Visa 10-Q 2024-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33977

VISA INC.

(Exact name of Registrant as specified in its charter)

Delaware															26-0267673
(State or other jurisdiction of incorporation or organization)															(IRS Employer Identification No.)
			P.O. Box 8999
San Francisco,						California									94128-8999
(Address of principal executive offices)															(Zip Code)

(650) 432-3200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading Symbol						Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share						V						New York Stock Exchange
1.500% Senior Notes due 2026						V26						New York Stock Exchange
2.000% Senior Notes due 2029						V29						New York Stock Exchange
2.375% Senior Notes due 2034						V34						New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☑						Accelerated filer			☐
Non-accelerated filer			☐						Smaller reporting company			☐
									Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 17, 2024, there were 1,670,444,965 shares outstanding of the registrant’s class A common stock, par value $0.0001 per share, 4,835,384 shares outstanding of the registrant’s class B-1 common stock, par value $0.0001 per share, 120,338,948 shares outstanding of the registrant’s class B-2 common stock, par value $0.0001 per share, and 26,686,926 shares outstanding of the registrant’s class C common stock, par value $0.0001 per share.

VISA

TABLE OF CONTENTS

						Page
PART I.			Financial Information			3
Item 1.			Financial Statements (Unaudited)			3
			Consolidated Balance Sheets—June 30, 2024 and September 30, 2023			3
			Consolidated Statements of Operations—Three and Nine Months Ended June 30, 2024 and 2023			4
			Consolidated Statements of Comprehensive Income—Three and Nine Months Ended June 30, 2024 and 2023			5
			Consolidated Statements of Changes in Equity—Three and Nine Months Ended June 30, 2024 and 2023			6
			Consolidated Statements of Cash Flows—Nine Months Ended June 30, 2024 and 2023			10
			Notes to Consolidated Financial Statements (Unaudited)			11
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			38
Item 4.			Controls and Procedures			38
PART II.			Other Information			39
Item 1.			Legal Proceedings			39
Item 1A.			Risk Factors			39
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			40
Item 3.			Defaults Upon Senior Securities			40
Item 4.			Mine Safety Disclosures			40
Item 5.			Other Information			40
Item 6.			Exhibits			41
			Signatures			42

PART I. FINANCIAL INFORMATION

VISA

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

			June 30, 2024						September 30, 2023
			(in millions, except per share data)
Assets
Cash and cash equivalents			$	12,947					$	16,286
Restricted cash equivalents—U.S. litigation escrow			1,596						1,764
Investment securities			3,697						3,842
Settlement receivable			2,128						2,183
Accounts receivable			2,521						2,291
Customer collateral			3,472						3,005
Current portion of client incentives			1,821						1,577
Prepaid expenses and other current assets			2,857						2,584
Total current assets			31,039						33,532
Investment securities			3,037						1,921
Client incentives			4,133						3,789
Property, equipment and technology, net			3,766						3,425
Goodwill			18,816						17,997
Intangible assets, net			26,243						26,104
Other assets			4,006						3,731
Total assets			$	91,040					$	90,499
Liabilities
Accounts payable			$	331					$	375
Settlement payable			2,576						3,269
Customer collateral			3,472						3,005
Accrued compensation and benefits			1,251						1,506
Client incentives			8,562						8,177
Accrued liabilities			4,732						5,015
Accrued litigation			1,688						1,751
Total current liabilities			22,612						23,098
Long-term debt			20,602						20,463
Deferred tax liabilities			5,119						5,114
Other liabilities			2,978						3,091
Total liabilities			51,311						51,766
Commitments and contingencies (Note 13)
Equity
Preferred stock, $0.0001 par value, 5 shares issued and outstanding as of June 30, 2024 and September 30, 2023			1,425						1,698
Common stock, $0.0001 par value:
Class A common stock, 1,678 and 1,594 shares issued and outstanding as of June 30, 2024 and September 30, 2023, respectively			—						—
Class B-1 and B-2 total common stock, 125 and 245 shares issued and outstanding as of June 30, 2024 and September 30, 2023, respectively			—						—
Class C common stock, 27 and 10 shares issued and outstanding as of June 30, 2024 and September 30, 2023, respectively			—						—
Right to recover for covered losses			(46)						(140)
Additional paid-in capital			20,832						20,452
Accumulated income			18,578						18,040
Accumulated other comprehensive income (loss):
Investment securities			(19)						(64)
Defined benefit pension and other postretirement plans			(145)						(155)
Derivative instruments			(120)						(177)
Foreign currency translation adjustments			(776)						(921)
Total accumulated other comprehensive income (loss)			(1,060)						(1,317)
Total equity			39,729						38,733
Total liabilities and equity			$	91,040					$	90,499

