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Visa's (V) Q3 Earnings Beat on Strong Cross-Border Volume
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Visa Inc. (V - Free Report) reported fiscal third-quarter 2022 earnings of $1.98 per share, which outpaced the Zacks Consensus Estimate by 13.8%. The bottom line climbed 33% year over year.
Net revenues improved 19% year over year to $7.3 billion during the June quarter. The top line beat the consensus mark by 3.1%.
The quarterly results were aided by continued growth in payments volume, cross-border volume and processed transactions. With the global economy in its recovery phase and individuals gaining confidence in traveling, cross-border travel volume of Visa in the quarter under review has exceeded the 2019 levels for the first time ever since the onset of the pandemic in early 2020. However, elevated operating costs partly offset the upside.
On a constant-dollar basis, payments volume of Visa rose 12% year over year in the June quarter. Processed transactions (implying transactions processed by Visa) advanced 16% year over year to 49.3 billion.
Total cross-border volume of Visa, on a constant dollar basis, surged 40% year over year in the quarter under review. Excluding transactions within Europe, V’s cross-border volume (that usually boosts the company’s international transaction revenues) surged 48% year over year on a constant-dollar basis.
Service revenues of $3.2 billion improved 13% year over year during the June quarter, thanks to higher payments volume in the prior quarter. Data processing revenues grew 8% year over year to $3.6 billion, while other revenues of $517 million registered year-over-year growth of 26%. Meanwhile, international transaction revenues surged 51% year over year to $2.6 billion in the quarter under review.
Client incentives (a contra-revenue item) increased 23.8% year over year to $2.6 billion. The metric accounted for 26.1% of Visa’s gross revenues of $9.8 billion.
Operating expenses of $2.4 billion escalated 15% year over year, mainly due to higher personnel as well as general and administrative expenses.
Net interest expense declined 15.3% year over year to $111 million in the June quarter.
Balance Sheet (as of Jun 30, 2022)
Visa exited the June quarter with cash and cash equivalents of $14 billion, which plunged 14.8% from fiscal year-end Sep 30, 2021.
Total assets of $85.4 billion increased 3% from fiscal year-end Sep 30, 2021.
Long-term debt amounted to $20.5 billion, up 2.8% from fiscal year-end Sep 30, 2021. Current maturities of debt amounted to $3.2 billion.
Total equity of $35.5 billion dropped 5.6% from fiscal year-end Sep 30, 2021.
Cash Flow
In the June quarter, net cash provided by operating activities totaled $5.3 billion, which increased 19% year over year. Free cash flow of $5 billion climbed 18.5% over the year.
Capital Deployment Update
Visa rewarded $3.3 billion to shareholders to the tune of $2.5 billion in share buybacks and dividends of $798 million in the June quarter. As of Jun 30, 2022, V had leftover authorized funds of $7.2 billion under its share buyback program.
On Jul 22, 2022, the board of directors of Visa approved a quarterly cash dividend of 37.5 cents per share. The dividend will be paid on Sep 1, 2022, to shareholders of record as of Aug 12.
Of the Business Services sector players that have already released their respective quarterly results so far, the bottom lines of Equifax Inc. (EFX - Free Report) , Robert Half International Inc. (RHI - Free Report) and Fiserv, Inc. beat the Zacks Consensus Estimate.
Equifax reported adjusted earnings (excluding 46 cents from non-recurring items) of $2.09 per share, which beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. However, EFX’s revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year on a reported basis and 8% on a local-currency basis. Adjusted EBITDA of Equifax in the second quarter of 2022 was $461.3 million, up 7% from the year-ago quarter’s level.
Robert Half’s quarterly earnings of $1.6 per share beat the consensus mark by 0.6% and improved 20.3% year over year. RHI’s revenues of $1.86 billion missed the consensus mark by 1.8% but increased 17.9% year over year on a reported basis and 20% on an as-adjusted basis. Adjusted gross profit of Robert Half in the quarter was $804.1 million, up 20.2% year over year.
Fiserv reported adjusted earnings (excluding 64 cents from non-recurring items) per share of $1.56, which beat the consensus mark by 1.3% and increased 14% year over year. FISV’s adjusted revenues of $4.23 billion beat the consensus estimate by 4.1% and increased 4.5% year over year. Organic revenue growth of Fiserv was 12% in the quarter, driven by a 17% surge in the Acceptance segment, a 7% increase in the Fintech segment and an 8% improvement in the Payments segment.
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Visa's (V) Q3 Earnings Beat on Strong Cross-Border Volume
Visa Inc. (V - Free Report) reported fiscal third-quarter 2022 earnings of $1.98 per share, which outpaced the Zacks Consensus Estimate by 13.8%. The bottom line climbed 33% year over year.
Net revenues improved 19% year over year to $7.3 billion during the June quarter. The top line beat the consensus mark by 3.1%.
The quarterly results were aided by continued growth in payments volume, cross-border volume and processed transactions. With the global economy in its recovery phase and individuals gaining confidence in traveling, cross-border travel volume of Visa in the quarter under review has exceeded the 2019 levels for the first time ever since the onset of the pandemic in early 2020. However, elevated operating costs partly offset the upside.
Visa Inc. Price, Consensus and EPS Surprise
Visa Inc. price-consensus-eps-surprise-chart | Visa Inc. Quote
Operational Performance
On a constant-dollar basis, payments volume of Visa rose 12% year over year in the June quarter. Processed transactions (implying transactions processed by Visa) advanced 16% year over year to 49.3 billion.
Total cross-border volume of Visa, on a constant dollar basis, surged 40% year over year in the quarter under review. Excluding transactions within Europe, V’s cross-border volume (that usually boosts the company’s international transaction revenues) surged 48% year over year on a constant-dollar basis.
Service revenues of $3.2 billion improved 13% year over year during the June quarter, thanks to higher payments volume in the prior quarter. Data processing revenues grew 8% year over year to $3.6 billion, while other revenues of $517 million registered year-over-year growth of 26%. Meanwhile, international transaction revenues surged 51% year over year to $2.6 billion in the quarter under review.
Client incentives (a contra-revenue item) increased 23.8% year over year to $2.6 billion. The metric accounted for 26.1% of Visa’s gross revenues of $9.8 billion.
Operating expenses of $2.4 billion escalated 15% year over year, mainly due to higher personnel as well as general and administrative expenses.
Net interest expense declined 15.3% year over year to $111 million in the June quarter.
Balance Sheet (as of Jun 30, 2022)
Visa exited the June quarter with cash and cash equivalents of $14 billion, which plunged 14.8% from fiscal year-end Sep 30, 2021.
Total assets of $85.4 billion increased 3% from fiscal year-end Sep 30, 2021.
Long-term debt amounted to $20.5 billion, up 2.8% from fiscal year-end Sep 30, 2021. Current maturities of debt amounted to $3.2 billion.
Total equity of $35.5 billion dropped 5.6% from fiscal year-end Sep 30, 2021.
Cash Flow
In the June quarter, net cash provided by operating activities totaled $5.3 billion, which increased 19% year over year. Free cash flow of $5 billion climbed 18.5% over the year.
Capital Deployment Update
Visa rewarded $3.3 billion to shareholders to the tune of $2.5 billion in share buybacks and dividends of $798 million in the June quarter. As of Jun 30, 2022, V had leftover authorized funds of $7.2 billion under its share buyback program.
On Jul 22, 2022, the board of directors of Visa approved a quarterly cash dividend of 37.5 cents per share. The dividend will be paid on Sep 1, 2022, to shareholders of record as of Aug 12.
Zacks Rank
Visa currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Business Services Sector Releases
Of the Business Services sector players that have already released their respective quarterly results so far, the bottom lines of Equifax Inc. (EFX - Free Report) , Robert Half International Inc. (RHI - Free Report) and Fiserv, Inc. beat the Zacks Consensus Estimate.
Equifax reported adjusted earnings (excluding 46 cents from non-recurring items) of $2.09 per share, which beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. However, EFX’s revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year on a reported basis and 8% on a local-currency basis. Adjusted EBITDA of Equifax in the second quarter of 2022 was $461.3 million, up 7% from the year-ago quarter’s level.
Robert Half’s quarterly earnings of $1.6 per share beat the consensus mark by 0.6% and improved 20.3% year over year. RHI’s revenues of $1.86 billion missed the consensus mark by 1.8% but increased 17.9% year over year on a reported basis and 20% on an as-adjusted basis. Adjusted gross profit of Robert Half in the quarter was $804.1 million, up 20.2% year over year.
Fiserv reported adjusted earnings (excluding 64 cents from non-recurring items) per share of $1.56, which beat the consensus mark by 1.3% and increased 14% year over year. FISV’s adjusted revenues of $4.23 billion beat the consensus estimate by 4.1% and increased 4.5% year over year. Organic revenue growth of Fiserv was 12% in the quarter, driven by a 17% surge in the Acceptance segment, a 7% increase in the Fintech segment and an 8% improvement in the Payments segment.