Visa : 1Q 2021 Earnings Presentation

January 28, 2021 at 04:10 pm EST

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Fiscal First Quarter 2021 Results

	Net	Client Incentives			Diluted Class A
	as a % of			Common Stock
YoY Increase / (Decrease)	Revenues	Gross Revenue	Operating Expense	Effective Tax Rate	Earnings Per Share
GAAP Nominal-Dollar Basis	(6%)*	24.6%	(10%)	16.6%	(3%)
Non-GAAPNominal-Dollar Basis(1)	(10%)	16.6%	(3%)

Foreign Currency Impact	(~0.5%)		(~0.5%)		(~1%)
Acquisition Impact	~0%	0%	(~0.5%)	0%	~0%
Adjusted Constant-Dollar Basis(2)	(7%)	24.6%	(10%)	16.6%	(4%)

Had we recognized service revenues on current quarter payments volume and other revenue components remained unchanged, it would have had minimal impact on our net revenue growth.

Non-GAAPresults exclude equity investment gains and losses, amortization of acquired intangible assets for acquisitions in fiscal year 2019 and subsequent periods, and non-recurringacquisition-related costs.
Adjusted financial results are on a constant-dollar basis and exclude the impact of the non-GAAP items and operating revenues and expenses of the acquired entities that were not in the entire quarter of the previous year and the incremental interest expense or forgone interest income as a result of funding the acquisition through debt or cash, respectively.

Note: Refer to Non-GAAP and Adjusted Constant-Dollar Results Footnote for further information.

Fiscal First Quarter 2021 Financial Results

Non-GAAP and Adjusted Constant-Dollar Results Footnote

We consider non-GAAP measures useful to investors because they provide greater transparency into management´s view and assessment of the Company´s ongoing operating performance by removing items management believes are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends. We believe these measures to be useful to enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with the Company´s core operations. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

We exclude the following to arrive at our Adjusted Constant-Dollar Financial Results:

non-GAAPimpacts of (refer to the financial tables in the earnings release for further details):
- special items;
- equity investment gains and losses;
- amortization of acquired intangible assets for acquisitions in fiscal year 2019 and subsequent periods;
- non-recurringacquisition-related costs;
impact of foreign currency to provide currency-neutral growth rates which management believes are a better reflection of the underlying performance of our business; and
impact of acquisitions, which include operating revenues and expenses of the acquired entities that were not in the entire quarter of the previous year and the incremental interest expense or forgone interest income as a result of funding the acquisition through debt or cash, respectively, which management believes enhances the comparability of our results. These amounts will be adjusted until we lap the quarter that the entity was acquired in, at which time there will be comparable results within each reported period.

Fiscal First Quarter 2021 Financial Results

Fiscal First Quarter 2021 Results

Payments volume, cross-border volume and processed transactions growth all improved versus the prior quarter
Returned $2.5B of capital to shareholders in the form of share repurchases and dividends
The board of directors authorized a new $8.0 billion share repurchase program, bringing total funds available for share repurchase to over $11 billion

In billions, except percentages and per share data. % change is calculated over the comparable prior-year period.		Q1 2021
USD		% Change


Net Revenues	$5.7	(6%)
GAAP Net Income	$3.1	(4%)

GAAP Earnings Per Share	$1.42	(3%)
Non-GAAP Net Income(1)	$3.1	(4%)

Non-GAAP Earnings Per Share(1)	$1.42	(3%)

Non-GAAPresults exclude equity investment gains and losses, amortization of acquired intangible assets and non-recurringacquisition-related costs.

Q1 2021 Key Business Drivers

(YoY increase / (decrease), volume in constant dollars)

	Q1 2021
Payments Volume	5%
Cross-Border Volume Excluding Intra-Europe(1)	(33%)
Cross-Border Volume Total	(21%)
Processed Transactions	4%

Cross-bordervolume excluding transactions within Europe.

