UPDATE: This article includes comments from the company's top executives and Visa's outlook for its new fiscal year.
Visa's Chief Executive Ryan McInerney was critical of the Department of Justice's antitrust lawsuit that alleges the payment card processor has a monopoly over the debit card industry.
"We believe the lawsuit is meritless and shows a clear lack of understanding of the payments ecosystem in the United States," McInerney said on a call with investors Tuesday night. "We will defend ourselves vigorously and are confident in our ability to demonstrate that Visa competes for every transaction in a thriving debit space that continues to grow and see new entrants."
The
The comments come as the card processor closed out the fourth quarter of its fiscal year 2024 with better-than-expected results, boosted by stable growth in its payments volume, crossborder volume and processed transactions.
Revenue in the three months ended Sept. 30 rose 12% year over year to $9.6 billion, topping analysts' estimates of $9.5 billion, according to S&P Global Capital IQ. Net income also edged out forecasts, up 14% to $5.3 billion, ahead of an expected net income of $5.2 billion. Earnings per diluted share landed at $2.65, ahead of an estimated $2.57 per diluted share.
Excluding a $109 million litigation provision in the year-ago quarter and other expenses, adjusted earnings for the fourth quarter came in at $2.71 a share. Analysts polled by S&P Global Capital IQ had expected $2.58 a share.
Full-year revenue tallied a 10% lift to $35.9 billion and net income rose 14% to $19.7 billion, both barely above analysts' expectations. However, earnings per share at $9.73 missed analysts' estimates of $10.57 due to a $46 million net loss from equity investments and a $76 million loss from the amortization of acquired intangible assets and asset-related costs.
In the new fiscal year, Visa expects to post high single-digit to low double-digit growth in revenue and earnings per share growth at the high end of low double-digit percentages.
McInerney touted a number of global partnership renewals during the call, including RBC, Canada's top credit card issuer, on consumer debit and credit, small business credit and commercial credit; U.S. Bank on its consumer and commercial portfolios; USAA on its consumer debit and credit portfolios; and other partnerships in Asia-Pacific, CEMEA and Latin America. The company also signed 650 fintechs from early stage to mature, an increase of 30% from the prior year, he said.
"We're winning region by region and market by market around the world," McInerney said. "You look at the size and sophistication of some of those names that I mentioned in my prepared remarks that I've mentioned for the last couple quarters, you know we are winning."
Shares of Visa rose nearly 3% in after-hours trading Tuesday.
Increases in revenue and EPS in the quarter were driven by "relatively stable growth" in payments volume, crossborder volume and processed transactions as well as "strong momentum across new flows and value-added services," according to Visa's press release.
Payments volume for the prior quarter ended June 30 — on which fourth-quarter revenue is based — increased 7% from the same reporting period in 2023 on a constant-dollar basis. This quarter, payment volume rose 8%.
Chief Financial Officer Chris Suh said consumer spending across all segments in the United States remained "relatively stable" when compared with the prior quarter. "Our data does not indicate any meaningful behavior change across consumer segments from last quarter."
In the United States, total payments volume grew 5% year over year, Suh said, in line with the previous quarter. Credit and debit also increased 5%. Card-present volume ticked up 2%, and card-not-present volume grew 6%.
Cross-border volume, excluding Europe, jumped 13% on a constant-dollar basis. Including Europe, total cross-border volume also increased 13%.
Latin America ratcheted up 24%; CEMEA climbed 19%; and Europe increased 12%, Suh said, while Asia Pacific increased less than 1% due to the "macroeconomic environment mostly in mainland China."
Total processed transactions in the fourth quarter landed at 61.5 billion, an increase of 10% from the prior year.
The fourth-quarter results were a continuation of solid earnings in the
Other credit card issuers have reported a slight softening in consumer credit and purchase volume this quarter on a year-over-year basis.
American Express, too, was contending with
Smaller credit card issuers that specialize in co-branded credit cards such as
Mastercard, the final credit card processing company to host an earnings call this quarter, reports earnings on Thursday ahead of the market open.
