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V Visa

Participants
Mike Milotich Visa, Inc.
Alfred F. Kelly, Jr Visa, Inc.
Vasant M. Prabhu Visa, Inc.
Craig Jared Maurer Autonomous Research US LP
Tien-Tsin Huang JPMorgan Securities LLC
Donald Fandetti Wells Fargo Securities LLC
Harshita Rawat AllianceBernstein L.P.
Darrin Peller Wolfe Research LLC
Lisa Ellis MoffettNathanson LLC
James E. Faucette Morgan Stanley & Co. LLC
Sanjay Sakhrani Keefe, Bruyette & Woods, Inc.
Moshe Ari Orenbuch Credit Suisse Securities (NYSE:USA) LLC
Call transcript
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Operator

Welcome to the Visa fiscal fourth quarter and full-year 2018 earnings conference call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Mr. President Relations. Vice Senior Milotich, of Investor Mike Mr. Milotich, now begin. you may

Mike Milotich

Good Thank XXXX welcome afternoon, to Katie. earnings Visa's full-year and and everyone, you, quarter fiscal call. fourth

statistical Vasant Visa's us on is call our has be on days. at on highlights section XX Executive Joining www.investor.visa.com. Al Relations webcast Chief A Kelly, site our Investor containing our are Officer, Officer. for today being financial and posted slide archived of website. Prabhu, the This A Visa's Financial will and Chief been deck IR website replay

remind forward-looking result results a also of could are me future you These guarantees as materially of Let that many this includes not actual differ statements. factors. presentation performance, our and statements

release. recent and find me Forms you GAAP section Additional website. available XX-Q, in Historical which to the to and over on call non-GAAP of reports earnings related on with the this Al. financial information disclosed are reconciliation the factors our our in concerning those call Investor can XX-K website And that, is measures SEC's information and available Relations today's turn most let in

Alfred F. Kelly, Jr

Mike, joining us and thanks and for thank good you today. afternoon, everyone,

our a quarter. U.S. robust volume Our line the in China. last fiscal remained dual-branded in XX% right as drivers of a in was constant growth on in quarter, strength offsetting despite in growth with business fourth card strong XX%, was all the performance stronger Payments with key remained Revenue slowdown dollar. volume dollar basis

was donation was growth growth, at with growth as prior investment driven Expense would XX%, Visa adjusted quarter accelerated dollar Cross-border investments. Foundation, to have the a versus available-for-sale same modestly was the XX%. primarily for China, the basis quarter. Excluding on transaction last payment a securities was volume personnel-related by EPS last constant of Adjusted quarter. Processed XX%. consistent growth our XX%,

repurchases consisting also of of capital returned through dividends. quarter, the shareholders to share $X.X and of We $XXX billion billion in approximately million $X.X

driven back merchants global by of fiscal this of Total of XXXX, issuers connecting to about and of year stronger Visa on million transactions, volume billion transactions increased over got a virtual number million volume entire XX trillion, every $XX XXX a number an during fiscal our Payments average XXX single billion. or Looking year. by almost X.X totaled cards, including by trillion, $X.X record The year billion $XXX day surpassed on XXXX. cards, leading increasing network dimensions. over

at or over global processed global regions globe, XX%, lifting as increased this strong X A X.X totaled merchant very the important relative X is by the results million part increased XXXX, our In locations measuring to in PCE, point our growth Europe, which volume found activity and of the penetration by issuers. health grew with merchants XX%, Transactions network payments fast our of particularly in contracts. globally. payments reaching Visa's commercial And point by locations $XXX growing in to completed billion, XX% PCE volume where except penetration up deal to was double-digit of QX, X.X%. up Our Europe, in purchased processing issuers, picked globally. growth dollars a to with as total client activity And all million across in we of constant shift the twice relative XX and year.

volume XX% XXXX, activity deal volume. years. driving of of for global our clients length in volume, we is The not XX% who that fiscal roughly given payments five typical Europe. drive fact roughly we're Beyond clients, more expecting with By contract Europe, XX% surprising renewal that is our up our including new is for agreements new with way, year our during the the full agreements payments of completed total

share segments. solutions, a key well our growth how adoption Now reach we breadth in digital and set up I from which driving the into and XXXX, highlights us for and our expanded into into few has will we've are accelerating across insights talk new let our me then of the about globe how expanding technology, provide future. acceptance

start The regional platform settlement Europe. technical authorizations highlights, me our the in late clearing global finished with VisaNet quarter. some to with let first migration in September, in completed components following starting was So which migration, the and completed the

our Our access have clients now European all to global capabilities.

a risk more already required vigilance effort that than are of our having clients. advanced migration. part XX one This disruption clients was our completed ensure to services, In our sustained utilizing to on was least at very the just there no fact, large

execution, about couldn't with we forward one So the happier global really platform. and moving now we're be

highest clients of European from systems and processes. protection global level Our also and now security the our cybersecurity enjoy

to Cyber inaugurated our our conversion the terms as In to making the after we we The center fusion European today fact, quarter agreeing client is second the year. center it in deals during contracts incentives of Fusion in the remaining London, earlier signed earlier now complete, commercial officially last globally.

short with was of the effort, pleased a as very contracts a XXX are lot well there time. of in outcome opening in period risk such of We client this over

retained have expected the we we of the at better previously, amount As time said the acquisition. was of business we than

As support. one moving priorities is to more fund and investment being we financial establishing get provide gaining Europe the by momentum integration, faster, of with an our in past flexible, FinTechs

FinTechs Central agreements both we also success in the but with YAYA have be of to in signed and quarter, in still signings UK, Europe. terms Solaris Germany, are quarter This this agreements more in Revolut, GXA Eastern with contracted. beginning to We

a Let which relationships where now the Visa Construction Singapore's as Visa with co-brand, partner in Malaysia. all Group issuers is four brings few card dual-brand the move as five Kiwi Asia-Pacific, which NTUC Bank chain, the we credit and the Bank include different for in our now new strengthening co-brand to many products, In Zealand, AirAsia market top was And with and selected Kotak New Bank, as co-brand, long-term us deals FairPrice its new India, supermarket largest wins Bank retailers, of have in market. with these The Axis debit we the leadership deal across India, renewed Building issuers. Mahindra. Thailand's for Japan are Bank, be and We exclusive ICICI, of position across we the market, to A banks Mall largest confident across million China, renewed in continues an In QX and deals one to active Ctrip. the and China last prepaid well for since the In examples of of to of quarter that me deal its top exclusive we XX State over payments the over partners business size long-term X CITIC region. priorities renewals the of HDFC, further of won in leading that opportunity. cards the contribute will given Japanese products. year, including debit the now our XX% region one up debit market,

mandate, localization the requirements. data months Visa India to has implementing the with towards Regarding the over six RBI's been working solution last comply a

XX, data As to RBI's Indian locally, we facilitate are of where transaction the also can requirement cardholder data. storing October we payment of access

data have re-architect how systems the and fully plan with processing only-in-India to the existing requirement. a will our action We detailed to update global we RBI, comply including submitted status

also our with agency impact complete brand the Brazil, customer our Decolar Latin technology had in will of travel our local one affluent base. to cardholders. the In co-brand which to online convert Our an solution and of is capabilities, America, all clients one increase in quick we signed of we our agreements processor are in point travel services, but to transactions including in are airline in to XX contactless. our penetration most Adding And and XX-year portfolios to XXXX. working processing teams clock Argentina, that CEMEA, Also largest several platform. will transactions a to largest in This affluent minimal important to of than points. America all on Bradesco, virtually Latin the label America, consumers. private of we America, an the us market, of Brazil, finally, largest January XXX% East addition CREDZ, VisaNet X with our Middle issuers future with cards the Argentina about markets our In the million and Latin our of around domestic our will wins, and percentage capture in one by provide we network will Visa in add more reliability important that Latin in co-brands value-added of begin enables to to global processing domestic innovations clients cyber the

Saudi including in Pakistan. Emirates quarter a and HBL UAE the as the portfolio number in Qatar This well Arabia, Airways as of had wins, we

solutions. how turn insights Now we're from let some regional digital give me network driving updates using and the into growth in our away our

by incremental continued new of reach is me with of scale. XXX% which Direct, increased Let end over growth ways quarter, as capturing this expansion flows. users be continues our activities one key as and well start the fueled by we're Global Visa our to payment

Our note Funds. their to issuers very total debit to automatically Fast our than Visa that speed globally X reach in important, fiscal execute important countries payment with to billion-plus more the enabled when funds Direct also XXX Visa transactions But of us credentials year. within leveraged move it's credentials originators this is

access to credentials. Visa is To Funds, UK, Plus adding to Plus ATM network, countries our Visa accounts by In deposits first We a is many access programs bank Direct Direct are are Barclays time. total on moving expansion quickly a to to most interbank Canada allowing quarter, enable our the real where which we was of Bank to look with the cardholders Spain great Funds end, first for expand number Ireland Fast step. TD and not issued the credential. continue bank reach, to Visa goal real-time, non-Visa XX its In in opportunities credentials leveraged of our receive will increasing issuers debit is cards. non-Visa directly participating to moved over recent for this This to to linked a that money Fast enabled. our Barclays ATM

most population Canadian of reach, small As we other enable bank this businesses. Canadian consumers and issuers of the can serve expanded

rapidly We through unique platform use are then large enablement. expansion reach case building Direct's upon by solutions Visa and scaling

of in disbursements deepen of by quarter where insurance today experiences. our more to are casualty the in including which with economy. clients enhance are couple XX% companies their $XXX enable a partnerships real-time signed our existing approximately gig paid billion to cases and penetration continue This to We customers' customers. that payments, States. use also claims insurance, of verticals, category check This past many represents the property There support United new we their

gig example, incorporate partnered Visa we earned access Direct economy the largest a option. wage real-time as with one For payroll of providers, PayActiv, to

they as workers many a Direct's big economy in number the providers their is this we of are partnership access world. scales the model in Visa to since in Given earned. gig growth also with the opportunity, quickly gig in believe wages participating economy, the the employees want platform around distribution

As launch sending know, PXP in example as receiving another new you And seamless well Samsung's Russia, for the PXP payments VTB Visa as solutions Direct experience in payments of many probably partnership Bank customer a powering is with providing is globally. making recent money. of and

Braintree, Stripe, we PayPal, name platform for further Square, gateway customer payments payment the over Visa Direct payments channel. believe India, few. and they have XX in credential-on-file both acquirer of and is These mobile Visa in and clients. Adyen, commercial Paytm leading a the token app announced digital recently who example behalf with mobile just of tokenize bill of which the activated securing requesters, Token in credit platform, apps, to expansion enabling a merchant And Service digital will Worldpay, partners PhonePe, technology on million CyberSource, and partners on Another Elavon, significant payment include XXX card customers. is their credential-on-file We the step leading payments

and be by a In frankly, enable sensitive Visa around we're expired improving on not that, tokens reducing low. card-not-present on world addition credentials the cardholders' account also dynamic to authorization experience. fraud to customer push too merchant lost, to risk focused to exposing frictionless rates allow updates information, issuers more or continue stolen,

XXXX. commerce again the milestone final to to about platform. Last So specifications draft feedback XX building has Visa This token the for EMVco are a two requesters significant time. on also global closely for expected now late XXXX. to before the was enables commerce with technical published specifications and Adyen, XX specifications. standard remote branding week, CyberSource, are begin We Worldpay ecosystem in and after as the such period experience be over remote reached still a user mid Braintree, markets issuers months' The activate to launch in the for secure secure allowing the across published token while in the now of working initial published Stripe, merchants early ecosystem of are and our partners a to

on of and scan-to-pay. our Now quick the contactless including few updates acceptance a adoption technologies,

adoption, rapidly, dip, our Let paying or four experience to domestic face-to-face which with a me transactions contactless. merchant are in start and is grow over or continues consumer tap-and-pay swipe, contactless as with better scan. than it now a that globally network run One

over If over penetration almost Russia, which is points States, led by XX%, XX you to last their is over XX%. since increased contactless and X countries exclude points last than United points the percentage penetration than XX points quarter. More last more XX contactless domestic up by the in which the versus up is domestic year up have year, XX

the of contactless more an across increase have past is the to year. over of for and in accept World the XXX XX the Over in coming of largest XX on one, accounted Number Cup, three in note. There side, XX the their than contactless, Russia. growth are contactless XX% months cities a market U.S. including top few CVS year. acceptance host in merchants purchases Visa by the Pharmacy FIFA significant contactless facts past the the Costco. payments now stores, transactions poised X-Eleven, several of During merchants The for enabled all stores,

transactions one-third over at a of bit merchant, ago. Additionally, of up year merchants around face-to-face a over from occur now a all all half contactless-enabled little

the contactless our the next will On of cards clients side, several begin issuing quarters. few largest over issuing

