What changed in this filing

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Item 1. Financial Statements

2024-04-24 compared with 2024-01-26 · 220 added, 115 removed, 636 unchanged (35% of the section changed)

33 unchanged sentences

Commitments and contingencies (Note 13)

Series A, Series B and Series C convertible participating preferred stock (preferred stock), $ 0.0001 par value:

25 shares authorized and 5 (Series A less than one, Series B 2 , Series C 3 ) shares issued and outstanding as of December 31, 2023 and September 30, 2023

Class A, Class B and Class C common stock and additional paid-in capital, $ 0.0001 par value:

2,003,341 shares authorized (Class A 2,001,622 , Class B 622 , Class C 1,097 );

1,836 (Class A 1,582 , Class B 245 , Class C 9 ) and 1,849 (Class A 1,594 , Class B 245 , Class C 10 ) shares issued and outstanding as of December 31, 2023 and September 30, 2023, respectively

20,490 20,452

Preferred stock, $ 0.0001 par value, 5 shares issued and outstanding as of March 31, 2024 and September 30, 2023

Common stock, $ 0.0001 par value:

Class A common stock, 1,574 and 1,594 shares issued and outstanding as of March 31, 2024 and September 30, 2023, respectively

Class B-1 common stock, 245 shares issued and outstanding as of March 31, 2024 and September 30, 2023

Class C common stock, 9 and 10 shares issued and outstanding as of March 31, 2024 and September 30, 2023, respectively

Right to recover for covered losses ( 175 ) ( 140 )

Additional paid-in capital 20,709 20,452

Accumulated income 19,347 18,040

10 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

(in millions, except per share data)

Net revenues $ 8,634 $ 7,936

Net revenue $ 8,775 $ 7,985 $ 17,409 $ 15,921

Operating Expenses

34 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

(in millions)

21 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended December 31, 2023

Three Months Ended March 31, 2024

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

4 unchanged sentences

(in millions, except per share data)

Balance as of December 31, 2023 5 $ 1,615 1,836 $ 20,490 $ ( 139 ) $ 18,422 $ ( 655 ) $ 39,733

Net income 4,663 4,663

Other comprehensive income (loss)

( 343 ) ( 343 )

VE territory covered losses incurred ( 36 ) ( 36 )

Conversion to class A common stock

( 13 ) 1 13 —

Share-based compensation

Stock issued under equity plans 1 79 79

Restricted stock and performance-based shares settled in cash for taxes

Cash dividends declared and paid, at a quarterly amount of $ 0.52 per class A common stock

( 1,060 ) ( 1,060 )

Repurchase of class A common stock ( 10 ) ( 106 ) ( 2,678 ) ( 2,784 )

Balance as of March 31, 2024 5 $ 1,602 1,828 $ 20,709 $ ( 175 ) $ 19,347 $ ( 998 ) $ 40,485

(1) Increase or decrease is less than one million shares.

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2024

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

Income Accumulated

Comprehensive

Income (Loss)

Shares Amount Shares Amount

(in millions, except per share data)

Balance as of September 30, 2023 5 $ 1,698 (1)

4 unchanged sentences

Recovery through conversion rate adjustment ( 25 ) 25 —

Conversion to class A common stock upon sales into public market — (2)

Conversion to class A common stock

( 71 ) 2 71 —

6 unchanged sentences

Repurchase of class A common stock ( 25 ) ( 267 ) ( 6,126 ) ( 6,393 )

Balance as of December 31, 2023 5 $ 1,615 (1)

Balance as of March 31, 2024 5 $ 1,602 (1)

1,828 $ 20,709 $ ( 175 ) $ 19,347 $ ( 998 ) $ 40,485

(1) As of December 31, 2023 and September 30, 2023, the book value of series A preferred stock was $ 398 million and $ 456 million, respectively.

(1) As of March 31, 2024 and September 30, 2023, the book value of series A preferred stock was $ 385 million and $ 456 million, respectively.

Refer to Note 5—U.S.

