We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Visa (V) Q2 Earnings Beat Estimates on Rising Payment Volume
Read MoreHide Full Article
Visa Inc. (V - Free Report) reported second-quarter fiscal 2023 earnings of $2.09 per share, which beat the Zacks Consensus Estimate of $1.97 by 6.1% and our estimate of $1.92. The bottom line improved 17% year over year.
Net revenues amounted to $7,985 million, which advanced 11% year over year in the quarter under review. The top line outpaced the consensus mark by 3% and our estimate of $7,596.9 million.
The solid quarterly results benefited on the back of higher payments, and cross-border volumes and processed transactions. Steady cross-border travel growth and lower-than-expected client incentives aided the results, partially offset by higher costs.
Visa’s payment volume grew 10% year over year on a constant-dollar basis in the fiscal second quarter. Processed transactions (implying transactions processed by Visa) totaled 50.1 billion, which rose 12% year over year and beat our estimate of 49 billion.
On a constant-dollar basis, the cross-border volume of Visa climbed 24% year over year in the quarter under review. Excluding transactions within Europe, its cross-border volume (that boosts a company’s international transaction revenues) advanced 32% year over year on a constant-dollar basis.
Service revenues improved 7% year over year to $3.8 billion in the March-end quarter on the back of better payment volume. The metric beat the Zacks Consensus Estimate and our estimate of $3.6 billion.
V’s data processing revenues of $3.8 billion grew 10% year over year in the quarter under review, meeting our estimate and beating the consensus mark of $3.7 billion.
International transaction revenues advanced 24% year over year to $2.7 billion, which outpaced the Zacks Consensus Estimate by 1.7% and our estimate of $2.5 billion on higher cross-border volume. Other revenues of $551 million climbed 16% year over year, which missed the consensus mark of $570.6 million but beat our estimate of $514.1 million.
Client incentives (a contra-revenue item) of Visa escalated 18% year over year to $2.9 billion in the quarter under review. The metric amounted to 26.7% of Visa’s gross revenues of $10.9 billion.
Total operating expenses of $2.6 billion increased 11% year over year, missing our estimate of $2.7 billion. The increase was due to elevated personnel costs and professional fees. Non-GAAP operating expenses escalated 13% year over year. Interest expenses were $142 million, up 3.6% year over year.
Balance Sheet (as of Mar 31, 2023)
Visa exited the March-end quarter with cash and cash equivalents of $13.8 billion, which dropped from the prior-year-end level of $15.7 billion.
Total assets of $86.8 billion increased from the fiscal 2022 end level of $85.5 billion.
V’s long-term debt was $20.6 billion, which inched up from the prior-year-end level of $20.2 billion.
Total equity grew from the fiscal 2022 end level of $35.6 billion to $38.6 billion.
Cash Flows
Visa generated net cash from operations of $8,031 million in the six months ended Mar 31, 2023, which increased from $7,721 million a year ago. The fiscal second quarter free cash flows of $3,650 million rose from $3,222 million a year ago.
Capital Deployment Update
Visa rewarded $3.2 billion to shareholders via share buybacks of $2.2 billion and dividends of $1 billion in the March-end quarter. V authorized funds of $11.8 billion remaining under its share buyback program as of Mar 31, 2023.
On Apr 25, 2023, management sanctioned a quarterly cash dividend of 45 cents per share, which will be paid out on Jun 1, 2023, to shareholders of record as of May 12, 2023.
Outlook
Net revenues are estimated to register low-double-digit growth in the fiscal third quarter. Client incentives are expected to remain at the upper side of 26.5-27.5% of gross revenues.
The growth rate in domestic payments volume is expected to decline in the third quarter of fiscal 2023, while the strength seen in the international market will likely continue. The fiscal third quarter tax rate is expected to be 19-19.5%.
Non-GAAP operating expense growth is likely to witness a moderation throughout fiscal 2023. From expense growth recorded in second-quarter fiscal 2023, growth of expenses on a nominal dollar basis is anticipated to decline two or three points in the third quarter of fiscal 2023. The non-GAAP operating expense growth rate in the fiscal fourth quarter is likely to face a further reduction of two to three points.
Headquartered in Miami, International Money Express offers money remittance services. The Zacks Consensus Estimate for IMXI’s 2023 earnings indicates a 24.3% year-over-year increase.
Herzliya, Israel-based Nayax operates a payment platform globally. The Zacks Consensus Estimate for NYAX’s 2023 earnings indicates a 54.4% year-over-year improvement.
Based in Berwyn, PA, Envestnet is a wealth management services provider. The Zacks Consensus Estimate for ENV’s 2023 earnings suggests a 12.9% improvement from year-ago levels.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Visa (V) Q2 Earnings Beat Estimates on Rising Payment Volume
Visa Inc. (V - Free Report) reported second-quarter fiscal 2023 earnings of $2.09 per share, which beat the Zacks Consensus Estimate of $1.97 by 6.1% and our estimate of $1.92. The bottom line improved 17% year over year.
