What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-30 compared with 2025-01-31 · 137 added, 50 removed, 269 unchanged (41% of the section changed)

26 unchanged sentences

Three Months Ended

March 31, Six Months Ended

(in millions, except percentages and per share data)

12 unchanged sentences

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

For the three months ended December 31, 2024, net revenue increased 10% over the prior year, primarily due to the growth in processed transactions, nominal cross-border volume and nominal payments volume, partially offset by higher client incentives.

For the three months ended December 31, 2024, exchange rate movements did not have a material impact on net revenue growth.

For the three and six months ended March 31, 2025, net revenue increased 9% and 10% over the prior-year comparable periods, respectively, primarily due to the growth in processed transactions, nominal cross-border volume and nominal payments volume, partially offset by higher client incentives.

For the three and six months ended March 31, 2025, exchange rate movements lowered our net revenue growth by approximately two percentage points and one percentage point, respectively.

See Results of Operations—Net Revenue below for further discussion.

For the three months ended December 31, 2024, GAAP operating expenses increased 22% over the prior year, primarily driven by higher personnel and general and administrative expenses.

For the three months ended March 31, 2025, operating expenses increased 22% over the prior-year comparable period, primarily driven by higher litigation provision.

For the six months ended March 31, 2025, operating expenses increased 22% over the prior-year comparable period, primarily driven by higher litigation provision and personnel expense.

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

For the three months ended December 31, 2024, exchange rate movements negatively impacted our operating expenses by approximately one percentage point.

For the three months ended December 31, 2024, non-GAAP operating expenses increased 11% over the prior year, primarily driven by higher personnel and general and administrative expenses.

For the three and six months ended March 31, 2025, exchange rate movements lowered our operating expense growth by approximately two percentage points and one percentage point, respectively.

For the three months ended March 31, 2025, non-GAAP operating expenses increased 7% over the prior-year comparable period, primarily driven by higher personnel, marketing, and depreciation and amortization expenses.

For the six months ended March 31, 2025, non-GAAP operating expenses increased 9% over the prior-year comparable period, primarily driven by higher personnel, general and administrative, and depreciation and amortization expenses.

In December 2024, we acquired Featurespace Limited (Featurespace), a developer of real-time artificial intelligence payments protection technology that prevents and mitigates payments fraud and financial crime risks, for a purchase consideration of $946 million.

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Interchange multidistrict litigation .

For the three months ended December 31, 2024, we recorded an additional accrual of $27 million to address claims associated with the interchange multidistrict litigation.

See Note 13—Legal Matters to our unaudited consolidated financial statements.

For the six months ended March 31, 2025, we recorded additional accruals of $1.0 billion to address claims associated with the interchange multidistrict litigation.

We also made deposits of $375 million into the U.

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 13—Legal Matters to our unaudited consolidated financial statements.

Common stock repurchases.

For the three months ended December 31, 2024, we repurchased 13 million shares of our class A common stock in the open market for $3.9 billion.

As of December 31, 2024, our share repurchase program had remaining authorized funds of $9.1 billion.

For the six months ended March 31, 2025, we repurchased 26 million shares of our class A common stock in the open market for $8.4 billion.

As of March 31, 2025, our share repurchase program had remaining authorized funds of $4.7 billion.

In April 2025, our board of directors authorized a new $30.0 billion share repurchase program, providing multi-year flexibility.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

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• 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 of acquired intangible assets consists of amortization of intangible assets such as technology and customer relationships 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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• Severance costs.

For the three months ended December 31, 2024, we recorded severance costs within personnel expense to realign our organizational structure and focus on areas that will drive higher long-term growth.

For the six months ended March 31, 2025, we recorded severance costs within personnel expense to realign our organizational structure and focus on areas that will drive higher long-term growth.

This broad-based optimization effort has been excluded as it is not representative of our ongoing operations.

• Lease consolidation costs.

For the three months ended December 31, 2024, we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces.

For the six months ended March 31, 2025, and three and six months ended March 31, 2024, we recorded charges within general and administrative expense associated with the consolidation of certain leased office spaces.

We have excluded these amounts as it does not reflect the underlying performance of our business.

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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.

For the three months ended December 31, 2024, we have excluded this amount to facilitate a comparison to our past operating performance.

For the three and six months ended March 31, 2025 and 2024, we have excluded these amounts to facilitate a comparison to our past operating performance.

Under the U.S.

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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.

For the three months ended December 31, 2024 and 2023, there was no conversion rate adjustment.

For the three and six months ended March 31, 2025, basic and diluted earnings per class A common stock was unchanged.

For the three and six months ended March 31, 2024, there was no conversion rate adjustment.

See Note 5—U.S.

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Three Months Ended

December 31, 2024

March 31, 2025

Operating Expenses Non-operating Income (Expense) Income Tax Provision (1)

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Acquisition-related costs (32) — 3 29 0.02

Litigation provision

(992) — 222 770 0.39

Non-GAAP $ 3,071 $ 26 $ 1,107 16.9 % $ 5,442 $ 2.76

Six Months Ended

March 31, 2025

Operating Expenses Non-operating Income (Expense) Income Tax Provision (1)

Effective Income Tax Rate (2)

Income Diluted Earnings Per Share (2)

(in millions, except percentages and per share data)

As reported $ 7,435 $ (31) $ 1,942 16.7 % $ 9,696 $ 4.90

(Gains) losses on equity investments, net — 98 22 76 0.04

Amortization of acquired intangible assets (110) — 27 83 0.04

Acquisition-related costs (66) — 5 61 0.03

Severance costs

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Three Months Ended

December 31, 2023

March 31, 2024

Operating Expenses Non-operating Income (Expense) Income Tax Provision (1)

6 unchanged sentences

Acquisition-related costs (26) — 1 25 0.01

Litigation provision

(424) — 95 329 0.16

Lease consolidation costs

(57) — 13 44 0.02

Non-GAAP $ 2,871 $ 189 $ 976 16.0 % $ 5,117 $ 2.51

Six Months Ended

March 31, 2024

Operating Expenses Non-operating Income (Expense) Income Tax Provision (1)

Effective Income Tax Rate (2)

Income Diluted Earnings Per Share (2)

(in millions, except percentages and per share data)

As reported $ 6,101 $ 247 $ 2,002 17.3 % $ 9,553 $ 4.68

(Gains) losses on equity investments, net — 26 6 20 0.01

Amortization of acquired intangible assets (83) — 19 64 0.03

Acquisition-related costs (47) — 2 45 0.02

Litigation provision (424) — 95 329 0.16

Lease consolidation costs

(57) — 13 44 0.02

Non-GAAP $ 5,490 $ 273 $ 2,137 17.5 % $ 10,055 $ 4.92

(1) Determined by applying applicable tax rates.

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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:

The following tables present nominal payments and cash volume:

International Visa

Three Months Ended

September 30, (1)

December 31, (1)

Three Months Ended

September 30, (1)

December 31, (1)

Three Months Ended

September 30, (1)

December 31, (1)

(in billions, except percentages)

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$ 1,869 $ 1,754 7 % $ 2,282 $ 2,165 5 % $ 4,151 $ 3,918 6 %

International Visa

Six Months Ended

December 31, (1)

Six Months Ended

December 31, (1)

Six Months Ended

December 31, (1)

(in billions, except percentages)

Nominal payments volume

Consumer credit $ 1,252 $ 1,180 6 % $ 1,567 $ 1,493 5 % $ 2,819 $ 2,672 5 %

Consumer debit (3)

1,577 1,474 7 % 1,668 1,512 10 % 3,245 2,986 9 %

Commercial (4)

540 520 4 % 327 308 6 % 867 828 5 %

Total nominal payments volume (2)

$ 3,369 $ 3,174 6 % $ 3,562 $ 3,313 8 % $ 6,931 $ 6,487 7 %

Cash volume (5)

300 305 (2 %) 955 962 (1 %) 1,255 1,267 (1 %)

Total nominal volume (2),(6)

$ 3,669 $ 3,479 5 % $ 4,517 $ 4,275 6 % $ 8,186 $ 7,754 6 %

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

International Visa

Three Months Ended

September 30,

Three Months Ended

September 30,

Ended December 31,

Nominal Constant (7)

Payments volume growth

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(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 months ended December 31, 2024 and 2023, respectively, was based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2024 and 2023, respectively.

Therefore, service revenue reported for the three and six months ended March 31, 2025 and 2024, respectively, was based on nominal payments volume reported by our financial institution clients for the three and six months ended December 31, 2024 and 2023, respectively.

On occasion, previously presented volume information may be updated.