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Three Months Ended December 31, 2022

Three Months Ended March 31, 2023

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

4 unchanged sentences

(in millions, except per share data)

Balance as of December 31, 2022 5 $ 1,981 1,881 $ 19,827 $ ( 28 ) $ 16,403 $ ( 1,259 ) $ 36,924

Net income 4,257 4,257

Other comprehensive income (loss)

VE territory covered losses incurred ( 7 ) ( 7 )

Conversion to class A common stock

( 96 ) 2 96 —

Share-based compensation

Stock issued under equity plans 1 62 62

Restricted stock and performance-based shares settled in cash for taxes — (1)

Cash dividends declared and paid, at a quarterly amount of $ 0.45 per class A common stock

( 941 ) ( 941 )

Repurchase of class A common stock ( 10 ) ( 107 ) ( 2,109 ) ( 2,216 )

Balance as of March 31, 2023 5 $ 1,885 1,874 $ 20,095 $ ( 35 ) $ 17,610 $ ( 990 ) $ 38,565

(1) Increase or decrease is less than one million shares.

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2023

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

Income Accumulated

Comprehensive

Income (Loss)

Shares Amount Shares Amount

(in millions, except per share data)

Balance as of September 30, 2022 5 $ 2,324 (1)

4 unchanged sentences

Recovery through conversion rate adjustment ( 14 ) 15 1

Conversion to class A common stock upon sales into public market — (2)

Conversion to class A common stock

( 425 ) 7 425 —

6 unchanged sentences

Repurchase of class A common stock ( 26 ) ( 275 ) ( 5,056 ) ( 5,331 )

Balance as of December 31, 2022 5 $ 1,981 (1)

Balance as of March 31, 2023 5 $ 1,885 (1)

1,874 $ 20,095 $ ( 35 ) $ 17,610 $ ( 990 ) $ 38,565

(1) As of December 31, 2022 and September 30, 2022, the book value of series A preferred stock was $ 723 million and $ 1.0 billion, respectively.

(1) As of March 31, 2023 and September 30, 2022, the book value of series A preferred stock was $ 627 million and $ 1.0 billion, respectively.

Refer to Note 5—U.S.

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions)

24 unchanged sentences

Proceeds from maturities and sales 2,145 1,760

Acquisitions, net of cash and restricted cash acquired ( 915 ) —

Purchases of other investments ( 14 ) ( 70 )

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Intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements are presented in accordance with U.S.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S.

Securities and Exchange Commission (SEC) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S.

5 unchanged sentences

GAAP requires management to make estimates and assumptions about future events.

These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and reported amounts of revenues and expenses during the reporting period.

These estimates may change as new events occur and additional information is obtained, and will be recognized in the period in which such changes occur.

1 unchanged sentence

Note 2—Acquisitions

On January 16, 2024, Visa acquired Pismo Holdings, a global cloud-native issuer processing and core banking platform, for $ 1.0 billion in cash.

Due to the limited amount of time since the acquisition date, the initial allocation of the purchase price is not yet complete.

The Company expects to provide the initial purchase price allocation within its Form 10-Q for the second quarter of fiscal 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Note 3—Revenues

The nature, amount, timing and uncertainty of the Company’s revenues and cash flows and how they are affected by economic factors are most appropriately depicted through the Company’s revenue categories and geographical markets.

The following tables disaggregate the Company’s net revenues by revenue category and by geography:

On January 16, 2024, Visa acquired Pismo Holdings, a global cloud-native issuer processing and core banking platform, for a purchase consideration of $ 929 million.

The Company allocated $ 139 million of the purchase consideration to technology, customer relationships, other net assets acquired and deferred tax liabilities and the remaining $ 790 million to goodwill .

Note 3—Revenue

The nature, amount, timing and uncertainty of the Company’s revenue and cash flows and how they are affected by economic factors are most appropriately depicted through the Company’s revenue categories and geographical markets.