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

VISA

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED**)**

			Three Months Ended June 30,												Nine Months Ended June 30,
			2024						2023						2024						2023
			(in millions, except per share data)
Net revenue			$	8,900					$	8,123					$	26,309					$	24,044
Operating Expenses
Personnel			1,573						1,481						4,655						4,333
Marketing			378						297						1,009						938
Network and processing			200						182						570						539
Professional fees			152						133						443						372
Depreciation and amortization			264						235						760						696
General and administrative			382						314						1,174						918
Litigation provision			13						457						452						798
Total operating expenses			2,962						3,099						9,063						8,594
Operating income			5,938						5,024						17,246						15,450
Non-operating Income (Expense)
Interest expense			(196)						(182)						(465)						(461)
Investment income (expense) and other			247						304						763						412
Total non-operating income (expense)			51						122						298						(49)
Income before income taxes			5,989						5,146						17,544						15,401
Income tax provision			1,117						990						3,119						2,809
Net income			$	**4

Showing the first 8K of 114K characters. Open the full section

This management’s discussion and analysis provides a review of the results of operations, financial condition and liquidity and capital resources of Visa Inc. and its subsidiaries (Visa, we, us, our or the Company) on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1—Financial Statements of this report.

Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 future financial position, results of operations and cash flows; prospects, developments, strategies and growth of our business; anticipated expansion of our products in certain countries; industry developments; anticipated timing and benefits of our acquisitions; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our unaudited consolidated financial statements. Forward-looking statements generally are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “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. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2023, and any 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.

Overview

Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global set of consumers, merchants, financial institutions and government entities through innovative technologies. We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet, our proprietary advanced transaction processing network. We offer products, solutions and services that facilitate secure, reliable and efficient money movement for all participants in the ecosystem.

Financial overview. A summary of our as-reported U.S. GAAP and non-GAAP operating results is as follows:

			Three Months Ended June 30,																		Nine Months Ended June 30,
			2024						2023						% Change**(1)**						2024						2023						% Change**(1)**
			(in millions, except percentages and per share data)
Net revenue			$	8,900					$	8,123					10		%				$	26,309					$	24,044					9		%
Operating expenses			$	2,962					$	3,099					(4		%)				$	9,063					$	8,594					5		%
Net income			$	4,872					$	4,156					17		%				$	14,425					$	12,592					15		%
Diluted earnings per share			$	2.40					$	2.00					20		%				$	7.08					$	6.02					18		%
Non-GAAP operating expenses(2)			$	2,927					$	2,578					14		%				$	8,417					$	7,598					11		%
Non-GAAP net income(2)			$	4,909					$	4,499					9		%				$	14,964					$	13,464					11		%
Non-GAAP diluted earnings per share(2)			$	2.42					$	2.16					12		%				$	7.34					$	6.44					14		%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

(2)For a full reconciliation of our GAAP to non-GAAP financial results, see tables in Non-GAAP financial results below.

Highlights for the first nine months of fiscal 2024. For the three and nine months ended June 30, 2024, net revenue increased 10% and 9% over the prior-year comparable periods, respectively, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives. During the three months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth. See Results of Operations—Net Revenue below for further discussion.

For the three months ended June 30, 2024, GAAP operating expenses decreased 4% over the prior-year comparable period, primarily driven by lower litigation provision. For the nine months ended June 30, 2024, GAAP operating expenses increased 5% over the prior-year comparable period, primarily driven by higher personnel and general and administrative expenses, partially offset by lower litigation provision. See Results of Operations—Operating Expenses below for further discussion. During the three and nine months ended June 30, 2024, exchange rate movements did not have a material impact on our operating expenses growth.

