What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-11-13 compared with 2023-11-15 · 151 added, 124 removed, 375 unchanged (42% of the section changed)

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This section of the report generally discusses fiscal 2024 compared to fiscal 2023.

Discussions of fiscal 2022 compared to 2021 that are not included in this report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our Annual Report on Form 10-K for the year ended September 30, 2022, filed with the United States Securities and Exchange Commission.

Discussions of fiscal 2023 compared to fiscal 2022 that are not included in this report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our Annual Report on Form 10-K for the year ended September 30, 2023, filed with the U.S.

Securities and Exchange Commission.

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.

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(in millions, except percentages and per share data)

Net revenues $ 32,653 $ 29,310 $ 24,105 11 % 22 %

Net revenue $ 35,926 $ 32,653 $ 29,310 10 % 11 %

Operating expenses $ 12,331 $ 11,653 $ 10,497 6 % 11 %

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

Disruption in the Banking Sector.

During fiscal 2023, certain U.S.

banks failed, which caused volatility in the global financial markets.

These events did not have an impact on our operating results.

We continuously monitor and manage balance sheet and operational risks from clients in our portfolio, including their settlement obligations.

Russia & Ukraine.

During fiscal 2022, economic sanctions were imposed on Russia by the U.S., European Union, United Kingdom and other jurisdictions and authorities, impacting Visa and its clients.

In March 2022, we suspended our operations in Russia and as a result, are no longer generating revenue from domestic and cross-border activities related to Russia.

For fiscal 2022 and 2021, total net revenues from Russia, including revenues driven by domestic as well as cross-border activities, were approximately 2% and 4% of our consolidated net revenues, respectively.

The continuing effects of the liquidity issues at certain financial institutions and the war in Ukraine are difficult to predict due to numerous uncertainties identified in Part I, Item 1A of this report.

We will continue to evaluate the nature and extent of the impact to our business.

Highlights for fiscal 2024 .

Net revenues increased 11% over the prior year, primarily due to the year-over-year growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by

higher client incentives.

Exchange rate movements lowered our net revenues growth by approximately one-and-a-half percentage points.

GAAP operating expenses increased 11% over the prior year, primarily driven by higher expenses related to personnel.

Net revenue increased 10% over the prior year, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

Exchange rate movements did not have a material impact on net revenue growth.

GAAP operating expenses increased 6% over the prior year, primarily driven by higher expenses related to personnel, general and administrative and marketing expenses, partially offset by lower litigation provision.

See Results of Operations—Operating Expenses below for further discussion.

Non-GAAP operating expenses increased 12% over the prior year, primarily driven by higher expenses related to personnel.

Pending acquisition.

In June 2023, we entered into a definitive agreement to acquire Pismo Holdings (Pismo), a cloud-native issuer processing and core banking platform with operations in Latin America, Asia Pacific and Europe, for $1.0 billion in cash.

This acquisition is subject to customary closing conditions, including applicable regulatory reviews and approvals.

Non-GAAP operating expenses increased 11% over the prior year, primarily driven by higher expenses related to personnel, general and administrative and marketing expenses.

Interchange multidistrict litigation.

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litigation escrow account.

The additional accruals related to the interchange multidistrict litigation could be higher or lower than deposits made into the U.S.

litigation escrow account.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans and Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report .

Potential exchange offer program.

In September 2023, we announced that we are engaging with our common stockholders on the subject of potential amendments to our certificate of incorporation that would authorize Visa to conduct an exchange offer program that would have the effect of releasing transfer restrictions on portions of our class B common stock prior to the final resolution of the U.S.

covered litigation.

See our current report on Form 8-K filed with the SEC on September 13, 2023.

Acquisitions.

In September 2024, we entered into a definitive agreement to acquire Featurespace Limited (Featurespace), a developer of real-time artificial intelligence payments protection technology that prevents and mitigates payments fraud and financial crime risks.

This acquisition is subject to customary closing conditions, including applicable regulatory approvals.

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

See Note 2—Acquisitions to our consolidated financial statements included in Item 8 of this report.

Release of preferred stock.