The following tables disaggregate the Company’s net revenue by revenue category and by geography:

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

(in millions)

Service revenues $ 3,915 $ 3,511

Data processing revenues 4,356 3,827

International transaction revenues 3,019 2,797

Other revenues 692 587

Service revenue

$ 4,033 $ 3,771 $ 7,948 $ 7,282

Data processing revenue

4,259 3,819 8,615 7,646

International transaction revenue

2,984 2,749 6,003 5,546

Other revenue

756 551 1,448 1,138

Client incentives ( 3,257 ) ( 2,905 ) ( 6,605 ) ( 5,691 )

Net revenues $ 8,634 $ 7,936

$ 8,775 $ 7,985 $ 17,409 $ 15,921

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

(in millions)

1 unchanged sentence

International 5,132 4,445 10,121 8,814

Net revenues $ 8,634 $ 7,936

Remaining performance obligations are comprised of deferred revenues and contract revenues that will be invoiced and recognized as revenues in future periods primarily related to value added services.

As of December 31, 2023, the remaining performance obligations were $ 3.2 billion.

The Company expects approximately half to be recognized as revenues in the next two years and the remaining thereafter.

However, the amount and timing of revenue recognition is affected by several factors, including contract modifications and terminations, which could impact the estimate of amounts allocated to remaining performance obligations and when such revenues could be recognized.

$ 8,775 $ 7,985 $ 17,409 $ 15,921

Remaining performance obligations are comprised of deferred revenue and contract revenue that will be invoiced and recognized as revenue in future periods primarily related to value added services.

As of March 31, 2024, the remaining performance obligations were $ 3.4 billion.

The Company expects approximately half to be recognized as revenue in the next two years and the remaining thereafter.

Note 4—Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

9 unchanged sentences

$ 18,948 $ 21,990

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

and Europe Retrospective Responsibility Plans

9 unchanged sentences

litigation escrow account:

Three Months Ended

Six Months Ended

(in millions)

12 unchanged sentences

Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover certain losses resulting from VE territory covered litigation (VE territory covered losses) through a periodic adjustment to the class A common stock conversion rates applicable to the series B and C preferred stock.

VE territory covered losses are recorded in the contra-equity account right to recover for covered losses within stockholders’ equity before the corresponding adjustment to the applicable conversion rate is effected.

VE territory covered losses are recorded in right to recover for covered losses, a contra-equity account within stockholders’ equity, before the corresponding adjustment to the applicable conversion rate is effected.

Adjustments to the conversion rate may be executed once in any six-month period unless a single, individual loss greater than € 20 million is incurred, in which case, the six-month limitation does not apply.

1 unchanged sentence

The following table presents the activities related to VE territory covered losses in preferred stock and right to recover for covered losses within stockholders’ equity:

Three Months Ended

December 31, 2023

Six Months Ended

March 31, 2024

Preferred Stock Right to Recover for Covered Losses

8 unchanged sentences

$ 419 $ 798 $ ( 175 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Three Months Ended

December 31, 2022

Six Months Ended

March 31, 2023

Preferred Stock Right to Recover for Covered Losses

12 unchanged sentences

The following table presents the as-converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred stock recorded within the Company’s consolidated balance sheets:

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

As-converted Value of Preferred Stock (1),(2)

10 unchanged sentences

As-converted and book values are based on unrounded numbers.

(2) As of December 31, 2023, the as-converted value of preferred stock is calculated as the product of:

(2) As of March 31, 2024, the as-converted value of preferred stock is calculated as the product of:

(a) 2 million and 3 million shares of the series B and C preferred stock outstanding, respectively;

5 unchanged sentences

and (c) $ 230.01 , Visa’s class A common stock closing stock price.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Note 6—Fair Value Measurements and Investments

4 unchanged sentences

2024 September 30,

2023 December 31,

2023 March 31,

2024 September 30,

3 unchanged sentences

$ 9,050 $ 13,504 $ — $ —

government-sponsored debt securities

Treasury securities

26 unchanged sentences

The amortized cost, unrealized gains and losses and fair value of debt securities were as follows:

December 31, 2023

March 31, 2024

Cost Gross Unrealized Fair

3 unchanged sentences

Total $ 8,293 $ 4 $ ( 35 ) $ 8,262

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

September 30, 2023

5 unchanged sentences

Debt securities with unrealized losses for less than 12 months and 12 months or greater were as follows:

December 31, 2023

March 31, 2024

Less Than 12 Months

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Equity Securities

The Company’s non-marketable equity securities include investments in privately held companies without readily determinable fair values.