Net revenues amounted to $7,985 million, which advanced 11% year over year in the quarter under review. The top line outpaced the consensus mark by 3% and our estimate of $7,596.9 million.
The solid quarterly results benefited on the back of higher payments, and cross-border volumes and processed transactions. Steady cross-border travel growth and lower-than-expected client incentives aided the results, partially offset by higher costs.
Visa Inc. Price, Consensus and EPS Surprise
Visa Inc. price-consensus-eps-surprise-chart | Visa Inc. Quote
Operational Performance
Visa’s payment volume grew 10% year over year on a constant-dollar basis in the fiscal second quarter. Processed transactions (implying transactions processed by Visa) totaled 50.1 billion, which rose 12% year over year and beat our estimate of 49 billion.
On a constant-dollar basis, the cross-border volume of Visa climbed 24% year over year in the quarter under review. Excluding transactions within Europe, its cross-border volume (that boosts a company’s international transaction revenues) advanced 32% year over year on a constant-dollar basis.
Service revenues improved 7% year over year to $3.8 billion in the March-end quarter on the back of better payment volume. The metric beat the Zacks Consensus Estimate and our estimate of $3.6 billion.
V’s data processing revenues of $3.8 billion grew 10% year over year in the quarter under review, meeting our estimate and beating the consensus mark of $3.7 billion.
International transaction revenues advanced 24% year over year to $2.7 billion, which outpaced the Zacks Consensus Estimate by 1.7% and our estimate of $2.5 billion on higher cross-border volume. Other revenues of $551 million climbed 16% year over year, which missed the consensus mark of $570.6 million but beat our estimate of $514.1 million.
Client incentives (a contra-revenue item) of Visa escalated 18% year over year to $2.9 billion in the quarter under review. The metric amounted to 26.7% of Visa’s gross revenues of $10.9 billion.
Total operating expenses of $2.6 billion increased 11% year over year, missing our estimate of $2.7 billion. The increase was due to elevated personnel costs and professional fees. Non-GAAP operating expenses escalated 13% year over year. Interest expenses were $142 million, up 3.6% year over year.
Balance Sheet (as of Mar 31, 2023)
Visa exited the March-end quarter with cash and cash equivalents of $13.8 billion, which dropped from the prior-year-end level of $15.7 billion.
Total assets of $86.8 billion increased from the fiscal 2022 end level of $85.5 billion.
V’s long-term debt was $20.6 billion, which inched up from the prior-year-end level of $20.2 billion.
Total equity grew from the fiscal 2022 end level of $35.6 billion to $38.6 billion.
Cash Flows
Visa generated net cash from operations of $8,031 million in the six months ended Mar 31, 2023, which increased from $7,721 million a year ago. The fiscal second quarter free cash flows of $3,650 million rose from $3,222 million a year ago.
Capital Deployment Update
Visa rewarded $3.2 billion to shareholders via share buybacks of $2.2 billion and dividends of $1 billion in the March-end quarter. V authorized funds of $11.8 billion remaining under its share buyback program as of Mar 31, 2023.
On Apr 25, 2023, management sanctioned a quarterly cash dividend of 45 cents per share, which will be paid out on Jun 1, 2023, to shareholders of record as of May 12, 2023.
Outlook
Net revenues are estimated to register low-double-digit growth in the fiscal third quarter. Client incentives are expected to remain at the upper side of 26.5-27.5% of gross revenues.
The growth rate in domestic payments volume is expected to decline in the third quarter of fiscal 2023, while the strength seen in the international market will likely continue. The fiscal third quarter tax rate is expected to be 19-19.5%.
Non-GAAP operating expense growth is likely to witness a moderation throughout fiscal 2023. From expense growth recorded in second-quarter fiscal 2023, growth of expenses on a nominal dollar basis is anticipated to decline two or three points in the third quarter of fiscal 2023. The non-GAAP operating expense growth rate in the fiscal fourth quarter is likely to face a further reduction of two to three points.
Zacks Rank & Other Key Picks
Visa currently has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Business Services space are International Money Express, Inc. (IMXI - Free Report) , Nayax Ltd. (NYAX - Free Report) and Envestnet, Inc. (ENV - Free Report) . While International Money Express currenty sports a Zacks Rank #1 (Strong Buy), Nayax and Envestnet carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Miami, International Money Express offers money remittance services. The Zacks Consensus Estimate for IMXI’s 2023 earnings indicates a 24.3% year-over-year increase.
Herzliya, Israel-based Nayax operates a payment platform globally. The Zacks Consensus Estimate for NYAX’s 2023 earnings indicates a 54.4% year-over-year improvement.
Based in Berwyn, PA, Envestnet is a wealth management services provider. The Zacks Consensus Estimate for ENV’s 2023 earnings suggests a 12.9% improvement from year-ago levels.