In July 2024, we released $2.7 billion of the as-converted value from our series B and C preferred stock and issued 99,264 shares of series A preferred stock in connection with the eighth anniversary of the Visa Europe acquisition.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans and Note 15—Stockholders’ Equity to our consolidated financial statements included in Item 8 of this report.

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 15—Stockholders’ Equity to our consolidated financial statements included in Item 8 of this report.

Visa may, but is under no obligation to, conduct a successive exchange offer if (i) one year has passed since the initial exchange offer for the next preceding class of class B common stock;

and (ii) if the estimated interchange reimbursement fees at issue in unresolved claims for damages in the U.S.

covered litigation have been reduced by 50% or more since the consummation of the prior exchange offer (or in the case of the first successive exchange offer, since October 1, 2023), as determined by Visa.

The estimated interchange reimbursement fees at issue in unresolved claims for damages in the U.S.

covered litigation were $49.6 billion as of October 1, 2023 and as of October 1, 2024, were approximately $48.4 billion (1) .

Common stock repurchases.

In October 2022, our board of directors authorized a $12.0 billion share repurchase program.

During fiscal 2024, we repurchased 64 million shares of our class A common stock in the open market for $17.0 billion.

As of September 30, 2024, our share repurchase program had remaining authorized funds of $13.1 billion.

In October 2023, our board of directors authorized a new $25.0 billion share repurchase program, providing multi-year flexibility.

See Note 15—Stockholders’ Equity to our consolidated financial statements included in Item 8 of this report.

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• Amortization of acquired intangible assets.

Amortization of acquired intangible assets consists of amortization of intangible assets such as developed technology, customer relationships and brands acquired in connection with business combinations executed beginning in fiscal 2019.

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.

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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 equity 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.

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

(1) These figures are estimated and approximated.

These estimates do not include claims in certain purported indirect purchaser class actions or any claims of merchants serviced by opt-outs that are payment processors and facilitators.

The interchange at issue for unresolved claims will continue to increase.

Covered Litigation in Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report for more information on the Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions.

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.

We recorded additional accruals to address claims associated with the interchange multidistrict litigation.

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 fiscal 2024, 2023 and 2022, 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 common stock ultimately convert into shares of class A common stock.

For fiscal 2023 and 2022, basic earnings per class A common stock was unchanged and increased $0.01, respectively, as a result of the downward adjustments of the class B common stock conversion rate during the fiscal years.

For fiscal 2023 and 2022, diluted earnings per class A common stock remained unchanged.

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 fiscal 2024, basic and diluted earnings per class A common stock was unchanged, as a result of the downward adjustments of the class B-1 and B-2 common stock conversion rates during the period.

During fiscal 2023 and fiscal 2022, basic earnings per class A common stock was unchanged and increased $0.01, respectively, and diluted earnings per class A common stock was unchanged in both fiscal years, as a result of the downward adjustments of the class B-1 common stock conversion rate during the periods.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans and Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report.

• Lease consolidation costs.

During fiscal 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 fiscal 2024, as a result of the resolution of an audit, we recognized a benefit within general and administrative expense related to the release of the reserve previously recognized in fiscal 2021.

This one-time benefit is not representative of our ongoing operations.

• Charitable contribution.

During fiscal 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.

• Russia-Ukraine charges.

We recorded a loss within general and administrative expense from the deconsolidation of our Russian subsidiary and also incurred charges in personnel expense as a result of steps taken to support our employees in Russia and Ukraine.

During fiscal 2022, we recorded a loss within general and administrative expense from the deconsolidation of our Russian subsidiary and also incurred charges in personnel expense as a result of steps taken to support our employees in Russia and Ukraine.

We have excluded these amounts as they are one-time charges and do not reflect the underlying performance of our business.

• Remeasurement of deferred tax balances.

In connection with the UK enacted legislation on June 10, 2021 that increased the tax rate from 19% to 25%, effective April 1, 2023, we remeasured our UK deferred tax liabilities, resulting in the recognition of a non-recurring, non-cash income tax expense.

• Indirect taxes.