For the three months ended March 31, 2024 and 2023, the Company recognized net unrealized losses of $ 23 million and $ 82 million, respectively, on marketable and non-marketable equity securities held as of period end.

For the six months ended March 31, 2024 and 2023, the Company recognized net unrealized gains of $ 13 million and net unrealized losses of $ 184 million, respectively, on marketable and non-marketable equity securities held as of period end.

Fair value measurement alternative.

The Company’s investments in privately held companies do not have readily determinable fair values.

These investments are measured at fair value on a non-recurring basis and are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity and the fact that significant inputs used to measure fair value are unobservable and require management’s judgment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The following table summarizes the total carrying value of the Company’s non-marketable equity securities that were accounted for using the fair value measurement alternative and held as of December 31, 2023, including the cumulative unrealized gains and losses:

The following table summarizes the Company’s non-marketable equity securities held as of period end that were accounted for using the fair value measurement alternative:

(in millions)

3 unchanged sentences

Carrying amount

Unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities accounted for using the fair value measurement alternative and still held as of December 31, 2023 and 2022, respectively, were as follows:

Unrealized gains and losses of the Company’s non-marketable equity securities held as of period end that were accounted for using the fair value measurement alternative were as follows:

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

(in millions)

1 unchanged sentence

Downward adjustments (including impairment) $ ( 15 ) $ ( 89 ) $ ( 15 ) $ ( 89 )

For the three months ended December 31, 2023 and 2022, the Company recognized net unrealized gains of $ 36 million and net unrealized losses of $ 102 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

Other Fair Value Disclosures

2 unchanged sentences

If measured at fair value in the financial statements, these instruments would be classified as Level 2 in the fair value hierarchy.

As of December 31, 2023, the carrying value and estimated fair value of debt was $ 20.7 billion and $ 19.0 billion, respectively.

As of March 31, 2024, the carrying value and estimated fair value of debt was $ 20.6 billion and $ 18.6 billion, respectively.

As of September 30, 2023, the carrying value and estimated fair value of debt was $ 20.5 billion and $ 17.7 billion, respectively.

Other financial instruments not measured at fair value.

As of December 31, 2023, the carrying values of settlement receivable and payable and customer collateral are an approximate fair value due to their generally short maturities.

As of March 31, 2024, the carrying values of settlement receivable and payable and customer collateral are an approximate fair value due to their generally short maturities.

If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.

1 unchanged sentence

Certain non-financial assets such as goodwill, intangible assets and property, equipment and technology are subject to non-recurring fair value measurements if they are deemed to be impaired.

The Company performed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2023, and concluded there was no impairment as of that date.

No recent events or changes in circumstances indicated that impairment existed as of December 31, 2023 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The Company performed an annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2024, and concluded there was no impairment as of that date.

No recent events or changes in circumstances indicated that impairment existed as of March 31, 2024 .

The Company had outstanding debt as follows:

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This indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement.

The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement risk, which may require clients to post collateral if certain credit standards are not met.

Historically, the Company has experienced minimal losses as a result of its settlement risk guarantee.

1 unchanged sentence

The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time, which vary significantly day to day.

During the three months ended December 31, 2023, the Company’s maximum daily settlement exposure was $ 133.2 billion and the average daily settlement exposure was $ 83.0 billion.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement exposure, which may require clients to post collateral if certain credit standards are not met.

The Company held the following collateral to manage settlement exposure:

2023 September 30,

(in millions)

Restricted cash

$ 3,164 $ 3,005

Pledged securities

Letters of credit 1,779 1,738

Guarantees 1,054 1,047

Total $ 6,501 $ 6,201

During the six months ended March 31, 2024, the Company’s maximum daily settlement exposure was $ 133.7 billion and the average daily settlement exposure was $ 82.3 billion.

To mitigate the risk of settlement exposure, the Company holds various forms of collateral including restricted cash, letters of credit, guarantees, beneficial rights to trust assets and pledged securities.

As of March 31, 2024, the Company had total collateral of $ 7.2 billion.