For the three and nine months ended June 30, 2024, non-GAAP operating expenses increased 14% and 11% over the prior-year comparable periods, respectively, primarily driven by higher general and administrative, personnel and marketing expenses.

Class B-1 common stock exchange offer. In May 2024, we accepted 241 million shares of class B-1 common stock tendered in the exchange offer. In exchange, we issued approximately 120 million shares of class B-2 common stock and 48 million shares of class C common stock. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Acquisition. On January 16, 2024, we acquired Pismo Holdings (Pismo), a global cloud-native issuer processing and core banking platform, for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements.

Interchange multidistrict litigation. During the nine months ended June 30, 2024, we recorded additional accruals of $140 million to address claims associated with the interchange multidistrict litigation. See Note 13—Legal Matters to our unaudited consolidated financial statements.

Common stock repurchases. During the nine months ended June 30, 2024, we repurchased 42 million shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Non-GAAP financial results. We use non-GAAP financial measures of our performance which exclude certain items which we believe 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 consider non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance.

*•*Gains and losses on equity investments. Gains and losses on equity investments include periodic non-cash fair value adjustments and gains and losses upon sale of an investment. These long-term investments are strategic in nature and are primarily private company investments. Gains and losses associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business.

*•*Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of amortization of intangible assets such as technology, customer relationships and trade names acquired in connection with business combinations executed beginning in fiscal 2019. Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations. As such, we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

*•*Acquisition-related costs. Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations. These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities. These costs also include retention equity and deferred compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination. We have excluded these amounts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

• Litigation provision. Litigation provision includes significant accruals related to certain legal matters that are not covered by the U.S. retrospective responsibility plan or the Europe retrospective responsibility plan (uncovered legal matters) and additional accruals associated with the interchange multidistrict litigation which are covered by the U.S. retrospective responsibility plan (U.S. covered litigation). Litigation provision associated with these matters can vary significantly based on the facts and circumstances related to each matter and do not correlate to the underlying performance of our business. During the three and nine months ended June 30, 2024 and 2023, we have excluded these amounts to facilitate a comparison to our past operating performance.

Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a downward adjustment to the rate at which shares of our class B-1 and class B-2 common stock ultimately convert into shares of class A common stock. During the three and nine months ended June 30, 2024, there were no conversion rate adjustments. During the three months ended June 30, 2023, basic and diluted earnings per class A common stock was unchanged and during the nine months ended June 30, 2023, basic and diluted earnings per class A common stock increased $0.01 and was unchanged, respectively, as a result of the downward adjustments of the class B-1 common stock conversion rate during the period. See Note 5—U.S. and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements.

*•*Lease consolidation costs. During the nine months ended June 30, 2024, we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces. We have excluded these amounts as they do not reflect the underlying performance of our business.

• Indirect taxes. During the three and nine months ended June 30, 2024, as a result of the resolution of an audit, we recognized a benefit within general and administrative expense related to the release of the

reserve previously recognized in fiscal 2021. This one-time benefit is not representative of our ongoing operations.

• Charitable contribution. During the three and nine months ended June 30, 2024, we donated investment securities to the Visa Foundation and recognized a non-cash general and administrative expense. We have excluded this amount as it does not reflect the underlying performance of our business.

Non-GAAP operating expenses, non-operating income (expense), income tax provision, effective income tax rate, net income and diluted earnings per share should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S. GAAP. The following tables reconcile our as-reported financial measures, calculated in accordance with U.S. GAAP, to our respective non-GAAP financial measures:

			Three Months Ended June 30, 2024
			Operating Expenses						Non-operating Income (Expense)						Income Tax Provision**(1)**						Effective Income Tax Rate**(2)**						Net Income						Diluted Earnings Per Share**(2)**
			(in millions, except percentages and per share data)
As reported			$	2,962					$	51					$	1,117					18.6		%				$	4,872					$	2.40
(Gains) losses on equity investments, net			—						22						5												17						0.01
Amortization of acquired intangible assets			(48)						—						13												35						0.02
Acquisition-related costs			(28)						—						3												25						0.01
Litigation provision			(10)						—						2												8						—
Indirect taxes			118						—						(29)												(89)						(0.04)
Charitable contribution			(67)						—						26												41						0.02
Non-GAAP			$	2,927					$	73					$	1,137					18.8		%				$	4,909					$	2.42