Citi-Costco good contactless will XXX be XXXX. end cards when million impact a of States acceptance just in-store contactless-enabled. on of co-brand year. with that of usage both at their and payments in since Over issued United payments this of a very Establishing come acceptance the Visa over the is in enabled the is there card Costco contactless the by Costco issuing paid example expect cardholder the mid-August potential Costco card well. We and after scan-to-pay is tap are co-brand progressing half now together,

over a in As points. leading we wallets. discussed the market, seeing deal XXX,XXX credentials in network scan-to-pay we into where prior In a quarter India largest their mobile markets of signed have CEMEA this now put a number with Tanzania, mobile our Visa in is region. quarters, acceptance we're also operator, we to momentum But phone Halotel,

introduce largest acquirer, almost with days. consumers X,XXX the X months. issuer thousands scan-to-pay across and in the million with in cities. make with mobile customers HBL, of in to the Pakistan buses plans coming operator public enabled launched leading the We a merchants In also country's solution ticketing have in available Kazakhstan, to to partnered few they transport XX,XXX network cashless four we and And being first

expand we to our Lastly, continue BXB is segments, into and top priority. new

card payment we offerings to and Specifically, our innovate continue BXB core expanding to both payment across solutions new flows. grow and

still is solutions, card core but of for there growth. leader, terms the In tremendous we remain global opportunity

this the growth has fiscal quarters. accelerating total mid-teens the BXB volume in payments into Our past XX% volume and $XXX two year, been or over was our billion, of payments the

to with in This growth example leadership and agreement to partners segments consumer rather card an just in the payment value virtual share new Sberbank a also virtual on business continue small who in pay enable more businesses and by them space. estate differentiating position in safely, Russia. small Visa enterprise partnership examples managers, capitalizing with me cards. three business, Russia, and are partnership to property real suppliers including than of option. opportunities seeing we to in flow conveniently their Let card BXB signed their using is In typically a new to support a expand Nexus we're the BXB we One, offering their the quickly, maintain clients, our of

BXB We and continue Connect our solution. to enhance scale

sensitive transactions. tokenizes being to quarter. that with the unique In to offered business that events giving cross-border a partnership for Connect for clients, Bottom solution Visa addition account Line's notable BXB we've option other virtual identifier payment two enable to such as Connect identity There utilized also launching card bank were Line organization's We're payment their could be a that in large-ticket a as them our are digital a an option payables. Bottom numbers, information, BXB extended

class a to expect the out settlement to or MDL reached reasonable, for to it U.S. which to we and a relief to the object. we least assuming settlement a a few be months. the take settlement approval, formal to and fair class damages network does lawsuit at not first, the But we resolve the on claims take rules. have in court will merchants be The in assesses submitted be court with place. injunctive seeking preliminary This for to September modifications the expect opt There year period approval

We making but conclude. litigation say be to MDL it's are certainly hard progress, actually the pleased will when to

XX this a Games business proud our business than more Beijing, upcoming includes at unparalleled which partnership promote the IP. and also of usage launching provides XXXX product sponsor partnerships provides venues Olympic while world's Los an quarter the initiatives been unique Visa clients and For with Paris, Angeles. renewed and cobranding years, of a Tokyo, of Visa largest to and regional and also showcasing innovation to facilitating opportunity initiatives. has Olympic The Games, through The for games, joint new sporting global platform we the client a that event life Olympic brand through and/or come level the

and Direct, So future that a while initiatives solutions. as digital delivered and year advancing drive XXXX will Visa BXB, performance contactless, great key was we financial where business driver fiscal strong also such growth

shift to of migration successfully with integration commercial also the Visa concluded client platform major the the completion the the contracts. Europe We and aspects of

focused behind However, we and us are fiscal on is totally now, XXXX. XXXX

growth nominal a digits X negative our growth accounting to basis, fiscal non-GAAP share for also foreign minimis point XXXX foreign basis, with net dollar more annual of standard. now a percentage approximately new per more revenue and it including currency earnings we share point revenue our our Vasant. mid-teens outlook, of look impact, percentage includes on on de details on Our results of from turn of low currency over XXXX on and impact. a financial approximately X To negative I'll nominal impact the outlook double for And

Vasant M. Prabhu

up EPS quarter everyone. fiscal the EPS Thank XX%. a rate XX%, an growth a X to adjusted GAAP Net includes point had basis, $XX.X and $XX.X which was finish special grew on $X.XX. was and XXXX. net point. Good up of for exclude reform. were a up EPS year income revenues the morning, XX%, net percentage U.S. $X.XX, full was good were up to income revenues XX%. for full-year quarter strong afternoon, you, percentage on fourth Exchange of XX%. of EPS a to EPS $XX.X our XX a prior item, net income and billion, and earnings billion everyone. versus On fiscal a were almost and basis, are year was drag basis reform benefit from billion, up XX Al, net year Full-year points On Adjusted On We basis, approximately points basis a tax U.S. release. growth. impact GAAP growth described percentage the XX of revenue contributed each was net shifts in and tax adjustments EPS The XX%,

points shifts percentage revenue the in available-for-sale to X.X exchange growth to quarter, the to few A X Foundation. net donated percentage to year, securities rate growth. and point Visa points investment note, other fourth full we the For added EPS