Note 9—Stockholders’ Equity

1 unchanged sentence

The number of shares of each series and class, and the number of shares of class A common stock on an as-converted basis were as follows:

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

Outstanding Conversion Rate Into

10 unchanged sentences

245 1.5875 (3)

390 245 1.5875 (3)

Class C common stock 9 4.0000 37 10 4.0000 38

9 unchanged sentences

retrospective responsibility plan:

Three Months Ended

Six Months Ended

(in millions, except per share data)

4 unchanged sentences

(1) Effective price per share for each adjustment is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The following table presents the reduction in the number of as-converted series B and C preferred stock after the Company recovered VE territory covered losses through conversion rate adjustments under the Europe retrospective responsibility plan:

Three Months Ended

December 31, 2023 Three Months Ended

December 31, 2022

Six Months Ended

March 31, 2024 Six Months Ended

March 31, 2023

Series B Series C Series B Series C

10 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

(in millions, except per share data)

4 unchanged sentences

$ 2,784 $ 2,216 $ 6,393 $ 5,331

(1) Shares repurchased in the open market reflect repurchases that settled during the three months ended December 31, 2023 and 2022.

(1) Shares repurchased in the open market reflect repurchases that settled during the three and six months ended March 31, 2024 and 2023.

All shares repurchased in the open market have been retired and constitute authorized but unissued shares.

3 unchanged sentences

These authorizations have no expiration date.

As of December 31, 2023, the Company’s share repurchase programs had remaining authorized funds of $ 26.4 billion.

As of March 31, 2024, the Company’s share repurchase program had remaining authorized funds of $ 23.6 billion.

All share repurchase programs authorized prior to October 2023 have been completed.

Class B common stock.

The certificate of incorporation amendments automatically redenominate all shares of class B common stock as class B-1 common stock with no changes to the par value, conversion features, rights and privileges of the class B common stock.

The amendments also authorized new classes of class B common stock that will only be issuable in connection with an exchange offer where a preceding class of B common stock was tendered in exchange and retired.

The new authorization will have no impact to outstanding diluted earnings per class A common stock.

During the three months ended December 31, 2023 and 2022, the Company declared and paid dividends of $ 1.1 billion and $ 945 million, respectively.

On January 23, 2024, the Company’s board declared a quarterly cash dividend of $ 0.52 per share of class A common stock (determined in the case of class B-1 and C common stock and series A, B and C preferred stock on an as-converted basis), payable on March 1, 2024, to all holders of record as of February 9, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

On January 23, 2024, Visa’s common stockholders approved amendments to the Company’s certificate of incorporation authorizing Visa to implement an exchange offer program that would have the effect of releasing transfer restrictions on portions of the Company’s class B common stock by allowing holders to exchange a portion of their outstanding shares of class B common stock for shares of freely tradeable class C common stock.

The certificate of incorporation amendments automatically redenominated all shares of class B common stock outstanding at the amendment date as class B-1 common stock with no changes to the par value, conversion features, rights and privileges of the class B-1 common stock.

The amendments also authorized new classes of class B common stock that will only be issuable in connection with an exchange offer where a preceding class of B common stock is tendered in exchange and retired.

When referred to prior to January 23, 2024, class B common stock means the Company’s legacy class B common stock, and following January 23, 2024, means the Company’s class B-1 common stock, and to the extent issued in an exchange offer, class B-2 common stock, class B-3 common stock, class B-4 common stock and class B-5 common stock, collectively.

Capital stock authorized.

As of March 31, 2024 and September 30, 2023, the Company was authorized to issue 25 million shares of preferred stock, of which the following series have been created and authorized:

4 million shares of series A convertible participating preferred stock, 2 million shares of series B convertible participating preferred stock and 3 million shares of series C convertible participating preferred stock.

As of March 31, 2024, the Company was authorized to issue 2.0 trillion shares of class A common stock, 499 million shares of class B-1 common stock, 123 million shares of class B-2 common stock, 61 million shares of class B-3 common stock, 31 million shares of class B-4 common stock, 15 million shares of class B-5 common stock and 1.1 billion shares of class C common stock.

As of September 30, 2023, the Company was authorized to issue 2.0 trillion shares of class A common stock, 622 million shares of class B-1 common stock and 1.1 billion shares of class C common stock.

During the three months ended March 31, 2024 and 2023, the Company declared and paid dividends of $ 1,060 million and $ 941 million, respectively.