			Nine Months Ended June 30, 2024
			Operating Expenses						Non-operating Income (Expense)						Income Tax Provision**(1)**						Effective Income Tax Rate**(2)**						Net Income						Diluted Earnings Per Share**(2)**
			(in millions, except percentages and per share data)
As reported			$	9,063					$	298					$	3,119					17.8		%				$	14,425					$	7.08
(Gains) losses on equity investments, net			—						48						11												37						0.02
Amortization of acquired intangible assets			(131)						—						32												99						0.05
Acquisition-related costs			(75)						—						5												70						0.03
Litigation provision			(434)						—						97												337						0.17
Lease consolidation costs			(57)						—						13												44						0.02
Indirect taxes			118						—						(29)												(89)						(0.04)
Charitable contribution			(67)						—						26												41						0.02
Non-GAAP			$	8,417					$	346					$	3,274					17.9		%				$	14,964					$	7.34

			Three Months Ended June 30, 2023
			Operating Expenses						Non-operating Income (Expense)						Income Tax Provision**(1)**						Effective Income Tax Rate**(2)**						Net Income						Diluted Earnings Per Share**(2)**
			(in millions, except percentages and per share data)
As reported			$	3,099					$	122					$	990					19.2		%				$	4,156					$	2.00
(Gains) losses on equity investments, net			—						(85)						(18)												(67)						(0.03)
Amortization of acquired intangible assets			(41)						—						9												32						0.02
Acquisition-related costs			(24)						—						1												23						0.01
Litigation provision			(456)						—						101												355						0.17
Non-GAAP			$	2,578					$	37					$	1,083					19.4		%				$	4,499					$	2.16

			Nine Months Ended June 30, 2023
			Operating Expenses						Non-operating Income (Expense)						Income Tax Provision**(1)**						Effective Income Tax Rate**(2)**						Net Income						Diluted Earnings Per Share**(2)**
			(in millions, except percentages and per share data)
As reported			$	8,594					$	(49)					$	2,809					18.2		%				$	12,592					$	6.02
(Gains) losses on equity investments, net			—						111						25												86						0.04
Amortization of acquired intangible assets			(130)						—						28												102						0.05
Acquisition-related costs			(69)						—						5												64						0.03
Litigation provision			(797)						—						177												620						0.30
Non-GAAP			$	7,598					$	62					$	3,044					18.4		%				$	13,464					$	6.44

(1)Determined by applying applicable tax rates.

(2)Figures in the table may not recalculate exactly due to rounding. Effective income tax rate, diluted earnings per share and their respective totals are calculated based on unrounded numbers.

Payments volume and processed transactions. Payments volume is the primary driver for our service revenue, and the number of processed transactions is the primary driver for our data processing revenue.

Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-badged volume. Nominal payments volume is denominated in U.S. dollars and is calculated each quarter by applying an established U.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions include payments and cash transactions, and represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks.

The following table presents nominal payments and cash volume:

