business lines.

Q: Gap between cross-border volume growth and revenue growth?

A: Chris said it was due to volatility and lower volume growth compared to last year.

Q: Growth rates of DPS and CyberSource within value-added services?

A: Ryan said they're proud of progress but don't provide detailed growth metrics at that level.

Q: October volume growth pickup and price to value timing change?

A: Chris said October growth was affected by days mix and Reg II lap; Ryan said price to value timing changed due to product pipeline backloading.

Q: Operating leverage and APAC assumptions in guidance?

A: Ryan said they're pursuing opportunities with balanced growth; Chris said APAC performance depends on macroeconomic conditions in China.

Q: Percentage of VAS revenue tied to VisaNet?

A: Ryan said largest component is services for Visa transactions, but they're also growing platforms for non-Visa transactions.