During the six months ended March 31, 2024 and 2023, the Company declared and paid dividends of $ 2.1 billion and $ 1.9 billion, respectively.

On April 23, 2024, the Company’s 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), payable on June 3, 2024, to all holders of record as of May 17, 2024.

Note 10—Earnings Per Share

The following table presents earnings per share for the three months ended December 31, 2023:

The following table presents earnings per share for the three months ended March 31, 2024:

Basic Earnings Per Share Diluted Earnings Per Share

4 unchanged sentences

Class B-1 common stock

892 245 $ 3.63 $ 891 245 $ 3.63

Class C common stock 85 9 $ 9.16 $ 85 9 $ 9.15

1 unchanged sentence

Net income $ 4,663

The following table presents earnings per share for the three months ended December 31, 2022:

The following table presents earnings per share for the six months ended March 31, 2024:

Basic Earnings Per Share Diluted Earnings Per Share

4 unchanged sentences

Class B-1 common stock

1,825 245 $ 7.44 $ 1,823 245 $ 7.43

Class C common stock 176 9 $ 18.73 $ 176 9 $ 18.71

1 unchanged sentence

Net income $ 9,553

(1) The weighted-average number of shares of as-converted class B common stock used in the income allocation was 390 million and 394 million for the three months ended December 31, 2023 and 2022, respectively.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 38 million and 39 million for the three months ended December 31, 2023 and 2022, respectively.

The weighted-average number of shares of preferred stock included within participating securities was 6 million and 13 million of as-converted series A preferred stock for the three months ended December 31, 2023 and 2022, respectively, 7 million of as-converted series B preferred stock for the three months ended December 31, 2023 and 2022 and 11 million of as-converted series C preferred stock for the three months ended December 31, 2023 and 2022.

The following table presents earnings per share for the three months ended March 31, 2023:

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 3,307 1,624 $ 2.04 $ 4,257 2,093 (3)

Class B-1 common stock

800 245 $ 3.26 $ 799 245 $ 3.25

Class C common stock 79 10 $ 8.15 $ 79 10 $ 8.14

Participating securities 71 Not presented Not presented $ 71 Not presented Not presented

Net income $ 4,257

The following table presents earnings per share for the six months ended March 31, 2023:

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 6,549 1,627 $ 4.03 $ 8,436 2,098 (3)

Class B-1 common stock

1,584 245 $ 6.45 $ 1,582 245 $ 6.44

Class C common stock 157 10 $ 16.10 $ 156 10 $ 16.09

Participating securities 146 Not presented Not presented $ 146 Not presented Not presented

Net income $ 8,436

(1) The weighted-average number of shares of as-converted class B-1 common stock used in the income allocation was 390 million for the three and six months ended March 31, 2024 and 393 million for the three and six months ended March 31, 2023.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 37 million and 38 million for the three and six months ended March 31, 2024, respectively, and 39 million for the three and six months ended March 31, 2023.

The weighted-average number of shares of preferred stock included within participating securities was 6 million of as-converted series A preferred stock for the three and six months ended March 31, 2024 and 10 million and 11 million of as-converted series A preferred stock for the three and six months ended March 31, 2023, respectively, 7 million of as-converted series B preferred stock for the three and six months ended March 31, 2024 and 2023, and 11 million of as-converted series C preferred stock for the three and six months ended March 31, 2024 and 2023.

(2) Figures in the table may not recalculate exactly due to rounding.

1 unchanged sentence

(3) Weighted-average diluted shares outstanding are calculated on an as-converted basis and include incremental common stock equivalents, as calculated under the treasury stock method.

The common stock equivalents are not material for the three months ended December 31, 2023 and 2022.

The common stock equivalents are not material for the three and six months ended March 31, 2024 and 2023.

Note 11—Share-based Compensation

The following table presents the equity awards granted to employees and non-employee directors under the amended and restated 2007 Equity Incentive Compensation Plan (EIP) during the three months ended December 31, 2023:

Granted Weighted-Average Grant Date Fair Value Weighted-Average Exercise Price

4 unchanged sentences

(1) Represents the maximum number of performance-based shares which could be earned.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

For the three months ended December 31, 2023 and 2022, the Company recorded share-based compensation cost related to the EIP of $ 200 million and $ 170 million, respectively.