			U.S.																		International																		Visa
			Three Months Ended March 31,****(1)																		Three Months Ended March 31,****(1)																		Three Months Ended March 31,****(1)
			2024						2023						% Change**(2)**						2024						2023						% Change**(2)**						2024						2023						% Change**(2)**
			(in billions, except percentages)
Nominal payments volume
Consumer credit			$	564					$	531					6		%				$	725					$	697					4		%				$	1,289					$	1,227					5		%
Consumer debit(3)			744						701						6		%				738						659						12		%				1,482						1,360						9		%
Commercial(4)			253						239						6		%				149						137						9		%				402						376						7		%
Total nominal payments volume**(2)**			$	1,561					$	1,471					6		%				$	1,611					$	1,493					8		%				$	3,172					$	2,963					7		%
Cash volume(5)			148						148						—		%				460						448						3		%				608						597						2		%
Total nominal volume**(2),(6)**			$	1,709					$	1,619					6		%				$	2,071					$	1,941					7		%				$	3,780					$	3,560					6		%
			U.S.																		International																		Visa
			Nine Months Ended March 31,****(1),(2)																		Nine Months Ended March 31,****(1),(2)																		Nine Months Ended March 31,****(1),(2)
			2024						2023						% Change						2024						2023						% Change						2024						2023						% Change
			(in billions, except percentages)
Nominal payments volume
Consumer credit			$	1,745					$	1,650					6		%				$	2,217					$	2,078					7		%				$	3,962					$	3,728					6		%
Consumer debit(3)			2,218						2,091						6		%				2,249						1,961						15		%				4,467						4,052						10		%
Commercial(4)			771						731						6		%				457						405						13		%				1,228						1,136						8		%
Total nominal payments volume			$	4,734					$	4,472					6		%				$	4,923					$	4,443					11		%				$	9,656					$	8,915					8		%
Cash volume(5)			453						455						(1		%)				1,419						1,365						4		%				1,871						1,820						3		%
Total nominal volume**(6)**			$	5,187					$	4,927					5		%				$	6,341					$	5,809					9		%				$	11,528					$	10,736					7		%

The following table presents the change in nominal and constant payments and cash volume:

			International												Visa												International												Visa
			Three Months Ended March 31, 2024 vs. 2023**(1),(2)**												Three Months Ended March 31, 2024 vs. 2023**(1),(2)**												Nine Months Ended March 31, 2024 vs. 2023**(1),(2)**												Nine Months Ended March 31, 2024 vs. 2023**(1),(2)**
			Nominal						Constant**(7)**						Nominal						Constant**(7)**						Nominal						Constant**(7)**						Nominal						Constant**(7)**
Payments volume growth
Consumer credit growth			4		%				9		%				5		%				8		%				7		%				10		%				6		%				8		%
Consumer debit growth(3)			12		%				13		%				9		%				9		%				15		%				13		%				10		%				9		%
Commercial growth(4)			9		%				12		%				7		%				8		%				13		%				14		%				8		%				9		%
Total payments volume growth			8		%				11		%				7		%				8		%				11		%				11		%				8		%				9		%
Cash volume growth(5)			3		%				4		%				2		%				3		%				4		%				4		%				3		%				3		%
Total volume growth			7		%				9		%				6		%				8		%				9		%				10		%				7		%				8		%

(1)Service revenue in a given quarter is primarily assessed based on nominal payments volume in the prior quarter. Therefore, service revenue reported for the three and nine months ended June 30, 2024 and 2023, respectively, was based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2024 and 2023, respectively. On occasion, previously presented volume information may be updated. Prior period updates are not material.

(2)Figures in the table may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers.

(3)Includes consumer prepaid volume and Interlink volume.

(4)Includes large, medium and small business credit and debit, as well as commercial prepaid volume.

(5)Cash volume generally consists of cash access transactions, balance access transactions, balance transfers and convenience checks.

(6)Total nominal volume is the sum of total nominal payments volume and cash volume. Total nominal volume is provided by our financial institution clients, subject to review by Visa.

(7)Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S. dollar.

The following table presents the number of processed transactions:

			Three Months Ended June 30,																		Nine Months Ended June 30,
2024						2023						% Change**(1)**						2024**(1)**						2023**(1)**						% Change**(1)**
(in millions, except percentages)
Visa processed transactions			59,318						54,034						10		%				172,247						156,615						10		%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage change is calculated based on unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material.

Results of Operations

Net Revenue

The following table presents our net revenue earned in the U.S. and internationally:

			Three Months Ended June 30,																		Nine Months Ended June 30,
			2024						2023						% Change**(1)**						2024						2023						% Change**(1)**
			(in millions, except percentages)
U.S.			$	3,621					$	3,443					5		%				$	10,909					$	10,550					3		%
International			5,279						4,680						13		%				15,400						13,494						14		%
Net revenue			$	8,900					$	8,123					10		%				$	26,309					$	24,044					9		%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

Net revenue increased over the three and nine-month prior-year comparable periods primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

Our net revenue is impacted by the overall strengthening or weakening of the U.S. dollar as payments volume and related revenue denominated in local currencies are converted to U.S. dollars. During the three months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth.