Fiscal First Quarter 2021 Financial Results

Operational Performance Metrics Monthly Summary

U.S. Payments Volume Results

40%	Total	Credit	Debit

30%

20%

10%

(10%)

(20%)

(30%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

1-21

50%

Total

Card Present

Card Not Present

Card Not Present, Excluding Travel

30%

10%

(10%)

(30%)

(50%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

1-21

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Operational Performance Metrics Monthly Summary

Processed Transactions Results

15%

(5%)

(15%)

(25%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

1-21

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Operational Performance Metrics Monthly Summary

Cross-Border Volume Results (Constant Dollar)

10%	Excluding Intra-Europe	Total

(10%)

(20%)

(30%)

(40%)

(50%)

(60%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

1-21

Cross-Border Volume Excluding Intra-Europe Results (Constant Dollar)

30%

Total

Card Present + Card Not Present Travel

Card Not Present

Card Not Present, Excluding Travel

10%

(10%)

(30%)

(50%)

(70%)

(90%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

1-21

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Operational Performance Metrics Weekly Summary

U.S. Payments Volume Results

	40%								Total					Credit					Debit



	30%

	20%

	10%

	0%

	(10%)
			October							November						December						January


	8	15	22	29	5	12	19	26			3	10	17	24	31	7	14	21

												Week Ended
	50%					Total				Card Present						Card Not Present				Card Not Present, Excluding Travel



	40%

	30%

	20%

	10%

	0%

	(10%)

	(20%)
			October							November						December						January


	8	15	22	29	5	12	19	26			3	10	17	24	31	7	14	21

												Week Ended
Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.
7	Fiscal First Quarter 2021 Financial Results																				©2021 Visa. All rights reserved.

Operational Performance Metrics Weekly Summary

Processed Transactions Results

	October						November					December				January

8	15	22	29	5	12	19	26	3	10	17	24	31	7	14	21

								Week Ended

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Operational Performance Metrics Weekly Summary

Cross-Border Volume Results (Constant Dollar)

0%	Excluding Intra-Europe	Total

(10%)

(20%)

(30%)

(40%)

(50%)

				October							November							December					January

	8	15		22	29		5	12	19	26			3	10	17	24	31	7	14	21

															Week Ended
								Cross-Border Volume Excluding Intra-Europe Results (Constant Dollar)
	20%					Total						Card Present + Card Not Present Travel						Card Not Present			Card Not Present, Excluding Travel




	0%


	(20%)


	(40%)


	(60%)


	(80%)

			October							November							December					January


	8	15		22	29		5	12	19	26			3	10	17	24	31	7	14	21

															Week Ended
Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.
9	Fiscal First Quarter 2021 Financial Results																				©2021 Visa. All rights reserved.

Payments Volume Results

Q1 FY2021

Visa Inc.

Credit

Debit

Nominal

Constant

17%17%

5%5%

		(5%)	(6%)

Nominal USD (in billions)	$535	$605
U.S.	$1,140
International	$1,333	$679	$653
Total	$2,473	$1,215	$1,258

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Payments Volume Results

Q4 FY2020

Nominal

Constant

Visa Inc.	Credit	Debit
	20%	20%

4%4%

		(10%)	(9%)
Nominal USD (in billions)	$493	$603
U.S.	$1,097
International	$1,252	$628	$624
Total	$2,349	$1,121	$1,227

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Transactions and Cross-Border Volume Results

Q1 FY2021
		Transactions			Cross-Border
	Total	Payments	Processed			Constant
		4%	4%	Total	Total	(excluding
	2%	Nominal	Constant	Intra-Europe)(1)

Transaction Count (in millions)		(18%)	(21%)

Credit	18,045	17,878
Debit	37,902	33,577				(33%)
Total	55,947	51,455	39,213	(1) Cross-border volume excluding transactions within Europe.

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Total Cards (in millions)

Q4 FY2020

2019

2020

3,372 3,505

2,243 2,364

1,130 1,141

Total Visa Inc.	Credit	Debit
4%	1%	5%

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

Fiscal First Quarter 2021 Financial Results

Revenue Results

Q1 FY2021

Reported Adjusted

5%	6%	5%	6%

(3%)

(6%) (7%)

(28%)

		International		Gross	Client	Net
Service	Data Processing	Transaction	Other
Revenues	Revenues	Revenues	Revenues	Revenues	Incentives	Revenues

Reported Nominal USD (in millions)					$5,687
$2,677	$3,033	$1,451	$384	$7,545	$1,858

Client Incentives as a % of

Gross Revenue

24.6%

Note: The chart results are calculated over the comparable prior-year period. Refer to Non-GAAP and Adjusted Constant-Dollar Results Footnote for further information on adjusted results. Percentage changes are calculated based on unrounded numbers.