W e recognized a one-time charge within general and administrative expense to record our estimate of probable additional indirect taxes, related to prior periods, for which we could be liable as a result of certain changes in applicable law.

This one-time charge is not representative of our ongoing operations.

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.

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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 $ 11,609 $ 415 $ 4,343 17.6 % $ 20,389 $ 10.05

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Litigation provision (906) — 201 705 0.34

Russia-Ukraine charges (60) — 4 56 0.03

Non-GAAP $ 10,481 $ 141 $ 4,033 18.1 % $ 18,280 $ 8.77

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Acquisition-related costs (69) — 9 60 0.03

Remeasurement of deferred tax balances — — (1,007) 1,007 0.46

Indirect taxes (152) — 40 112 0.05

Litigation provision (861) — 191 670 0.31

Russia-Ukraine charges (60) — 4 56 0.03

Non-GAAP $ 9,387 $ (413) $ 3,476 17.8 % $ 16,034 $ 7.50

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Payments volume and processed transactions.

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

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.

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dollar/foreign currency exchange rate for each local currency in which our volumes are reported.

Processed transactions represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks.

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 tables present nominal payments and cash volume:

International Visa Inc.

International Visa

Twelve Months

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$ 6,991 $ 6,654 5 % $ 8,489 $ 7,886 8 % $ 15,480 $ 14,541 6 %

International Visa Inc.

International Visa

Twelve Months

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

International Visa Inc.

International Visa

Twelve Months Ended

2023 vs 2022 (1),(2)

Twelve Months Ended

2022 vs 2021 (1),(2)

Twelve Months Ended

2023 vs 2022 (1),(2)

Twelve Months Ended

2022 vs 2021 (1),(2)

Nominal Constant (7)

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Total volume growth 8 % 9 % — % 6 % 6 % 7 % 4 % 7 %

(1) Service revenues in a given quarter are primarily assessed based on nominal payments volume in the prior quarter.

Therefore, service revenues reported for the twelve months ended September 30, 2023, 2022 and 2021, were based on nominal payments volume reported by our financial institution clients for the twelve months ended June 30, 2023, 2022 and 2021, respectively.

(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 twelve months ended September 30, 2024, 2023 and 2022, was based on nominal payments volume reported by our financial institution clients for the twelve months ended June 30, 2024, 2023 and 2022, respectively.

On occasion, previously presented volume information may be updated.

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Results of Operations

Our net revenues are primarily generated from payments volume on Visa products for purchased goods and services, as well as the number of transactions processed on our network.

See Note 1—Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of this report for further discussion on the components of our net revenues.

The following table presents our net revenues earned in the U.S.

Our net revenue is primarily generated from payments volume on Visa products for purchased goods and services, as well as the number of transactions processed on our network.

See Note 1—Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of this report for further discussion on the components of our net revenue.

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

and internationally:

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International 21,146 18,515 16,459 14 % 12 %

Net revenues $ 32,653 $ 29,310 $ 24,105 11 % 22 %

Net revenue $ 35,926 $ 32,653 $ 29,310 10 % 11 %

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

Percentage changes are calculated based on unrounded numbers.

Net revenues increased in fiscal 2023 primarily due to the year-over-year growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

Our net revenues are impacted by the overall strengthening or weakening of the U.S.

dollar as payments volume and related revenues denominated in local currencies are converted to U.S.

In fiscal 2023, exchange rate movements lowered our net revenues growth by approximately one-and-a-half percentage points.

The following table presents the components of our net revenues:

Net revenue increased in fiscal 2024 over the prior year primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

Our net revenue is impacted by the overall strengthening or weakening of the U.S.

dollar as payments volume and related revenue denominated in local currencies are converted to U.S.

In fiscal 2024, exchange rate movements did not have a material impact on net revenue growth.

The following table presents the components of our net revenue:

For the Years Ended

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(in millions, except percentages)

Service revenues $ 14,826 $ 13,361 $ 11,475 11 % 16 %

Data processing revenues 16,007 14,438 12,792 11 % 13 %

International transaction revenues 11,638 9,815 6,530 19 % 50 %

Other revenues 2,479 1,991 1,675 24 % 19 %

Service revenue

$ 16,114 $ 14,826 $ 13,361 9 % 11 %

Data processing revenue

17,714 16,007 14,438 11 % 11 %

International transaction revenue

12,665 11,638 9,815 9 % 19 %

Other revenue

3,197 2,479 1,991 29 % 24 %

Client incentives (13,764) (12,297) (10,295) 12 % 19 %

Net revenues $ 32,653 $ 29,310 $ 24,105 11 % 22 %

Net revenue $ 35,926 $ 32,653 $ 29,310 10 % 11 %

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

Percentage changes are calculated based on unrounded numbers.

• Service revenues increased primarily due to 5% growth in nominal payments volume and due to business mix.

Service revenues increased over the prior-year comparable fiscal year despite the impact of our suspension of operations in Russia.

• Data processing revenues increased primarily due to 10% growth in processed transactions, select pricing modifications and growth in value added services.

Data processing revenues increased over the prior-year comparable fiscal year despite the impact of our suspension of operations in Russia.

• International transaction revenues increased primarily due to growth in nominal cross-border volumes of 23%, excluding transactions within Europe, and select pricing modifications, partially offset by business mix and lower volatility of a broad range of currencies.

• Other revenues increased primarily due to growth in marketing and consulting services and select pricing modifications.

• Client incentives increased primarily due to growth in payments volume during fiscal 2023.

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.

• Service revenue increased in fiscal 2024 over the prior year primarily due to 7% growth in nominal payments volume.

• Data processing revenue increased in fiscal 2024 over the prior year primarily due to 10% growth in processed transactions.

• International transaction revenue increased in fiscal 2024 over the prior year primarily due to growth in nominal cross-border volume of 14%, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.

• Other revenue increased in fiscal 2024 over the prior year primarily due to growth in marketing and consulting services and select pricing modifications.

• Client incentives increased in fiscal 2024 over the prior year primarily due to growth in payments volume.

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

Our operating expenses consist of the following:

• Personnel expenses include salaries, employee benefits, incentive compensation, share-based compensation and contractor expenses.

• Personnel expenses include salaries, employee benefits, incentive compensation and share-based compensation.

• Marketing expenses include expenses associated with advertising and marketing campaigns, sponsorships and other related promotions of the Visa brand and client marketing.

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General and administrative 1,598 1,330 1,194 20 % 11 %

Litigation provision 927 868 3 7 % NM

Litigation provision 462 927 868 (50 %) 7 %

Total operating expenses $ 12,331 $ 11,653 $ 10,497 6 % 11 %

$ 11,653 $ 10,497 $ 8,301 11 % 26 %

NM - Not meaningful

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

Percentage changes are calculated based on unrounded numbers.

(2) Operating expenses include significant items that we do not believe are indicative of our operating performance.

See Overview within this Item 7.

• Personnel expenses increased primarily due to higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.

• Depreciation and amortization expenses increased primarily due to additional depreciation and amortization from our on-going investments and acquisitions.

• General and administrative expenses increased due to unfavorable foreign currency fluctuations, higher usage of travel related card benefits and travel expenses, partially offset by the absence of expenses as a result of the suspension of our operations in Russia.

• Litigation provision increased primarily due to higher accruals related to the U.S.

covered litigation.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans and Note 20—Legal Matters included in Item 8 of this report.

• Personnel expenses increased in fiscal 2024 over the prior year primarily due to higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.

• Marketing increased in fiscal 2024 over the prior year due to higher spending in various campaigns, including for client marketing and the Olympic and Paralympic Games Paris 2024.

• Professional Fees increased in fiscal 2024 over the prior year primarily due to higher consulting and advisory fees.

• Depreciation and amortization expenses increased in fiscal 2024 over the prior year primarily due to additional depreciation and amortization from our on-going investments and acquisitions.

• General and administrative expenses increased in fiscal 2024 over the prior year due to higher usage of travel related card benefits, a charitable contribution to the Visa Foundation and lease consolidation costs in the current year, 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.

• Litigation provision decreased in fiscal 2024 over the prior year primarily due to lower accruals related to the U.S.

covered litigation, partially offset by higher accruals related to uncovered litigation.

See Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report.

Non-operating Income (Expense)

Non-operating income (expense) primarily includes interest expense related to borrowings, gains and losses on investments and derivative instruments, interest expense from tax liabilities, as well as the non-service components of net periodic pension income and expense.

Non-operating income (expense) primarily includes interest expense related to borrowings, gains and losses on investments and derivative instruments as well as interest expense related to taxes.

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

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Percentage changes are calculated based on unrounded numbers.

• Interest expense increased primarily due to losses from derivative instruments, partially offset by lower interest related to indirect taxes and lower outstanding debt.

See Note 10—Debt and Note 13—Derivative and Hedging Instruments to our consolidated financial statements included in Item 8 of this report.

• Investment income (expense) and other increased primarily due to higher interest income on our cash and investments and lower losses on our investments.

• Interest expense was approximately flat in fiscal 2024 over the prior year primarily due to higher interest benefit related to taxes and lower interest expense related to lower outstanding debt, offset by higher losses from derivative instruments.

See Note 13—Derivative and Hedging Instruments to our consolidated financial statements included in Item 8 of this report.

• Investment income (expense) and other increased in fiscal 2024 over the prior year primarily due to higher interest income on our cash and investments and lower losses on our equity investments.

See Note 6—Fair Value Measurements and Investments to our consolidated financial statements included in Item 8 of this report.

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Effective income tax rate 17 % 18 % 18 %

The effective income tax rates in fiscal 2023 and fiscal 2022 were 18% including the following:

• during fiscal 2023, a $142 million tax benefit related to prior years due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination;

• during fiscal 2022, a $176 million tax benefit related to prior years due to a decrease in the state apportionment ratio as a result of a tax position taken related to a ruling.

The effective income tax rate in fiscal 2024 differs from the effective tax rate in fiscal 2023 primarily due to a tax position taken across jurisdictions, as well as the following:

• during fiscal 2024, a $223 million tax benefit as a result of the conclusion of audits;

• during fiscal 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 fiscal 2024, the Organization for Economic Cooperation and Development (OECD) published administrative guidance around the implementation of a 15% global minimum tax (Pillar Two).

Various OECD member countries have either enacted or are in the process of enacting Pillar Two legislation, which will apply to Visa beginning in fiscal 2025.

While we do not expect a material tax impact in fiscal 2025, we are monitoring developments and evaluating the potential impact of Pillar Two on future years.

Liquidity and Capital Resources

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Operating activiti es.

Cash provided by operating activities in fiscal 2023 was higher than the prior fiscal year primarily due to growth in our underlying business, partially offset by higher incentive payments.

Cash provided by operating activities in fiscal 2024 was lower than the prior fiscal year 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 in fiscal 2023 was lower than the prior fiscal year primarily due to the absence of cash paid for acquisitions, cash received from the settlement of net investment hedge derivative instruments in the current year and lower purchases of investment securities, partially offset by lower sales and maturities of investment securities.

Cash used in investing activities in fiscal 2024 was lower than the prior fiscal year primarily due to higher proceeds from maturities and sales, net of purchases, of investment securities, partially offset by cash paid for acquisitions and the absence of cash received from the settlement of net investment hedge derivative instruments.

Financing activities.

Cash used in financing activities in fiscal 2023 was higher than the prior fiscal year primarily due to the absence of proceeds from the issuance of senior notes, higher principal debt payment upon maturity of our senior notes, higher dividends paid and higher share repurchases.

Cash used in financing activities in fiscal 2024 was higher than the prior fiscal year 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.

Sources of Liquidity

Cash, cash equivalents and investments.

As of September 30, 2023, our cash and cash equivalents balance were $16.3 billion and our available-for-sale debt securities were $5.4 billion.

As of September 30, 2024, our cash and cash equivalents balance was $12.0 billion and our available-for-sale debt securities was $5.4 billion.

Our investment portfolio is designed to invest cash in securities which enables us to meet our working capital and liquidity needs.

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$3.0 billion of the investments are classified as current and are available to meet short-term liquidity needs.

The remaining non-

current investments have stated maturities of more than one year from the balance sheet date;

The remaining non-current investments have stated maturities of more than one year from the balance sheet date;

however, they are also generally available to meet short-term liquidity needs.

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Credit facility.

We have an unsecured $7.0 billion revolving credit facility, which expires in May 2028.

As of September 30, 2023, there were no amounts outstanding under the credit facility.

We have an unsecured revolving credit facility, which is maintained to ensure the integrity of the payment card settlement process and for general corporate purposes.

As of September 30, 2024, there were no

amounts outstanding under the credit facility.

See Note 10—Debt to our consolidated financial statements included in Item 8 of this report.

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Pursuant to the terms of the U.S.

retrospective responsibility plan, which was created to insulate Visa and our class A common shareholders from financial liability for certain litigation cases, we maintain a U.S.

retrospective responsibility plan, which was created to insulate Visa and our class A common stockholders from financial liability for certain litigation cases, we maintain a U.S.

litigation escrow account from which monetary liabilities from settlements of, or judgments in, the U.S.

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As of September 30, 2024, our share repurchase program had remaining authorized funds of $13.1 billion.

In October 2023, our board of directors authorized a new $25.0 billion share repurchase program, providing multi-year flexibility.

Share repurchases will be executed at prices we deem appropriate subject to various factors, including market conditions and our financial performance, and may be effected through accelerated share repurchase programs, open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans .

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During fiscal 2024, we declared and paid $4.2 billion in dividends to holders of our common and preferred stock.

On October 24, 2023, our board of directors declared a quarterly cash dividend of $0.52 per share of class A common stock (determined in the case of class B and C common stock and series A, B and C convertible participating preferred stock on an as-converted basis).

We expect to pay approximately $1.1 billion in connection with this dividend on December 1, 2023.

We expect to continue paying quarterly dividends in cash, subject to

approval by the board of directors.

All preferred and class B and C common stock will share ratably on an as-converted basis in such future dividends.

On October 29, 2024, our board of directors declared a quarterly cash dividend of $0.59 per share of class A common stock (determined in the case of all other outstanding common and preferred stock on an as-converted basis).

We expect to continue paying quarterly dividends in cash, subject to approval by the board of directors.

See Note 15—Stockholders’ Equity to our consolidated financial statements included in Item 8 of this report.

Acquisitions.

In September 2024, we entered into a definitive agreement to acquire Featurespace.

This acquisition is subject to customary closing conditions, including applicable regulatory approvals.

In January 2024, we acquired Pismo for a purchase consideration of $929 million.

See Note 2—Acquisitions to our consolidated financial statements included in Item 8 of this report.

Senior notes.

As of September 30, 2024, we had an outstanding aggregate principal amount relating to our senior notes of $21.1 billion.

During fiscal 2023, we repaid $2.25 billion of principal upon maturity of our December 2022 senior notes.

Since the issuance of the $500 million green bond as part of our commitment to environmental sustainability and a sustainable payments ecosystem, we have allocated $391 million to eligible green projects.

Since the issuance of the $500 million green bond as part of our commitment to environmental sustainability and a sustainable payments ecosystem, we have allocated all proceeds to eligible green projects.

See Note 10—Debt to our consolidated financial statements included in Item 8 of this report.

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See Note 19—Income Taxes to our consolidated financial statements included in Item 8 of this report.

Pending acquisition.

In June 2023, we entered into a definitive agreement to acquire Pismo for $1.0 billion in cash.

This acquisition is subject to customary closing conditions, including applicable regulatory reviews and approvals.

Purchase obligations.

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For future obligations related to software licenses, see Note 18—Commitments to our consolidated financial statements included in Item 8 of this report.

As of September 30, 2023, we had short-term and long-term obligations of $12 million and $421 million, respectively, related to leases that have not yet commenced.

For future lease payments related to leases that have commenced and are recognized in the consolidated balance sheet, see Note 9—Leases to our consolidated financial statements included in Item 8 of this report.

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Accounting Pronouncements Not Yet Adopted

The Financial Accounting Standards Board has issued certain accounting updates, which we have either determined to be not applicable or not expected to have a material impact on our consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This standard also enhances interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment.

This ASU is effective for our annual periods beginning October 1, 2024, and interim periods beginning October 1, 2025, and requires retrospective application to all prior periods presented.

We are currently evaluating the impact of the ASU on our disclosures.

In December 2023, the FASB issued ASU 2023-09, which provides improvements to income tax disclosures.

This standard requires disaggregated information related to the effective tax rate reconciliation as well as information on income taxes paid.

This ASU is effective for our annual periods beginning October 1, 2025, and requires prospective application with the option to apply the standard retrospectively.

We are currently evaluating the impact of the ASU on our disclosures.

In November 2024, the FASB issued ASU 2024-03, which requires disclosure of additional information about specific expense categories underlying certain income statement expense line items.

This ASU is effective for our annual periods beginning October 1, 2027, and requires either prospective or retrospective application.

We are currently evaluating the impact of the ASU on our disclosures.

Critical Accounting Estimates

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Critical estimates.

We enter into long-term incentive agreements with financial institution clients, merchants and other business partners for various programs that provide cash and other incentives designed to increase revenue by growing payments volume, increasing Visa product acceptance, winning merchant routing transactions over to our network and driving innovation.

These incentives are primarily accounted for as reductions to net revenues;

We enter into long-term incentive agreements with financial institution clients, merchants and other business partners for various programs that provide cash and other incentives designed to increase revenue by growing payments volume, increasing Visa product acceptance, encouraging merchant acceptance and use of Visa payment services and driving innovation.

These incentives are primarily accounted for as reductions to net revenue;

however, if a separate identifiable benefit at fair value can be established, they are accounted for as operating expenses.

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If actual performance is not consistent with our estimates, client incentives may be materially different than initially recorded.

Increases in incentive payments are generally driven by increased payments and transaction volume, which drive our net revenues.

Increases in incentive payments are generally driven by increased payments and transaction volume, which drive our net revenue.

As a result, in the event incentive payments exceed estimates, such payments are not expected to have a material effect on our financial condition, results of operations or cash flows.

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Significant judgment may be required in the determination of both probability and whether a loss is reasonably estimable.

Our judgments are subjective and based on a number of factors, including management’s understanding of the legal or regulatory profile and the specifics of each proceeding, our history with similar matters, advice of internal and external legal counsel and management’s best estimate of incurred loss.

Our judgments are inherently subjective and based on a number of factors, including management’s understanding of the legal or regulatory profile and the specifics of each proceeding, our history with similar matters, advice of internal and external legal counsel and management’s best estimate of incurred loss.

As additional information becomes available, we reassess the potential loss related to pending claims and may revise our estimates.

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Critical estimates.

In calculating our effective income tax rate, we make judgments regarding certain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions.

The determination of our provision for income taxes and income tax assets and liabilities requires significant judgment, the use of estimates and the interpretation and application of accounting principles and tax laws.

Assumptions and judgment.

We have various tax filing positions with regard to the timing and amount of deductions and credits and the allocation of income among various tax jurisdictions, based on our interpretation of local tax laws.

We also inventory, evaluate and measure all uncertain tax positions taken or expected to be taken on tax returns and record liabilities for the amount of such positions that may not be sustained, or may only be partially sustained, upon examination by the relevant taxing authorities.

We have various tax filing positions with regard to the timing and amount of income, including the allocation of income among various tax jurisdictions, deductions and credits, based on our interpretation of tax laws.

We record a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized.

We also inventory, evaluate and measure all uncertain tax positions taken or expected to be taken on tax returns and record liabilities for the amount of such positions that in our judgement may not be sustained, or may only be partially sustained, upon examination by the relevant taxing authorities.

Our assessment may change based on various factors including changes in facts or circumstances, changes in tax law, and audit activity.

Impact if actual results differ from assumptions.

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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-K

Item 7. Management’s Discussion and Analysis