The following table presents the components of our net revenue:

			Three Months Ended June 30,																		Nine Months Ended June 30,
			2024						2023						% Change**(1)**						2024						2023						% Change**(1)**
			(in millions, except percentages)
Service revenue			$	3,967					$	3,668					8		%				$	11,915					$	10,950					9		%
Data processing revenue			4,489						4,105						9		%				13,104						11,751						12		%
International transaction revenue			3,194						2,920						9		%				9,197						8,466						9		%
Other revenue			780						597						31		%				2,228						1,735						28		%
Client incentives			(3,530)						(3,167)						11		%				(10,135)						(8,858)						14		%
Net revenue			$	8,900					$	8,123					10		%				$	26,309					$	24,044					9		%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

*•*Service revenue increased primarily due to 7% and 8% growth in nominal payments volume over the three and nine-month prior-year comparable periods, respectively.

*•*Data processing revenue increased primarily due to 10% growth in processed transactions over the three and nine-month prior-year comparable periods.

*•*International transaction revenue increased primarily due to growth in nominal cross-border volumes of 12% and 15% over the three and nine-month prior-year comparable periods, respectively, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.

• Other revenue increased primarily due to growth in consulting and marketing services and select pricing modifications over the three and nine-month prior-year comparable periods.

• Client incentives increased primarily due to growth in payments volume over the three and nine-month prior-year comparable periods. The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.

Operating Expenses

The following table presents the components of our total operating expenses:

			Three Months Ended June 30,																		Nine Months Ended June 30,
			2024						2023						% Change**(1)**						2024						2023						% Change**(1)**
			(in millions, except percentages)
Personnel			$	1,573					$	1,481					6		%				$	4,655					$	4,333					7		%
Marketing			378						297						27		%				1,009						938						8		%
Network and processing			200						182						10		%				570						539						6		%
Professional fees			152						133						15		%				443						372						19		%
Depreciation and amortization			264						235						12		%				760						696						9		%
General and administrative			382						314						22		%				1,174						918						28		%
Litigation provision			13						457						(97		%)				452						798						(43		%)
Total operating expenses			$	2,962					$	3,099					(4		%)				$	9,063					$	8,594					5		%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

*•*Personnel expenses increased over the three and nine-month prior-year comparable periods primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.

*•*Marketing expenses increased over the three and nine-month prior-year comparable periods primarily due to higher spend including for client marketing and the Olympic and Paralympic Games Paris 2024. The increase during the nine months ended June 30, 2024 was partially offset by spend related to the FIFA World CupTM in the prior year and absent in the current year.

*•*Professional fees increased over the three and nine-month prior-year comparable periods primarily due to higher consulting fees. The increase during the nine months ended June 30, 2024 also included higher advisory fees.

• Depreciation and amortization increased over the three and nine-month prior-year comparable periods primarily due to additional depreciation and amortization from our on-going investments and acquisitions.

*•*General and administrative expenses increased over the three and nine-month prior-year comparable periods primarily due to a charitable contribution to the Visa Foundation in the current year, higher usage of travel related card benefits, higher indirect taxes and higher unfavorable foreign currency fluctuations, partially offset by the release of the reserve on indirect taxes previously recognized in fiscal 2021. The increase during the nine months ended June 30, 2024 also included lease consolidation costs in the current year.

*•*Litigation provision decreased over the three and nine-month prior-year comparable periods primarily due to lower accruals related to the U.S. covered litigation. The decrease during the nine months ended June 30, 2024 was partially offset by accruals related to uncovered litigation in the current year. See Note 13—Legal Matters to our unaudited consolidated financial statements.