For the three months ended March 31, 2024 and 2023, the Company recorded share-based compensation cost related to the EIP of $ 235 million and $ 214 million, respectively.

For the six months ended March 31, 2024 and 2023, the Company recorded share-based compensation cost related to the EIP of $ 435 million and $ 384 million, respectively.

Note 12—Income Taxes

For the three months ended December 31, 2023 and 2022, the effective income tax rates were 19 % and 16 %, respectively.

The difference in the effective tax rates is primarily due to a $ 142 million tax benefit recognized during the three months ended December 31, 2022 due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

During the three months ended December 31, 2023, the Company’s gross unrecognized tax benefits increased by $ 113 million.

The Company’s net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate, increased by $ 29 million.

The change in unrecognized tax benefits is related to various tax positions across several jurisdictions.

In January 2024, a resolution was reached regarding India tax assessments for years falling within the period from 2010 to 2019.

As a result, the Company filed to withdraw appeals to the appellate authorities for these years.

For the three and six months ended March 31, 2024, the effective income tax rates were 15 % and 17 %, respectively, and for the three and six months ended March 31, 2023, the effective income tax rates were 19 % and 18 %, respectively.

The difference in the effective tax rates is primarily due to the following:

• During the three and six months ended March 31, 2024, a $ 184 million tax benefit as a result of the conclusion of an audit;

• During the six months ended March 31, 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.

During the three and six months ended March 31, 2024, the Company’s gross unrecognized tax benefits decreased by $ 117 million and $ 4 million, respectively, and the Company’s net unrecognized tax benefits decreased by $ 159 million and $ 130 million, respectively.

The change in unrecognized tax benefits is primarily due to the recognition of previously unrecognized tax benefits as a result of the conclusion of an audit, partially offset by an increase in gross timing differences as well as various tax positions across several jurisdictions.

During the three and six months ended March 31, 2024, the Company’s accrued interest related to uncertain tax positions decreased by $ 72 million and $ 51 million, respectively.

During the three and six months ended March 31, 2023, there were no significant changes in accrued interest related to uncertain tax positions.

In January 2024, a resolution was reached regarding India tax assessments for taxable years falling within the period from 2010 to 2019.

As a result, the Company withdrew its appeals to the appellate authorities for these years.

Effective through September 30, 2028, the Company’s operating hub in the Asia Pacific region is subject to a tax incentive in Singapore which is conditional upon meeting certain requirements.

2 unchanged sentences

The timing and outcome of the final resolutions of the various ongoing income tax examinations and refund claims are uncertain.

However, it is reasonably possible that the Company’s net unrecognized tax benefits could decrease by approximately $ 400 million in the next 12 months.

It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next 12 months.

Note 13—Legal Matters

7 unchanged sentences

The following table summarizes the activity related to accrued litigation:

Three Months Ended

Six Months Ended

(in millions)

9 unchanged sentences

Visa Inc., Visa U.S.A.

and Visa International are parties to certain legal proceedings that are covered by the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

and Visa International are parties to certain legal proceedings that are covered by the U.S.

retrospective responsibility plan, which the Company refers to as the U.S.

10 unchanged sentences

covered litigation:

Three Months Ended

Six Months Ended

(in millions)

6 unchanged sentences

$ 1,546 $ 1,581

During the three and six months ended March 31, 2024, the Company recorded an additional accrual pursuant to the agreement to resolve the Injunctive Relief Class claims in the interchange multidistrict litigation.

The accrual balance is consistent with the Company’s best estimate of its share of a probable and reasonably estimable loss with respect to the U.S.

covered litigation.

While this estimate is consistent with the Company’s view of the current status of the litigation, the probable and reasonably estimable loss or range of such loss could materially vary based on developments in the litigation.

The Company will continue to consider and reevaluate this estimate in light of the substantial uncertainties with respect to the litigation.

The Company is unable to estimate a potential loss or range of loss, if any, at trial if negotiated resolutions cannot be reached.

