VISA INC. 10-Q

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This management’s discussion and analysis provides a review of the results of operations, financial condition and liquidity and capital resources of Visa Inc. and its subsidiaries (Visa, we, us, our or the Company) on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1—Financial Statements of this report. Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our future financial position, results of operations and cash flows; prospects, developments, strategies and growth of our business; anticipated expansion of our products in certain countries; industry developments; anticipated timing and benefits of our acquisitions; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our unaudited consolidated financial statements. Forward-looking statements generally are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “could,” “should,” “will,” “continue” and other similar expressions. All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2023, and any subsequent reports on Forms 10-Q and 8-K. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. 28 Table of Contents Overview Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global set of consumers, merchants, financial institutions and government entities through innovative technologies. We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet, our proprietary advanced transaction processing network. We offer products, solutions and services that facilitate secure, reliable and efficient money movement for all participants in the ecosystem. Financial overview. A summary of our as-reported U.S. GAAP and non-GAAP operating results is as follows: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 % Change (1) 2024 2023 % Change (1) (in millions, except percentages and per share data) Net revenue $ 8,900 $ 8,123 10 % $ 26,309 $ 24,044 9 % Operating expenses $ 2,962 $ 3,099 (4 %) $ 9,063 $ 8,594 5 % Net income $ 4,872 $ 4,156 17 % $ 14,425 $ 12,592 15 % Diluted earnings per share $ 2.40 $ 2.00 20 % $ 7.08 $ 6.02 18 % Non-GAAP operating expenses (2) $ 2,927 $ 2,578 14 % $ 8,417 $ 7,598 11 % Non-GAAP net income (2) $ 4,909 $ 4,499 9 % $ 14,964 $ 13,464 11 % Non-GAAP diluted earnings per share (2) $ 2.42 $ 2.16 12 % $ 7.34 $ 6.44 14 % (1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. (2) For a full reconciliation of our GAAP to non-GAAP financial results, see tables in Non-GAAP financial results below. Highlights for the first nine months of fiscal 2024. For the three and nine months ended June 30, 2024, net revenue increased 10% and 9% over the prior-year comparable periods, respectively, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives. During the three months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth. See Results of Operations—Net Revenue below for further discussion. For the three months ended June 30, 2024, GAAP operating expenses decreased 4% over the prior-year comparable period, primarily driven by lower litigation provision. For the nine months ended June 30, 2024, GAAP operating expenses increased 5% over the prior-year comparable period, primarily driven by higher personnel and general and administrative expenses, partially offset by lower litigation provision. See Results of Operations—Operating Expenses below for further discussion. During the three and nine months ended June 30, 2024, exchange rate movements did not have a material impact on our operating expenses growth. For the three and nine months ended June 30, 2024, non-GAAP operating expenses increased 14% and 11% over the prior-year comparable periods, respectively, primarily driven by higher general and administrative, personnel and marketing expenses. Class B-1 common stock exchange offer . In May 2024, we accepted 241 million shares of class B-1 common stock tendered in the exchange offer. In exchange, we issued approximately 120 million shares of class B-2 common stock and 48 million shares of class C common stock. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. Acquisition. On January 16, 2024, we acquired Pismo Holdings (Pismo), a global cloud-native issuer processing and core banking platform, for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements. 29 Table of Contents Interchange multidistrict litigation. During the nine months ended June 30, 2024, we recorded additional accruals of $140 million to address claims associated with the interchange multidistrict litigation. See Note 13—Legal Matters to our unaudited consolidated financial statements. Common stock repurchases. During the nine months ended June 30, 2024, we repurchased 42 million shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. Non-GAAP financial results. We use non-GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends. We consider non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance. • Gains and losses on equity investments. Gains and losses on equity investments include periodic non-cash fair value adjustments and gains and losses upon sale of an investment. These long-term investments are strategic in nature and are primarily private company investments. Gains and losses associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business. • Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of amortization of intangible assets such as technology, customer relationships and trade names acquired in connection with business combinations executed beginning in fiscal 2019. Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations. As such, we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance. • Acquisition-related costs. Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations. These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities. These costs also include retention equity and deferred compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination. We have excluded these amounts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business. • Litigation provision. Litigation provision includes significant accruals related to certain legal matters that are not covered by the U.S. retrospective responsibility plan or the Europe retrospective responsibility plan (uncovered legal matters) and additional accruals associated with the interchange multidistrict litigation which are covered by the U.S. retrospective responsibility plan (U.S. covered litigation). Litigation provision associated with these matters can vary significantly based on the facts and circumstances related to each matter and do not correlate to the underlying performance of our business. During the three and nine months ended June 30, 2024 and 2023, we have excluded these amounts to facilitate a comparison to our past operating performance. Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a downward adjustment to the rate at which shares of our class B-1 and class B-2 common stock ultimately convert into shares of class A common stock. During the three and nine months ended June 30, 2024, there were no conversion rate adjustments. During the three months ended June 30, 2023, basic and diluted earnings per class A common stock was unchanged and during the nine months ended June 30, 2023, basic and diluted earnings per class A common stock increased $0.01 and was unchanged, respectively, as a result of the downward adjustments of the class B-1 common stock conversion rate during the period. See Note 5—U.S. and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements. • Lease consolidation costs. During the nine months ended June 30, 2024, we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces. We have excluded these amounts as they do not reflect the underlying performance of our business. • Indirect taxes. During the three and nine months ended June 30, 2024, as a result of the resolution of an audit, we recognized a benefit within general and administrative expense related to the release of the 30 Table of Contents reserve previously recognized in fiscal 2021. This one-time benefit is not representative of our ongoing operations. • Charitable contribution. During the three and nine months ended June 30, 2024, we donated investment securities to the Visa Foundation and recognized a non-cash general and administrative expense. We have excluded this amount as it does not reflect the underlying performance of our business. Non-GAAP operating expenses, non-operating income (expense), income tax provision, effective income tax rate, net income and diluted earnings per share should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S. GAAP. The following tables reconcile our as-reported financial measures, calculated in accordance with U.S. GAAP, to our respective non-GAAP financial measures: Three Months Ended June 30, 2024 Operating Expenses Non-operating Income (Expense) Income Tax Provision (1) Effective Income Tax Rate (2) Net Income Diluted Earnings Per Share (2) (in millions, except percentages and per share data) As reported $ 2,962 $ 51 $ 1,117 18.6 % $ 4,872 $ 2.40 (Gains) losses on equity investments, net — 22 5 17 0.01 Amortization of acquired intangible assets (48) — 13 35 0.02 Acquisition-related costs (28) — 3 25 0.01 Litigation provision (10) — 2 8 — Indirect taxes 118 — (29) (89) (0.04) Charitable contribution (67) — 26 41 0.02 Non-GAAP $ 2,927 $ 73 $ 1,137 18.8 % $ 4,909 $ 2.42 Nine Months Ended June 30, 2024 Operating Expenses Non-operating Income (Expense) Income Tax Provision (1) Effective Income Tax Rate (2) Net Income Diluted Earnings Per Share (2) (in millions, except percentages and per share data) As reported $ 9,063 $ 298 $ 3,119 17.8 % $ 14,425 $ 7.08 (Gains) losses on equity investments, net — 48 11 37 0.02 Amortization of acquired intangible assets (131) — 32 99 0.05 Acquisition-related costs (75) — 5 70 0.03 Litigation provision (434) — 97 337 0.17 Lease consolidation costs (57) — 13 44 0.02 Indirect taxes 118 — (29) (89) (0.04) Charitable contribution (67) — 26 41 0.02 Non-GAAP $ 8,417 $ 346 $ 3,274 17.9 % $ 14,964 $ 7.34 31 Table of Contents Three Months Ended June 30, 2023 Operating Expenses Non-operating Income (Expense) Income Tax Provision (1) Effective Income Tax Rate (2) Net Income Diluted Earnings Per Share (2) (in millions, except percentages and per share data) As reported $ 3,099 $ 122 $ 990 19.2 % $ 4,156 $ 2.00 (Gains) losses on equity investments, net — (85) (18) (67) (0.03) Amortization of acquired intangible assets (41) — 9 32 0.02 Acquisition-related costs (24) — 1 23 0.01 Litigation provision (456) — 101 355 0.17 Non-GAAP $ 2,578 $ 37 $ 1,083 19.4 % $ 4,499 $ 2.16 Nine Months Ended June 30, 2023 Operating Expenses Non-operating Income (Expense) Income Tax Provision (1) Effective Income Tax Rate (2) Net Income Diluted Earnings Per Share (2) (in millions, except percentages and per share data) As reported $ 8,594 $ (49) $ 2,809 18.2 % $ 12,592 $ 6.02 (Gains) losses on equity investments, net — 111 25 86 0.04 Amortization of acquired intangible assets (130) — 28 102 0.05 Acquisition-related costs (69) — 5 64 0.03 Litigation provision (797) — 177 620 0.30 Non-GAAP $ 7,598 $ 62 $ 3,044 18.4 % $ 13,464 $ 6.44 (1) Determined by applying applicable tax rates. (2) Figures in the table may not recalculate exactly due to rounding. Effective income tax rate, diluted earnings per share and their respective totals are calculated based on unrounded numbers. 32 Table of Contents Payments volume and processed transactions. Payments volume is the primary driver for our service revenue, and the number of processed transactions is the primary driver for our data processing revenue. Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-badged volume. Nominal payments volume is denominated in U.S. dollars and is calculated each quarter by applying an established U.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions include payments and cash transactions, and represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks. The following table presents nominal payments and cash volume: U.S. International Visa Three Months Ended March 31, (1) Three Months Ended March 31, (1) Three Months Ended March 31, (1) 2024 2023 % Change (2) 2024 2023 % Change (2) 2024 2023 % Change (2) (in billions, except percentages) Nominal payments volume Consumer credit $ 564 $ 531 6 % $ 725 $ 697 4 % $ 1,289 $ 1,227 5 % Consumer debit (3) 744 701 6 % 738 659 12 % 1,482 1,360 9 % Commercial (4) 253 239 6 % 149 137 9 % 402 376 7 % Total nominal payments volume (2) $ 1,561 $ 1,471 6 % $ 1,611 $ 1,493 8 % $ 3,172 $ 2,963 7 % Cash volume (5) 148 148 — % 460 448 3 % 608 597 2 % Total nominal volume (2),(6) $ 1,709 $ 1,619 6 % $ 2,071 $ 1,941 7 % $ 3,780 $ 3,560 6 % U.S. International Visa Nine Months Ended March 31, (1),(2) Nine Months Ended March 31, (1),(2) Nine Months Ended March 31, (1),(2) 2024 2023 % Change 2024 2023 % Change 2024 2023 % Change (in billions, except percentages) Nominal payments volume Consumer credit $ 1,745 $ 1,650 6 % $ 2,217 $ 2,078 7 % $ 3,962 $ 3,728 6 % Consumer debit (3) 2,218 2,091 6 % 2,249 1,961 15 % 4,467 4,052 10 % Commercial (4) 771 731 6 % 457 405 13 % 1,228 1,136 8 % Total nominal payments volume $ 4,734 $ 4,472 6 % $ 4,923 $ 4,443 11 % $ 9,656 $ 8,915 8 % Cash volume (5) 453 455 (1 %) 1,419 1,365 4 % 1,871 1,820 3 % Total nominal volume (6) $ 5,187 $ 4,927 5 % $ 6,341 $ 5,809 9 % $ 11,528 $ 10,736 7 % 33 Table of Contents The following table presents the change in nominal and constant payments and cash volume: International Visa International Visa Three Months Ended March 31, 2024 vs. 2023 (1),(2) Three Months Ended March 31, 2024 vs. 2023 (1),(2) Nine Months Ended March 31, 2024 vs. 2023 (1),(2) Nine Months Ended March 31, 2024 vs. 2023 (1),(2) Nominal Constant (7) Nominal Constant (7) Nominal Constant (7) Nominal Constant (7) Payments volume growth Consumer credit growth 4 % 9 % 5 % 8 % 7 % 10 % 6 % 8 % Consumer debit growth (3) 12 % 13 % 9 % 9 % 15 % 13 % 10 % 9 % Commercial growth (4) 9 % 12 % 7 % 8 % 13 % 14 % 8 % 9 % Total payments volume growth 8 % 11 % 7 % 8 % 11 % 11 % 8 % 9 % Cash volume growth (5) 3 % 4 % 2 % 3 % 4 % 4 % 3 % 3 % Total volume growth 7 % 9 % 6 % 8 % 9 % 10 % 7 % 8 % (1) Service revenue in a given quarter is primarily assessed based on nominal payments volume in the prior quarter. Therefore, service revenue reported for the three and nine months ended June 30, 2024 and 2023, respectively, was based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2024 and 2023, respectively. On occasion, previously presented volume information may be updated. Prior period updates are not material. (2) Figures in the table may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers. (3) Includes consumer prepaid volume and Interlink volume. (4) Includes large, medium and small business credit and debit, as well as commercial prepaid volume. (5) Cash volume generally consists of cash access transactions, balance access transactions, balance transfers and convenience checks. (6) Total nominal volume is the sum of total nominal payments volume and cash volume. Total nominal volume is provided by our financial institution clients, subject to review by Visa. (7) Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S. dollar. The following table presents the number of processed transactions: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 % Change (1) 2024 (1) 2023 (1) % Change (1) (in millions, except percentages) Visa processed transactions 59,318 54,034 10 % 172,247 156,615 10 % (1) Figures in the table may not recalculate exactly due to rounding. Percentage change is calculated based on unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material. Results of Operations Net Revenue The following table presents our net revenue earned in the U.S. and internationally: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 % Change (1) 2024 2023 % Change (1) (in millions, except percentages) U.S. $ 3,621 $ 3,443 5 % $ 10,909 $ 10,550 3 % International 5,279 4,680 13 % 15,400 13,494 14 % Net revenue $ 8,900 $ 8,123 10 % $ 26,309 $ 24,044 9 % (1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. Net revenue increased over the three and nine-month prior-year comparable periods primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives. 34 Table of Contents Our net revenue is impacted by the overall strengthening or weakening of the U.S. dollar as payments volume and related revenue denominated in local currencies are converted to U.S. dollars. During the three months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth. The following table presents the components of our net revenue: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 % Change (1) 2024 2023 % Change (1) (in millions, except percentages) Service revenue $ 3,967 $ 3,668 8 % $ 11,915 $ 10,950 9 % Data processing revenue 4,489 4,105 9 % 13,104 11,751 12 % International transaction revenue 3,194 2,920 9 % 9,197 8,466 9 % Other revenue 780 597 31 % 2,228 1,735 28 % Client incentives (3,530) (3,167) 11 % (10,135) (8,858) 14 % Net revenue $ 8,900 $ 8,123 10 % $ 26,309 $ 24,044 9 % (1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. • Service revenue increased primarily due to 7% and 8% growth in nominal payments volume over the three and nine-month prior-year comparable periods, respectively. • Data processing revenue increased primarily due to 10% growth in processed transactions over the three and nine-month prior-year comparable periods. • International transaction revenue increased primarily due to growth in nominal cross-border volumes of 12% and 15% over the three and nine-month prior-year comparable periods, respectively, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies. • Other revenue increased primarily due to growth in consulting and marketing services and select pricing modifications over the three and nine-month prior-year comparable periods. • Client incentives increased primarily due to growth in payments volume over the three and nine-month prior-year comparable periods. The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts. Operating Expenses The following table presents the components of our total operating expenses: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 % Change (1) 2024 2023 % Change (1) (in millions, except percentages) Personnel $ 1,573 $ 1,481 6 % $ 4,655 $ 4,333 7 % Marketing 378 297 27 % 1,009 938 8 % Network and processing 200 182 10 % 570 539 6 % Professional fees 152 133 15 % 443 372 19 % Depreciation and amortization 264 235 12 % 760 696 9 % General and administrative 382 314 22 % 1,174 918 28 % Litigation provision 13 457 (97 %) 452 798 (43 %) Total operating expenses $ 2,962 $ 3,099 (4 %) $ 9,063 $ 8,594 5 % (1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. 35 Table of Contents • Personnel expenses increased over the three and nine-month prior-year comparable periods primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions. • Marketing expenses increased over the three and nine-month prior-year comparable periods primarily due to higher spend including for client marketing and the Olympic and Paralympic Games Paris 2024. The increase during the nine months ended June 30, 2024 was partially offset by spend related to the FIFA World Cup TM in the prior year and absent in the current year. • Professional fees increased over the three and nine-month prior-year comparable periods primarily due to higher consulting fees. The increase during the nine months ended June 30, 2024 also included higher advisory fees. • Depreciation and amortization increased over the three and nine-month prior-year comparable periods primarily due to additional depreciation and amortization from our on-going investments and acquisitions. • General and administrative expenses increased over the three and nine-month prior-year comparable periods primarily due to a charitable contribution to the Visa Foundation in the current year, higher usage of travel related card benefits, higher indirect taxes and higher unfavorable foreign currency fluctuations, partially offset by the release of the reserve on indirect taxes previously recognized in fiscal 2021. The increase during the nine months ended June 30, 2024 also included lease consolidation costs in the current year. • Litigation provision decreased over the three and nine-month prior-year comparable periods primarily due to lower accruals related to the U.S. covered litigation. The decrease during the nine months ended June 30, 2024 was partially offset by accruals related to uncovered litigation in the current year. See Note 13—Legal Matters to our unaudited consolidated financial statements. Non-operating Income (Expense) The following table presents the components of our non-operating income (expense): Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 % Change (1) 2024 2023 % Change (1) (in millions, except percentages) Interest expense $ (196) $ (182) 9 % $ (465) $ (461) 1 % Investment income (expense) and other 247 304 (18 %) 763 412 86 % Total non-operating income (expense) $ 51 $ 122 (58 %) $ 298 $ (49) 702 % (1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. • Interest expense increased during the three months ended June 30, 2024 primarily due to higher losses from derivative instruments and higher interest expense related to taxes. Interest expense increased during the nine months ended June 30, 2024 primarily due to higher losses from derivative instruments, partially offset by higher interest benefit related to taxes and lower interest expense related to lower outstanding debt. • Investment income (expense) and other decreased during the three months ended June 30, 2024, primarily due to losses on our investments, partially offset by higher interest income on our cash and investments. Investment income (expense) and other increased during the nine months ended June 30, 2024, primarily due to higher interest income on our cash and investments and lower losses on our investments. 36 Table of Contents Effective Income Tax Rate The following table presents our effective income tax rates: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 Effective income tax rate 19 % 19 % 18 % 18 % The effective income tax rates differ primarily due to the following: • During the nine months ended June 30, 2024, a $184 million tax benefit as a result of the conclusion of an audit; and • During the nine months ended June 30, 2023, a $142 million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination. Liquidity and Capital Resources Cash Flow Data The following table summarizes our cash flow activity for the periods presented: Nine Months Ended June 30, 2024 2023 (in millions) Total cash provided by (used in): Operating activities $ 13,286 $ 13,828 Investing activities $ (2,510) $ (818) Financing activities $ (13,564) $ (13,192) Operating activities. Cash provided by operating activities for the nine months ended June 30, 2024 was lower than the prior-year comparable period primarily due to higher incentive payments and higher cash paid for taxes due to the timing of payments, partially offset by continued growth in our underlying business. Investing activities. Cash used in investing activities for the nine months ended June 30, 2024 was higher than the prior-year comparable period primarily due to cash paid for acquisitions, net of cash acquired, the absence of cash received from the settlement of net investment hedge derivative instruments and higher purchases, net of maturities and sales, of investment securities. See Note 2—Acquisitions to our unaudited consolidated financial statements . Financing activities. Cash used in financing activities for the nine months ended June 30, 2024 was higher than the prior-year comparable period primarily due to higher share repurchases and higher dividends paid, partially offset by the absence of the principal debt payment upon maturity of our December 2022 senior notes. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements . Sources of Liquidity Our primary sources of liquidity are cash on hand, cash flow from our operations, our investment portfolio and access to various equity and borrowing arrangements. Funds from operations are maintained in cash and cash equivalents and short-term or long-term investment securities based upon our funding requirements, access to liquidity from these holdings and the returns that these holdings provide. Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months. We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our operating performance, current economic and capital market conditions and other relevant circumstances. 37 Table of Contents Uses of Liquidity There has been no significant change to our primary uses of liquidity since September 30, 2023, except as discussed below. Common stock repurchases. During the nine months ended June 30, 2024, we repurchased shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. Dividends . During the nine months ended June 30, 2024, we declared and paid $3.2 billion in dividends to holders of our common and preferred stock. On July 23, 2024, our board declared a quarterly cash dividend of $0.52 per share of class A common stock (determined in the case of all other outstanding common and preferred stock on an as-converted basis). See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements. We expect to continue paying quarterly dividends in cash, subject to approval by the board. Acquisition . On January 16, 2024, we acquired Pismo for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements. Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense s. This standard also enhances interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment. This ASU is effective for our annual periods beginning October 1, 2024, and interim periods beginning October 1, 2025, and requires retrospective application to all prior periods presented. We are currently evaluating the impact of the ASU on our disclosures. In December 2023, the FASB issued ASU 2023-09, which provides improvements to income tax disclosures. This standard requires disaggregated information related to the effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for our annual periods beginning October 1, 2025, and requires prospective application with the option to apply the standard retrospectively. We are currently evaluating the impact of the ASU on our disclosures. ITEM 3. Quantitative and Qualitative Disclosures about Market Risk There have been no significant changes to our market risks since September 30, 2023.