Non-operating Income (Expense)

The following table presents the components of our non-operating income (expense):

			Three Months Ended June 30,																		Nine Months Ended June 30,
			2024						2023						% Change**(1)**						2024						2023						% Change**(1)**
			(in millions, except percentages)
Interest expense			$	(196)					$	(182)					9		%				$	(465)					$	(461)					1		%
Investment income (expense) and other			247						304						(18		%)				763						412						86		%
Total non-operating income (expense)			$	51					$	122					(58		%)				$	298					$	(49)					702		%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

*•*Interest expense increased during the three months ended June 30, 2024 primarily due to higher losses from derivative instruments and higher interest expense related to taxes. Interest expense increased during the nine months ended June 30, 2024 primarily due to higher losses from derivative instruments, partially offset by higher interest benefit related to taxes and lower interest expense related to lower outstanding debt.

*•*Investment income (expense) and other decreased during the three months ended June 30, 2024, primarily due to losses on our investments, partially offset by higher interest income on our cash and investments. Investment income (expense) and other increased during the nine months ended June 30, 2024, primarily due to higher interest income on our cash and investments and lower losses on our investments.

Effective Income Tax Rate

The following table presents our effective income tax rates:

						Three Months Ended June 30,												Nine Months Ended June 30,
						2024						2023						2024						2023
Effective income tax rate						19		%				19		%				18		%				18		%

The effective income tax rates differ primarily due to the following:

• During the nine months ended June 30, 2024, a $184 million tax benefit as a result of the conclusion of an audit; and

• During the nine months ended June 30, 2023, a $142 million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

Liquidity and Capital Resources

Cash Flow Data

The following table summarizes our cash flow activity for the periods presented:

			Nine Months Ended June 30,
			2024						2023
			(in millions)
Total cash provided by (used in):
Operating activities			$	13,286					$	13,828
Investing activities			$	(2,510)					$	(818)
Financing activities			$	(13,564)					$	(13,192)

Operating activities. Cash provided by operating activities for the nine months ended June 30, 2024 was lower than the prior-year comparable period primarily due to higher incentive payments and higher cash paid for taxes due to the timing of payments, partially offset by continued growth in our underlying business.

Investing activities. Cash used in investing activities for the nine months ended June 30, 2024 was higher than the prior-year comparable period primarily due to cash paid for acquisitions, net of cash acquired, the absence of cash received from the settlement of net investment hedge derivative instruments and higher purchases, net of maturities and sales, of investment securities. See Note 2—Acquisitions to our unaudited consolidated financial statements*.*

Financing activities. Cash used in financing activities for the nine months ended June 30, 2024 was higher than the prior-year comparable period primarily due to higher share repurchases and higher dividends paid, partially offset by the absence of the principal debt payment upon maturity of our December 2022 senior notes. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements*.*

Sources of Liquidity

Our primary sources of liquidity are cash on hand, cash flow from our operations, our investment portfolio and access to various equity and borrowing arrangements. Funds from operations are maintained in cash and cash equivalents and short-term or long-term investment securities based upon our funding requirements, access to liquidity from these holdings and the returns that these holdings provide. Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months. We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our operating performance, current economic and capital market conditions and other relevant circumstances.

Uses of Liquidity

There has been no significant change to our primary uses of liquidity since September 30, 2023, except as discussed below.

Common stock repurchases. During the nine months ended June 30, 2024, we repurchased shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Dividends. During the nine months ended June 30, 2024, we declared and paid $3.2 billion in dividends to holders of our common and preferred stock. On July 23, 2024, our board declared a quarterly cash dividend of $0.52 per share of class A common stock (determined in the case of all other outstanding common and preferred stock on an as-converted basis). See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. We expect to continue paying quarterly dividends in cash, subject to approval by the board.

Acquisition. On January 16, 2024, we acquired Pismo for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This standard also enhances interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment. This ASU is effective for our annual periods beginning October 1, 2024, and interim periods beginning October 1, 2025, and requires retrospective application to all prior periods presented. We are currently evaluating the impact of the ASU on our disclosures.

In December 2023, the FASB issued ASU 2023-09, which provides improvements to income tax disclosures. This standard requires disaggregated information related to the effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for our annual periods beginning October 1, 2025, and requires prospective application with the option to apply the standard retrospectively. We are currently evaluating the impact of the ASU on our disclosures.