Accrual Summary—VE Territory Covered Litigation

7 unchanged sentences

The following table summarizes the accrual activity related to VE territory covered litigation:

Three Months Ended

Six Months Ended

(in millions)

8 unchanged sentences

American Express were granted in part and denied in part.

On February 22, 2024, the district court denied defendants' motions for summary judgment based on the post-IPO conspiracy claims.

On February 26, 2024, plaintiffs in the action led by Old Jericho Enterprise, Inc.

served a motion for partial summary judgment.

On March 11, 2024, the district court denied the Injunctive Relief Class plaintiffs’ motion for partial summary judgment.

On April 2, 2024, the district court granted defendants’ motion for summary judgment on Injunctive Relief Class plaintiffs’ monopolization claims.

On March 25, 2024, Visa and Mastercard entered into an agreement to resolve the Injunctive Relief Class claims (the “Settlement Agreement”), subject to court approval.

The Settlement Agreement includes, among other terms, (i) a release from class members for claims for declaratory, injunctive or equitable relief arising out of conduct alleged by the Injunctive Relief Class in the litigation that have accrued or accrue in the future during the term of the Settlement Agreement;

(ii) provisions requiring reductions and caps on U.S.

credit interchange rates;

and (iii) provisions requiring modifications to the Company’s rules in the U.S.

that, among other things, streamline requirements for merchants who wish to impose a surcharge on credit transactions.

On March 26, 2024, the Injunctive Relief Class plaintiffs filed a motion for preliminary approval of the settlement.

Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions

1 unchanged sentence

On November 1, 2023, defendants served a motion to enforce the Amended Settlement Agreement, or in the alternative for summary judgment, regarding claims in the actions brought by certain plaintiffs in their capacity as payment facilitators.

On December 4, 2023, plaintiffs in certain of the individual merchant actions served a motion

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

for partial summary judgment or a joinder in partial summary judgment motions.

On December 4, 2023, plaintiffs in certain of the individual merchant actions served a motion for partial summary judgment or a joinder in partial summary judgment motions.

On January 8, 2024, defendants’ motions for summary judgment under Ohio v.

American Express were granted in part and denied in part.

On February 22, 2024, the district court denied defendants' motions for summary judgment based on Illinois Brick standing and on the post-IPO conspiracy claims, and denied as moot certain plaintiffs’ motions for partial summary judgment.

On April 2, 2024, the district court granted in part and denied in part defendants’ motion for summary judgment on certain plaintiffs’ monopolization claims.

Consumer Interchange Litigation

On February 9, 2024, defendants filed a motion to dismiss the complaint and to compel arbitration.

VE Territory Covered Litigation

3 unchanged sentences

As of the filing date, Visa has settled the claims asserted by over 475 Merchants, and there are approximately 600 Merchants with outstanding claims.

In addition, over 30 additional Merchants have threatened to commence similar proceedings.

In addition, 30 additional Merchants have threatened to commence similar proceedings.

Standstill agreements have been entered into with respect to some of those threatened Merchant claims, several of which have been settled.

From February 14 to March 28, 2024, a trial occurred to consider whether certain interchange rates restrict competition in violation of UK antitrust law.

In the class action claims filed before the UK Competition Appeal Tribunal, a class certification rehearing took place in April 2024.

Other Litigation

4 unchanged sentences

The complaint seeks to recover damages and to enjoin the enforcement of Visa’s default interchange and surcharge rules, among other things.

On March 5, 2024, MiCamp Solutions filed an amended complaint on behalf of the same purported class and subclass, and containing similar allegations as in the original complaint, and on March 19, 2024, Visa filed a motion to dismiss that amended complaint.

Mirage Wine + Spirit’s Inc.

5 unchanged sentences

On January 5, 2024, Visa requested transfer of the action to the U.S.

District Court for the Eastern District of New York for coordinated or consolidated pretrial proceedings with the Interchange Multidistrict Litigation.

District Court for the Eastern District of New York for coordinated or consolidated pretrial proceedings with the MDL.

On February 2, 2024, the Judicial Panel on Multidistrict Litigation entered a conditional transfer order conditionally transferring the case to the MDL.

On February 26, 2024, plaintiffs filed a motion to vacate the conditional transfer order.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements