Visa : 2019 Q1 Earnings Releases

Visa Inc. Reports Fiscal First Quarter 2019 Results

San Francisco, CA, January 30, 2019 - Visa Inc. (NYSE: V)

•  Net income of $3.0B or $1.30 per share

•  Net revenues of $5.5B, an increase of 13%

•  Underlying business drivers remained healthy: continued double-digit growth in payments volume and processed transactions; cross-border growth slowed

•  Returned $2.9B of capital to shareholders in the form of share repurchases and dividends

•  The board of directors authorized a new $8.5 billion share repurchase program

Q1 2019 Results

(Ending December 31, 2018)

in billions, except percentages and per share data

Alfred F. Kelly, Jr. , Chief Executive Officer, Visa Inc., commented on the results:

GAAP Net Income

$3.0

18%

Adjusted Net Income(1)

$3.0

17%

GAAP Earnings Per Share

$1.30

21%

"We delivered strong results in our fiscal first quarter, generating 13% revenue and 21% earnings per share growth against the backdrop of an uncertain geopolitical environment. As we look ahead in 2019, we remain focused on our strategy to grow the pie for payments through deeper and new relationships, expansion into new segments and payment flows and a broadening of our acceptance footprint."

Adjusted Earnings Per Share(1)

$1.30

21%

(1) Adjusted Net Income and Adjusted Earnings Per Share exclude special items in the prior fiscal year. There were no comparable adjustments in the current fiscal year.

Q1 2019 Key Business Drivers

(YoY growth, volume in constant dollars)

Payments volume	Cross-border volume	Processed transactions
+11%	+7%	+11%

Fiscal First Quarter 2019 - Financial Highlights

Net income in the fiscal first quarter was $3.0 billion or $1.30 per share, increases of 18% and 21%, respectively, over prior year's results. Excluding two special items in prior year's results related to U.S. tax reform, adjusted net income and adjusted earnings per share increased 17% and 21%, respectively, over prior year's results (refer to the accompanying financial tables for further details and a reconciliation of the non-GAAP measures presented). Exchange rate shifts versus the prior year negatively impacted earnings per share growth by approximately 0.5 percentage points. All references to earnings per share assume fully-diluted class A share count.

Net revenues in the fiscal first quarter were $5.5 billion, an increase of 13%, driven by continued growth in payments volume, cross-border volume and processed transactions. Exchange rate shifts versus the prior year negatively impacted reported net revenues growth by approximately 0.5 percentage points. The Company adopted the new revenue accounting standard effective October 1, 2018, which positively impacted reported net revenues growth by approximately 1 percentage point.

Payments volume for the three months ended September 30, 2018, on which fiscal first quarter service revenues are recognized, grew 12% over the prior year on a constant-dollar basis.

Payments volume for the three months ended December 31, 2018, grew 11% over the prior year on a constant-dollar basis.

Cross-border volume growth, on a constant-dollar basis, was 7% for the three months ended December 31, 2018.

Total processed transactions, which represent transactions processed by Visa, for the three months ended December 31, 2018, were 33.9 billion, an 11% increase over the prior year.

Fiscal first quarter service revenues were $2.3 billion, an increase of 9% over the prior year, and 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 15% over the prior year to $2.5 billion. International transaction revenues grew 11% over the prior year to $1.9 billion. Other revenues of $299 million rose 30% over the prior year. Client incentives, which are a contra revenue item, were $1.5 billion and represent 20.9% of gross revenues.

Operating expenses were $1.8 billion for the fiscal first quarter, a 17% increase over the prior year's results, primarily driven by personnel and marketing costs. The new revenue accounting standard increased reported operating expense growth by approximately 2.5 percentage points.

Effective income tax rate was 18.0% for the quarter ended December 31, 2018.

Cash, cash equivalents and investment securities were $15.9 billion as of December 31, 2018.

The weighted-average number of diluted shares of class A common stock outstanding was 2.29 billion for the quarter ended December 31, 2018.

Fiscal First Quarter 2019 - Payments Volume Definition Update

As Visa's business continues to evolve beyond purchases at merchants, Visa updated its definition of reported Payments Volume to account for all new payment flows carrying the Visa, Visa Electron, V PAY and Interlink brands. The updated definition now includes all disbursement, or "push payment", volume. The previous definition only included funding, or "pull payment", volume related to Visa Direct. All prior periods have been adjusted to reflect the updated definition that better captures the payments volume for which Visa receives revenue. Refer to the operational performance data for the impact of the definition change on the current and prior periods.

Fiscal First Quarter 2019 - Other Notable Items

On January 24, 2019, the district court granted preliminary approval of the settlement which was announced in September 2018 to resolve monetary class claims in the multi-district interchange litigation. The court scheduled a final approval hearing in November 2019.

During the three months ended December 31, 2018, the Company repurchased 16.9 million shares of class A common stock, at an average price of $137.82 per share, using $2.3 billion of cash on hand. The board of directors authorized a new $8.5 billion class A common stock share repurchase program on January 29, 2019. Including this additional authorization, the Company now has $9.8 billion of funds available for share repurchase.