expense with non-operating associated as gain with which this is charitable the non-cash of drivers, XX%. XX% remained in constant XX%. third adjusted On benefit G&A and well the Growth contribution. grew exclude quarter. the million a special results dollar realized volume income/expense Our the as $XXX item, grew transactions relative to business little and Cross-border volume basis, change processed payments steady grew tax across

settlement due growth a in reduced lapping by Europe year. cross-border of X last percentage As volume was delay a reminder, QX XX% to point

particularly growth some strengthened, dollar corridors, to cross-border quarter inbound commerce fourth the U.S. through As decelerated the the in

third XXX basis the As quarter growth reported enjoyed translation growth basis trend. dollar currency point point the swung an headwind a in from contributing net the XXX fourth XX in on tailwind net revenue basis almost revenue rose, we the point to quarter, in impact slowdown the

emerging dollar, the Argentinian peso, In strong addition in to driven real. weakening Brazilian market currencies, sharp a by the shift in many the this and a particular Turkish significant was lira,

net basis approximately full XXX growth the For increased revenue points. exchange rates year, by

point two the are and is However, our At results the over tracking year be EPS based curve, impact of Visa headwind well fiscal expected years acquisition ownership XX% on basis current the rates of the translation is forward exchange of ahead second of to ahead expectations. of currency a our Europe, year full accretion end Cumulative in XXX model. XXXX.

technology major have We platform significant integration, to of for aspects commercial the also an of migration competitive most two completed repurchased at $X.X of the client stock QX, average In complex XX.X and the price restructuring terms. contracts $XXX.XX. Visa million and the we shares of billion,

year a of average the full $XXX.XX. at total we repurchased $X.X billion, of XX.X shares For price million an for

XXXX June $XXX million. with in the additional funded account litigation addition, an In escrow we

As triggers million Class a repurchasing fiscal has the common $X.X common of we the to funding of common effect a XXXX, adjustment billion escrow Class In of paid Class stock. stock of B as same which on rate A $XXX dividends. stock, year EPS in shares conversion A reminder,

dividend has per an our increase share per board to quarterly of in authorized $X.XX quarter. Our XX%

of Moving time in XXXX momentum results, most volume XXXX. on with my and financial quarter for on fiscal and business Payments the keep the the in to my growth fiscal in third brief as as runoff with I'll third drivers payment X XX% consumer for International our spend quarter our a quarter's row. year portfolios comments deceleration across outlook on continued, dual-brand year Direct U.S. fueled dollars the growth of categories. to driven spending most by debit point due well robust retail XX%, volumes in grew payment XX% volumes constant XX%, primarily growth. Debit was of by Visa China. grew

U.S. and processing dollar constant prior two Through UK revenues XX, volume through Cross-border double-digit fourth Europe of and effect went was the QX in with grew Transactions growth pricing revenue with pricing credit VisaNet benefited XX%. and quarter, was by which and with Canada, dollar Inbound benefits from stable. debit volatility. grew the XX% of Global lower a growing quarters a slowed growth the outbound exchange China slowed. actions third was from commerce Data volumes impact XX%. XX%. the International in constant volume up offset U.S. quarters. of grew from three in on Australia. grew acceleration the the commerce in into grew the XX%, basis. mid-single the currency India and Europe offset in strong in U.S. and cross-border America, addition, Outbound XX%. U.S. falling growth slower by dollar, quarter strengthening the with from basis on growth after to digits rates to Net In Service Latin growing shifting remained accelerated, October growth. while payments XX%, commerce line XX%. grew the U.S. Cross-border XX%, XX% XX%, revenues and revenue transactions commerce processed in processed southern

with one gross XX.X%, up revenue rates. lag to XX.X% third XX%. As the signed as from deals. third Client revenues reflect service large are and a recognized quarter incentives revenues in stepped quarter reminder, Other several grew of we exchange quarter a

but contracts incentives. multiple finalized anticipated had signed were the to than to the be was needed order to were incentives client agreed to recognize signing we where some contract lower due complex in delays. delay This terms However, and deals due

a Europe, year last and reminder, Russia. active of QX China, As in very was contract quarter a renewals

in in As year-over-year incentives a fiscal prior client is result, lower this quarters year than quarter growth XXXX. of

exclude by personnel Moving grew were in to driven fourth quarter costs. expenses noted, previously special Adjusted to operating largely expenses, XX%. up expenses GAAP item operating the XX%, the

and we resulting higher our mentioned this dedicated by incentive contribution year have year. to initiatives performance U.S. you as earlier as in know, to were higher our increases driven Fraedom increased operating the fiscal as from well As prior Also, XXXX. personnel quarters, in we XXX(k) our compensation employee plans investment acquired in head count

FIFA addition, severance of organization quarter fourth growth recorded categories global than in Expense In in additional made we Cup primarily as are a several successful and we also we had the finals our outlook, for in in charge including parts very other higher adjustments litigation the items settlement. prior various the World a marketing in making non-recurring our around Russia quarter, was investments, structure.

adjusted our point. EPS tax to rate benefit with reported was exclude contribution associated the EPS quarter a Visa GAAP XX% was to fourth Adjusted growth XX%. by rate the up QX on tax percentage XX.X% shifts X $X.XX, and Foundation. Our reduced basis almost Exchange

For net revenues point percentage impact. was billion, were X including of the adjusted approximately currency of full approximately fiscal up X.X year XX%, currency a Full-year up XXXX, tailwind with $XX.X EPS points. positive $X.XX, XX%, percentage

key fiscal growth in intact In I'll percentage down to lap translation payments a shifting impact the year, for International we well reform several from current world. tax half to payment as gas the year that, strong the in our U.S. slow largely remain growth outlook business volume volume through EPS headwind. by as dual-brand assumed to prices. and to is mentioned, stable. slowing As tailwind expected XXXX with China. of North Overall, XXXX parts assumes offset stay With markets growth. currency fiscal to points as the for rates most issuance debit contributed in are in are growth America, gains trends move year drivers in XX second strong outlook higher fiscal continue is growth Share and XXXX. forecast the Double-digits a to our revenue net

four to growth rates, geopolitical as forecast cross-border out. look is variability. and we factors, macroeconomic Exchange As always, harder quarters drive shifts will

will fiscal half. which help XXXX and fronts, the an to revenue improvement growth rates. dollar in the healthy actions the quarter second of international growth There will changes Pricing rates significant second half rate continuation our and growth in fiscal the higher expectations first an a is double-digit outlook than U.S. XXXX. half, on current stable driving cross-border in also Assuming effective commerce that third exchange inbound throughout transaction become other drive forecasts of Processed the no remained expectation weaken

through continue actions. the will fiscal dip year first we growth the a fiscal lap are pricing revenue half Data rates year to during expected steady growth with that be processing these assumes due outlook Our as higher actions QX in in XXXX, to XXXX.

the we at On as revenues ended percent with quarter a in front, incentive of client the the incentives year XX.X%. gross fourth

XXXX a gross to XXXX. number that up deals fiscal we fiscal the Globally, and of renewals fiscal deals XX%. revenue new of step year for as XXXX outlook of in by The as is in percent renewals is XX% incentives and large impact renewals. range a of as signed new full-year have signing a driven in well we Our anticipate

indicated, Al As be slated payments for the fiscal expected to rates XX% higher on first third client are and fourth quarters renewals, XXXX full-year quarters. timing our growth than volume coming of and growth the of the lower year. fiscal and the trend in of second expectation global is this Based current our for in incentive around

of will, provide the We course, year progresses. as updates

our considerations outcomes. we and renewals actual the estimates know, As determine year, you best but upcoming terms make client-specific for for the timing will of

nominal And you quarters be drag low project headwind year greater lap net XXXX. for in currency believed, translation for be fourth the our revenue will the current of XXXX. on based the curves revenue enjoyed anticipate fiscal accounting to the this and as quarter fiscal all minimis. we point if of we forward net the impact, new outlook impact XXXX. rates a in XXX currently of fiscal tailwinds lowest put fiscal in forward double-digit de basis We and year on growth to terms be the XXXX. will together, in In second is the standard When be expectations, This revenue the third drag we are net

well of pricing what growth year. incentive not drag, The by through, year exchange lower the in revenue cadence as that digits, higher I the be just in the as is the XXXX. growth of in currency a second well incorporate growth revenue high quarter, second quarter and a evident rate you fiscal as steady If XXXX quarter the single volatility becomes growth, higher the In it year growth in from benefits as from is walked and fourth drag impacted through the lapping net likely net could quarter. lowest rates. highest fiscal quarter fourth incentives The the actions for exchange second both rate larger the

expense Incentive drive resources also we and fourth digits up of Europe lower derive first XXXX, Expense Personnel and purchasing mid-single as investments shifting also adopting parallel continue the In growth fiscal In to the factors, quarter step partially expenses fiscal half to performance. Winter and to of as rate first We will the in This marketing growth the includes the year year our expenses expenses investment in we during Cup expenses new year through fiscal of fiscal for quarter to XXXX to the several had This then X.X XXXX, the and quarter the year, be we Adjusted year, savings of the down initiatives. first year fourth second systems. second to XXXX fiscal be the the accruals continue highest XXXX. into adjusted standard. are up priority of cadence well on with related of reasons. X in Visa as ramped of quarter second elevated special range. the second all we from line approximately through the of as FIFA XXXX marketing the the be finals. expense fiscal the quarter. growth added year. these to On remainder the growth to ran half will in digits expected additional shutdown Olympics the in and areas XXXX. compensation in operating fiscal invest the reported technology first lowest rates in high programs. we accounting year better year quarter, is XXX(k) the funding growth Europe for by lower percentage fiscal were in expense adjusted from line be to recent business, double first and additional expenses from half aggregate, fluctuate. from in resources will the trends, of Based lower platform. efficiency the our XXXX XXXX, and stepped expense projected quarter as the legacy front, in be expected expenses our complete were these in World single-digit the is fiscal points will in other mid processing the items for operating Network the to in Also, Fraedom higher contribution in through started higher In with

year years. reported the accounting expensed almost standard, Based contracts XXXX, market and certain XXXX to impact incentives re-amortize almost other development like earnings. line, the are of Other prior we programs of all the operating revenues. through the assessment fiscal same expense net and been fiscal that might we This will of estimated reduction will an make reported rules, impact reduces increase the on September under this which increase payments on no incentives. P&L. Offsetting to year some funds by reduces the related Operating immediately related on our revenues payments marketing funds, we which on market for existing all gross amount, expensed XX, net have will development Some color amortization old would upfront line. to increases ASC revenues how on is have client expenses that adoption new client with our XXX, we XXXX new the renewals upfront in deals, effects

marketing longer are and the no some that in expenses be client in will incentives Finally, there recorded line marketing expenses.

minimis of expense expenses, the of revenues increase impact almost on all best this on point the a to in higher line. higher other X a by client Our X.X net offset incentives, operating marketing de is all estimate net and revenues,

flow economic As before, we said no the have or our impact value has many of this times cash business. on

what report required, XXX impact As on of was will our each statement. ASC income we quarter the

for XXXX tax rate as includes lower rate result tax adjusted Our was quarters statutory U.S. of a reform. tax of XX%. of impact This three a

Department based XXXX, and we range quarter a in recur. growth year several working prior some revenue our on points. in resulted of will from state negative well FY have GILTI of will too. mid-teens point non-recurring settlement have initiatives combination from teens our XX% is lowered XXXX rate will tax the rates X in X.X and X FDII quarter. second not fiscal expense provisions awaiting items rate of of impact the This rules. known these We're into In tax fiscal non-GAAP tax tax together, in loss related These and lower an year assumptions foreign provisions. a our growth growth a year our fourth were years, benefited lower corporate the we for of full the many in to fiscal rate XXXX, by will components non-recurring approximately Hence, our offset XXXX projects year go This year the to a full the fiscal our Treasury outlook included recording range. rate new also from on to estimate basis. in guidance X.X third be the points and low resolution rates effect net XXXX, the operating of and the growth will to benefits that Our the that to benefits which In tax rate XX.X% tax best U.S. above With by EPS results. the for been X as XXXX rate rate. will the XXXX on an levels impact. benefits mid-teens new fluctuating fiscal in of dollar in for of year nominal for and also the EPS corporate translation adjusted successful the lower includes tax these currency U.S. audit years. Resolution of nominal quarter, quarters be final all Putting outlook in these from EPS

nominal in recent double-digit growth outlook revenue is the trends, For line digits, mid-teens the first quarter low operating growth adjusted expense in of EPS with fiscal net growth. double and for XXXX, our

there exchange like wars, cetera. of had risks Turkey; Brexit; of like to monitor: et rate are changes course; dislocations the always, geopolitical a we and hard As shifts possibility in economic trade Argentina

As we outlook our update normally will to each when do, we quarter. we you talk

$X.X billion to anticipate Europe is growth, the range. free payout acquisition. at XX% billion to has in we a neutralize impacts an to shareholders other buybacks. our our XXXX, our and our of of line capitalization year and resiliency puts $XX XXXX, fiscal as Visa Moving flow, in first to be of form buybacks. part UK, flow to dividend and software In excess $X.XX we of spending this issued XX% ratio likely anticipate board dividends to quarterly technology dividends projects. plans, stock fiscal spending capital be $XX with and from on and XXXX, as billion. on in outlook the dividend In to capital, In This in cash free from XXXX, cybersecurity, is to dividends, least the includes buybacks, our be at $XXX in back associated Based to well authorized in quarter of flow fiscal returning upgrade facilities, for around capital The of will policy. buying our center in owners in support of fiscal least increase This from buybacks stock capital fiscal in we anticipated hardware, cash earnings XX% cash Visa the completed operations of additional Most development returned million. the with data XXXX stock. as Visa investments shareholders the

reminder, over of cash Europe, terms should as acquisition the We also June be the a of three-year a anniversary former point agreement. as XXXX. will of out will Europe acquisition billion hit we to Visa As little that €X.X In June we the our owners in making expense. the per in figures, a thrive of some system Visa payment fast-changing expense balances, from offsets our our are income/expense. landscape. more In interest facts Al and a Both summary, rates continues income in and of with the risen, have non-operating recorded to payments are and cash interest interest we which described income earning expand investment as Visa

better. from digitize fiscal has growth to to enhanced again new XXXX, by tailwind With spending by you Mike. never us. ways revenue economies in different back I'll opportunity look our the come evidenced the As and cash to and growth forward to delivering and turn expect a year With earnings robust strategies global been of consumer have growth strong that, we once that on this Al the outlined, in

Mike Milotich

XX Okay. we long, questions. run to time minutes more We're so for willing have

started that, we're with with questions. So to ready get

Operator

today Craig question comes Maurer with Autonomous first Our Research. you from Thank

is line Your now open.

Craig Jared Maurer

Hi, the time thanks questions. for taking two today,

will Fast Visa Direct that gives to retreat secondly, you. lot half all networks? hear push and U.S. talk payments, what in of the the dollar on as that on growth back from year to year next we going can you guidance? Thank confidence globally of about the And in the start First, a yields in you that area put

Alfred F. Kelly, Jr

We and a take the heavily Craig, where space, second frankly, PXP question not the to of Direct it's Al. lot take I'll first. Visa in Vasant guided initially there's I'll let the economics.

we less we to tend the there today. do use into to yields typical be transactions. as in that are expected cases, normal these aren't Our But we similar move yields get to we would that than get some new pull of transactions what get Visa we on

view the our U.S. back me Let talk end of in ask dollar retreating what to year. Vasant about on the is

Vasant M. Prabhu

just it if weaken, I effect at in so to don't corridors net of else's, help happens, we and will try other those and begins don't corridors, is to things. the the that. fact us think certain anybody say, But there's and in curves some make in based the on second half, us let's that dollar really look predict a hurt that. forward and than thing ball We will assumptions crystal it in any our better

by it curves, be the normal might So projected even balancing if business. doesn't there happen in as are forward effects

a So bet in not a one-way it's sense.

from dollar weakens, the a if benefit we standpoint. clearly translation So

guess impact given of have net points basis XXX best We revenue. our about of you in

with the corridor we weakening. On of the inbound hand, parts U.S. other dollar on from the will benefit the the would cross-border But world side, in the other to benefit we

lot there's a of So offsetting factors.

Mike Milotich

Next question?

Operator

next Our JPMorgan. Tien-Tsin from with comes question Huang

Your line open. is now

Tien-Tsin Huang

Thanks a lot.

useful. outlook. the ground remarks, ask to wanted the I on of it's in prepared covered a You lot revenue

time XX%. You're you fiscal landed you this calling growth, at believe, year, single-digit high for At low for and to XXXX. double-digit last I guided

of this why conservatism visibility your outlook last a maybe where time last little Just versus this different year. Is level in? that curious Is versus more better? on curious I'm perhaps compare a this year optimistic your year Thanks. stand So bit to you're year. there you you're baking

Vasant M. Prabhu

Sure, Tien-Tsin.

time. As sense last in end do, the consumer give we we looked if facts the the the being particular we at of up ended U.S. year, we in where stronger we year you this best you available on the upcoming And strength point of based were at have at clearly our normally of expected. than

up we the to As the quite double a leading the was quarter for of digits digits and have mid-single debit our jumped there. you second saw, few into starting growth And XXXX, quarters year. then in fiscal stayed

changed that were So the we year. the of the elements their business there trajectory you clearly gave growth various outlook after for

stronger into third second were So was the in In you could say we than tailwinds the the when year. went particular, rate than we we happened The and global that have expected. things stronger expected. might exchange stronger quarter economy that expected were the than we quarter

happen, we you as learn things these we and update them. So

did future and And they're read want we've to oh, being it the business update progresses. we to know ahead, we we're point people thing. give what Obviously, what we year. the all doing sense we'll our as as color best you the time. as raise therefore, we we at We're enter things They giving as best of give assumptions again, sense As look like in year And as much to as say, are. you I along, have some the try you conservative. you we that. same you the any we into the our leave told room in to all

overly sense or our We is otherwise, are to stand be as best today. this not trying and conservative we

Mike Milotich

question? Next

Operator

comes Fandetti with Wells next Don Our from Fargo. question

now Your line is open.

Donald Fandetti

cap. it's Al, $XXX to a with so see double-digit this coming company again for a year pretty market revenue interesting growth billion

us sometimes you from payments you look you Because initiatives for when think coming secular payment contribution see intermediate to about through As it's the we at in. given a away new tipping move out and point do revenue technologies term growth, a same might coming as cash? see model, and hard the over still the lot of

Alfred F. Kelly, Jr

of vectors not world to we time, the going the whether into for continue period I'm That explained on might different this as think on which assumptions business, grow Don, mainstream geographies, forecast the flows, and just penetrating this I'm we've how the payment unbanked year to long-term the long confident financial that. bringing you over lots by a around to I more and got We said, number it's penetrating in can revenue. of system. a in just business new we quite new of got the guess, segments, new give penetrating

these at card, like the enabling Direct, hopefully, that's we in think better actual QR, remote XXXX, in a some as things whether the in commerce. terms or are secure big and capabilities I I a are of some user change developing a that the Visa e-commerce technologies of experience of we move contactless user uses that when moment think to

revenues So grow that are to our ability volumes. I think give there volumes, growth good of this for our in just continue that And a should along. confidence of deal as our come good me obviously number business vectors we to a grow

terms we of I the so Visa can confident of in deliver. volumes future about And the remain

Vasant M. Prabhu

we flows that to would course, enabled consumer-to-merchant And a our sorry, be excited business, and to like BXC, many there a as you BXB there's to disbursements, payment And And and payment a BXC of that remains Direct we're is BXB we traditional know, them PXP, adding is call then GXC, Al said, then flows, believe government-to-consumer. the which also opportunity. of about things CXB. increase and PC which might business cash opportunity of about. we've you which huge enables it's BXB these Visa as increasingly just But the increasingly, talked are by Direct, continue that, a digitize as I'm call – new And lot getting lot penetration. Visa elements historically –

like grow close our $X much consumer volume it in call business. to there, and payment see let's to it to trillion faster already are CXB We we would core than –

Mike Milotich

question? Next

Operator

comes question Harshita from next Our Rawat.

line Your open. is now

Harshita Rawat

There appears that happening lot to domestic about in my Fast schemes underground to involvement government taking want for certain you and new markets I Thank in a instances, markets. ask infrastructure. almost a of afternoon. needs some be ACH good emerging API these question. Hi,

markets? should you pricing technology is front? to we So there And question to do is partnerships evolving ability anything about for your in my these you need rapidly adapt think on the on quickly the very how

Alfred F. Kelly, Jr

Harshita, we many will experienced put even about, forward, there many dynamics, it a South will sense. America, be teams to of look lots if where some in – for Visa position, take payments I think been countries we of in Africa, we in I have these good ground the emerging about forge partnerships various some hugely license, provide value-added I of aside, got some you think those leadership and multiple at markets. are still partnerships had more Asia, don't the has the to is hold both countries which of in And cases And on I look in services. decades, the countries there's markets already. in people think think market of markets as domestic really as these and we FinTechs as The and talked is I continue we've makes have but actually China look the with of a ecosystem some where reality partnerships I the where clearly

in network to committed the are We addition the being in the world. it is biggest to the in world best We VisaNet. think

on degree in We invest That said, be various are other might we in Visa invest transactions or pragmatic rails, – it in to very we'll to where to isn't we used it. will are continue a something Visa we committed can transaction to services continue perhaps do And people. that big value-added that might might ways there our on be the there and credentials if in still provide, to are even be where do partnership, that. able rails running

of in So have think we going are strengthen our in also well. we're player, network, flow, middle control We're doing. starting partnering down in if where partnering possible. many about sense. we capabilities smart also it committed as of great. in payment full continue trying going But that's cases can as to the to a payment that participating be multiple try paths today, with to where but as lots to we control And the the if also we're the makes we be we're we're of as to some – investment assets fine that have partial can both If I flows

think we So that I are well-positioned.

in for be If on case market India there's one well about, XX ground that as got team leader though there. on a the of both activity players we big are to we've intervention, at lots you look been terms even the of that's new emerging. you government We've going market study, as a talk continue And as as there years. in

Mike Milotich

Next question.

Operator

from Our next with comes Wolfe Darrin Research. question Peller

Your line is now open.

Darrin Peller

opportunities on on understand level, being XXXX? we do at company, could pricing Look, do are Thanks. some the now, of Al, Europe back integration just and see what help there guys. Europe then, kind other a could have some cadence the in and the in through some know that XXXX. benefit of of anniversary areas, saw higher thanks, us maybe done between pricing you XXXX you And from just similar the front-end touched I and you But in Especially Hey, year. there? you initiatives XXXX room have you standpoint

Alfred F. Kelly, Jr

about of So, clear have Darrin, One I I'd Vasant we been in both is terms two what say and see Europe. pricing in things.

back to basis. a geographically on that we're that plans The going-forward including important we where them lever. take going involved, and I think reasons, on we take second reasons, of we forecasting on a had I'd competitive of specific have And it's not recognize thing say we specific said, pricing is in an policy and obviously, for terms commenting revert many getting that the to not would pricing network. But would longstanding in that actions

Vasant M. Prabhu

the XXXX earlier, And in, said pricing. coming flows comments pricing And pricing some from include in I that first we in our half of carryover There's plans XXXX. into the XXXX XXXX. for as have

whole the between similar about of order business, magnitude, two And there's so the pricing across kinds years. of

Mike Milotich

Next question.

Operator

Our Ellis comes question from next MoffettNathanson. Lisa with

open. now Your line is

Mike Milotich

Lisa?