Fiscal First Quarter 2021 Financial Results

Operating Expense Results

Q1 FY2021

Reported

Non-GAAP

Adjusted

165% 165%

8% 8%

0%	0%			(4%)	(4%)					(10%)	(10%)	(10%)

						(21%)	(21%)
		(25%)	(25%)
							(35%)	(35%)
									Total
				Network &	Professional	Depreciation &	General &	Litigation
Personnel	Marketing	Operating
Processing	Fees	Amortization	Administrative	Provision
				Expenses

Reported Nominal USD (in millions)
	$981	$205	$173	$83	$197	$203	$1	$1,843

Note: The chart results are calculated over the comparable prior-year period. Refer to Non-GAAP and Adjusted Constant-Dollar Results Footnote for further information on non-GAAP and adjusted results. Percentage changes are calculated based on unrounded numbers. Refer to the financial tables in the earnings release for further details and a reconciliation of the non-GAAP measures presented.

Fiscal First Quarter 2021 Financial Results

Other Financial Results and Highlights

Visa continues to monitor the COVID-19 impact globally. During the quarter, several countries experienced a rise in cases and implemented restrictive measures, primarily impacting card spending. While cross-border spending did improve for the quarter, it remains depressed, led by travel spending, as the majority of borders remain closed. Card not present excluding travel in both domestic and cross-border volume continued to grow at elevated levels.
On November 20, 2020, Visa announced it completed the acquisition of YellowPepper. We believe this acquisition will accelerate the adoption of Visa's "network of networks" strategy in Latin America and the
Caribbean by significantly reducing the time-to-market and cost for issuers and processors associated with accessing innovative and interoperable solutions, regardless of who owns or operates the payment rails.
On December 14, 2020, Visa repaid $3.0 billion of principal upon maturity of its senior notes.
On January 12, 2021, Visa and Plaid announced that the companies mutually terminated their merger agreement and agreed with the Department of Justice to dismiss the litigation related to the proposed transaction. The proposed transaction was first announced on January 13, 2020.

Fiscal First Quarter 2021 Financial Results

Operational Performance Data Footnote

Current quarter payments volume and other select metrics are provided in the operational performance data supplement in the earnings release to provide more recent operating data. Service revenues continue to be recognized based on payments volume in the prior quarter.

Total transactions represent payments and cash transactions as reported by Visa clients on their operating certificates. Processed transactions represent transactions involving cards and other form factors carrying the Visa, Visa Electron, Interlink, V PAY and PLUS cards processed on Visa's networks.

On occasion, reported payments volume, transaction and card information may be updated to reflect revised client submissions or other adjustments. Prior-period updates, other than the change to the payments volume definition, are not material. Figures may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers. Constant-dollar growth rates exclude the impact of foreign currency fluctuations against the U.S. dollar in measuring performance.

Fiscal First Quarter 2021 Financial Results

Free Cash Flow

We had cash, cash equivalents and investment securities of $18.2 billion as of December 31, 2020.

(USD in millions)

Calculation of Free Cash Flow	Q1 2021

Net cash provided by operating activities	$3,513

Less: capital expenditures	(160)

Free Cash Flow(1)	$3,353

Free Cash Flow is cash provided by operating activities adjusted to reflect capital investments made in the business

Cash Returned to Shareholders	Q1 2021

Share repurchases	$1,766

Dividends	$703

Note: Management believes that this presentation is useful to measure Visa's generation of cash available to first re-invest in the business, and then return excess cash to shareholders through stock repurchases and cash dividends.

18 Fiscal First Quarter 2021 Financial Results

Forward-Looking Statements

This presentation 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 underlying business drivers and other volume and transaction trends as a result of COVID-19, our future operations, prospects, developments, strategies and business growth. Forward-looking statements generally are identified by words such as "anticipates," "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:

impact of global economic, political, market, health and social events or conditions, including the impact of COVID-19;
increased oversight and regulation of the global payments industry and our business;
impact of government-imposed obligations and/or 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, acquirers, processors, merchants and other third parties;
brand or reputational damage;
exposure to loss or illiquidity due to settlement guarantees;
the impact of the United Kingdom's withdrawal from the European Union;
a disruption, failure, breach or cyber-attack of our networks or systems;
risks, uncertainties and the failure to achieve the anticipated benefits with respect to 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, 2020, 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.

Fiscal First Quarter 2021 Financial Results

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Visa Inc. published this content on 28 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 January 2021 21:09:08 UTC.

Market Closed - Nyse Other stock markets 04:00:02 2024-04-24 pm EDT			5-day change	1st Jan Change
275 ^USD	+0.32%		+0.85%	+5.63%

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