On January 29, 2019, the board of directors declared a quarterly cash dividend of $0.25 per share of class A common stock (determined in the case of class B and C common stock and series B and C convertible participating preferred stock on an as-converted basis) payable on March 5, 2019, to all holders of record as of February 15, 2019.

Financial Outlook for Fiscal Full-Year 2019

Visa Inc. reaffirms its fiscal full-year 2019 financial outlook for the following metrics:

•  Annual net revenue growth: Low double-digits on a nominal basis, with approximately 1 percentage point of negative foreign currency impact and de minimus impact from the new revenue accounting standard

•  Client incentives as a percentage of gross revenues: 22% to 23% range

•  Annual operating expense growth: Mid-single digit decrease on a GAAP basis and mid-to-high single digit increase adjusted for special items in fiscal 2018 (see note below). GAAP and non-GAAP growth includes an approximately 1.5 to 2 percentage point increase from the new revenue accounting standard

•  Effective tax rate: 20.0% to 20.5% range

•  Annual diluted class A common stock earnings per share growth: High teens on a GAAP nominal dollar basis and mid-teens on an adjusted, non-GAAP nominal dollar basis (see note below). Both include approximately 1 percentage point of negative foreign currency impact

Note: Annual adjusted operating expense growth is derived from adjusted full-year 2018 operating expenses of $6.9 billion. Annual adjusted diluted class A common stock earnings per share growth is derived from adjusted full-year 2018 earnings per share results of $4.61. Refer to the accompanying financial tables for details and a reconciliation of the adjusted fiscal full-year 2018 results.

Fiscal First Quarter 2019 Earnings Results Conference Call Details

Visa's executive management team will host a live audio webcast beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss the financial results and business highlights. All interested parties are invited to listen to the live webcast athttp://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days. Investor information, including supplemental financial information, is available on Visa Inc.'s Investor Relations website athttp://investor.visa.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, our future operations, prospects, developments, strategies, business growth and financial outlook for fiscal full-year 2019. Forward-looking statements generally are identified by words such as "believes," "estimates," "expects," "intends," "may," "projects," "outlook", "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.

Actual results could differ materially from those expressed in, or implied by, our forward-looking statements due to a variety of factors, including, but not limited to:

•  increased oversight and regulation of the global payments industry and our business;

•  impact of government-imposed restrictions on international payment systems;

•  outcome of tax, litigation and governmental investigation matters;

•  increasingly intense competition in the payments industry, including competition for our clients and merchants;

•  proliferation and continuous evolution of new technologies and business models;

•  our ability to maintain relationships with our clients, merchants and other third parties;

•  brand or reputational damage;

•  management changes;

•  impact of global economic, political, market and social events or conditions;

•  exposure to loss or illiquidity due to settlement guarantees;

•  uncertainty surrounding the impact of the United Kingdom's withdrawal from the European Union;

•  a disruption, failure, breach or cyber-attack of our networks or systems;

•  our ability to successfully integrate and manage our acquisitions and other strategic investments; and

•  other factors described in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended September 30, 2018, and our 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.

About Visa Inc.

Visa Inc. (NYSE: V) is the world's leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. Our relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit usa.visa.com/about-visa.html, usa.visa.com/visa-everywhere/blog.html and @VisaNews.

Contacts

Investor Relations	Media Relations
Mike Milotich, 650-432-7644,	Will Stickney, 650-432-2990,
[e-mail]	[e-mail]

Fiscal First Quarter 2019 - Financial Summary

Q1 FISCAL 2019 INCOME STATEMENT SUMMARY

(in millions, except percentages and per share data)

Revenues Service revenues

Data processing revenues International transaction revenues Other revenues

Three Months Ended December 31, 2018		YoY Change
GAAP	Adjusted	GAAP	Adjusted

$

2,342

$

2,342

9% 9%

2,470

2,470

15% 15%

1,851

1,851

11% 11%

299

299

30% 30%

Client incentives Net revenues

(1,456)

(1,456)

10% 10%

5,506

5,506

13% 13%

Operating Expenses Personnel

Marketing

Network and processing Professional fees Depreciation and amortization General and administrative Litigation provision

807

807

19% 19%

276

276

24% 24%

173

173

8% 8%

91

91

(1%) (1%)

159

159

9% 9%

276

276

17% 17%

7

7

NM

NM

Total operating expenses

17% 17%

Operating income

12% 12%

Non-operating expense Effective tax rate

1,789 3,717

1,789 3,717

Net income

18% 17%

(87) 18.0% 2,977 1.30

(87) 18.0% 2,977 1.30

(1%) (1%)

(4 ppts)

(4 ppts)

21% 21%

Earnings per share NM - Not Meaningful

$ $

Q1 FISCAL 2019 KEY BUSINESS DRIVERS

Payments volume Cross-border volume Processed transactions

$ $

YoY Change
Constant	Nominal
11% 7%
7% 3%
11% 11%

11% 7%

7% 3%

11% 11%