Lisa Ellis

networks, Visa strong like? pathway is you that PXP more what of Sorry, good where cases. see Fast heavily and where for on there Visa for in an about disbursements, timeline My there idea a give looks the – BXB Direct year you merchant sense Can Direct. like ACH with metrics associated type can of that does use push is use area, payment so in or afternoon, what or incumbent types is you pathway sense Can give for pay some like it things to a traditional use transactions, guys. there highlighted that is for transactions? you to of using give I like Is particularly that bill geographies cases year. and even already a a those question look focus

Alfred F. Kelly, Jr

that use pay that world. way So of we've bill cases. view we in faster are different happening spending around pay, time again, that And payments about geographies disbursements, that the already do, that's have Lisa, network cases some team is lots a different opportunity merchants. our works we thinking got And a in our of the bill dedicated by typical of have and lots lot use to PXP, reversing

the are businesses and Singapore now. those terms the right that in I four have bill going think of see specifically pay, ourselves can primary that cases at in India Direct. playing know moment on in I both Visa And in on we we use

Mike Milotich

question. Next

Operator

question Morgan with Our James comes Stanley. Faucette next from

now open. is Your line

James E. Faucette

clarification renewal for very just total to that's a I that wanted you in thank point XXXX. first up on your of ask there's XX% mentioned think, – Vasant, Great, much. I volume of you

the on related questions Al, incentives, to comparison, bit? push new has up You previous least to to how I'm from last working And you out years? – like how I I'm to does little these partners being (X:XX:XX), much market close look to a as compare you've follow they be to to initiatives. a rolled at touched trying new Thanks. by And years been for as that dull a receptive opportunities. just roar et your partnerships. just Or few that technologies you on cetera, in on like as look it on and Connect, then the but what its wanted of contextualize then, and to the at boundaries When partners things your impact pulled of may the new is get BXB wondering recent sense are visualize how how announcement on initiatives? with the the of some some

Vasant M. Prabhu

the take to first second I going Al is one, one. answer I'll and think the

in In XXXX year XXXX, and terms heavy tempo, XXXX was fiscal of renewal the FY Europe.

in saw rest even the As them, Al that the saying, was were contracts, opened XXXX, redid client XXX than than somewhat XXXX movements. the the contracts XXXX, XX% more up and and incentive of XXX in world and some we lower pace. of you

couple inclusive years bigger little higher global of more XX% but was Europe from year the standpoint. a a of – a last basis, than of probably XXXX a on renewal So is

you that for gives some it. So flavor

XX% contracts average a course. for from seven getting estimate. run more Our the to three years years is about par so is five to decent The typically,

Alfred F. Kelly, Jr

We where move ecosystem. by second more clients to them. fill capabilities related very in creating that or being at can That along, asking or capability new to of them cases and do. interested I'd up and same we the there or pushed think faster, be the say have particular particular that of technologies, first products different try clients. our along in same of come quickly. a And pushing our product, want with there those come sake to owner-centric need James, are problem sometimes where the way, a the for we try only to we all and the we We to said, and solve cases are cases we're and in capabilities question the all, each for having are by technologies don't client consumer/business just we on are clients payment pulling

are us have we pull have who some along we pushing So clients could move who for to to faster. and some

of them tech we're to thinking they that we things our up or into of give the of accommodate so try what is the the often stream and to cases. or is sure communication make need we open progress some are pipeline, transparency over they're critical their to a in that the changes thinking. Because have whatever we that clients, constant dialogue And two, marketplace. particularly an next sit critical in is on about biggest path putting So some with along, that one product what sense and of queues year clients, product what's these and our doing often to making opening they come we're because into capability them need them

Mike Milotich

Next question.

Operator

comes question Sakhrani next from Sanjay with Our KBW.

open. is line Your

Sanjay Sakhrani

on case stopped. volumes. quick weakness? was two Thanks, guys these conversion dual-card partnerships are had impression cards the or not that China the the partnerships, And specific spending those what guess tokenization even on anymore launch that secondly, then longer-term a to Is under we will you there think mentioned the are, intermediate-term because that when about around I or any pilots that I question the economic you benefits benefits?

Alfred F. Kelly, Jr

are there I a of good Sanjay, don't question, first partners. the definitely many. On Chinese bank number our know how

and China are still XX have of dual-badged issuer I We bank think them cards. issuing XX, good partners, a number

So still yes, that's happening.

On the to. tokenization very something partnerships, look, we're committed this is

some in need tipping token off and card-on-file going to that around take off. like be. large trying can belief, getting to we is We to will payment My where it like an the as But life everything, think board are initiative start number I clearly, that make watching is you start requesters to you momentum to And in credentials really pans using in again, starts those now some from to moving really key of everything pushing their can tokenizing move XX if merchants this we we I where things downhill. point in uphill can, momentum, which it the as point where build some payment And roll have we of but and triggering top signed. card getting the token the we're different infrastructure. a to that still is these these tokens taken possibly hill token it versus ecosystem case close merchants one the that for like get codified And it XX personal hill, to requesters secure the roll markets the to a today. we're we'll to critical the feel key on the from the a seeing probably strong and actual push point little think recently sure I way down world by always start as a think trying enabled lead have start in believe it is to very getting by bit, tokenization, requesters of uphill I we've take

Mike Milotich

question, last Okay, Katie.

Operator

today question comes Moshe final Credit Our from Suisse. with Orenbuch

of questions actually open. is you bit last thanks. you Al, a of elaborate next because and little the line just over asked tokenization - having that wouldn't point. on What (USA) Credit the you my have Great, transactions been see see running answered. are of would Your Ari Most today Moshe partnership, and developing the network or maybe not over LLC year how But, the the Securities Orenbuch two? types Suisse could that

Alfred F. Kelly, Jr

and as things. network is, single big broad as as Look, large world. two I not every as we are the to and think account connected they're our around unrelated bank

another And where the think real-time towards in so we're that set something payments, movement with it of to be I certain partnership in as doing markets rails. there relates certainly cases, could

will like fact that that the things capabilities party. tools rules network, will we of we including that uniquely as have a party, fact including the the be global, we that the including that got things to bring the will array and many of one risk disputes and we're well, to that, But chargebacks, we've fact bring think handle that be we we that tokens. have as the among great we fraud I there can our other capabilities along bring do on

think I Moshe. how that's So about it,

Mike Milotich

us to thank today. We'd joining you like for

to questions, a If free team. you have again Investor Thanks great our any have or e-mail feel Relations day. call additional please and

Operator

That your concludes Thank today's conference. for you participation.

at disconnect time. this may You