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Three Months Ended

March 31, Six Months Ended

(in millions, except percentages)

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Three Months Ended

March 31, Six Months Ended

(in millions, except percentages)

4 unchanged sentences

Percentage changes are calculated based on unrounded numbers.

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

Net revenue increased over the three and six-month prior-year comparable periods primarily due to the growth in processed transactions, nominal cross-border volume 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.

For the three months ended December 31, 2024, exchange rate movements did not have a material impact on net revenue growth.

For the three and six months ended March 31, 2025, exchange rate movements lowered our net revenue growth by approximately two percentage points and one percentage point, respectively.

The following table presents the components of our net revenue:

Three Months Ended

March 31, Six Months Ended

(in millions, except percentages)

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Other revenue

937 756 24 % 1,849 1,448 28 %

Client incentives (3,734) (3,257) 15 % (7,531) (6,605) 14 %

2 unchanged sentences

Percentage changes are calculated based on unrounded numbers.

• Service revenue increased over the three-month prior-year comparable period primarily due to 6% growth in nominal payments volume.

• Data processing revenue increased over the three-month prior-year comparable period primarily due to 11% growth in processed transactions.

• International transaction revenue increased over the three-month prior-year comparable period primarily due to growth in nominal cross-border volumes of 15%, excluding transactions within Europe.

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

• Client incentives increased over the three-month prior-year comparable period primarily due to growth in payments volume.

• Service revenue increased over the three and six-month prior-year comparable periods primarily due to growth in nominal payments volume of 7%.

• Data processing revenue increased over the three and six-month prior-year comparable periods primarily due to growth in processed transactions of 9% and 10%, respectively.

• International transaction revenue increased over the three and six-month prior-year comparable periods primarily due to growth in nominal cross-border volumes of 10% and 12%, respectively, excluding transactions within Europe.

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

• Client incentives increased over the three and six-month prior-year comparable periods 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.

For the three months ended December 31, 2024 and 2023, revenue from value-added services was $2.4 billion and $2.1 billion, respectively.

Value-added services revenue increased 17% primarily due to growth in consulting and marketing services, issuing solutions and risk and identity solutions.

For the three months ended March 31, 2025 and 2024, revenue from value-added services was $2.6 billion and $2.1 billion, respectively.

For the six months ended March 31, 2025 and 2024, revenue from value-added services was $5.0 billion and $4.2 billion, respectively.

Value-added services revenue increased 23% and 20% over the three and six-month prior-year comparable periods, respectively, primarily due to growth in issuing solutions, advisory and other services and acceptance solutions.

Operating Expenses

1 unchanged sentence

Three Months Ended

March 31, Six Months Ended

(in millions, except percentages)

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Depreciation and amortization

305 249 22 % 587 496 18 %

General and administrative

Litigation provision 44 9 NM

419 452 (8 %) 900 792 14 %

Litigation provision 1,000 430 NM 1,044 439 NM

Total operating expenses $ 4,159 $ 3,421 22 % $ 7,435 $ 6,101 22 %

2 unchanged sentences

Percentage changes are calculated based on unrounded numbers.

• Personnel expenses increased over the three-month prior-year comparable period primarily due to severance costs in the current period to realign our organizational structure and a higher number of employees and compensation focused on areas that will drive higher long-term growth, including acquisitions.

• Network and processing expenses increased over the three-month prior-year comparable period primarily due to continued technology and processing network investments to support growth.

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

• General and administrative expenses increased over the three-month prior-year comparable period primarily due to unfavorable foreign currency fluctuations, lease consolidation costs in the current period and higher usage of travel related card benefits.

• Litigation provision increased over the three-month prior-year comparable period primarily due to the accrual related to the U.S.

covered litigation in the current period.

• Personnel expenses increased over the three and six-month prior-year comparable periods primarily due to a higher number of employees and compensation focused on areas that will drive higher long-term growth, including acquisitions.

The increase over the six-month prior-year comparable period was also due to severance costs in the current period to realign our organizational structure.

• Marketing expenses increased over the three and six-month prior-year comparable periods primarily due to higher spending in various campaigns, including for client marketing.

• Network and processing expenses increased over the three and six-month prior-year comparable periods primarily due to continued technology and processing network investments to support growth and acquisitions.

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

• General and administrative expenses decreased over the three-month prior-year comparable period primarily due to the absence of lease consolidation costs and favorable foreign currency fluctuations, partially offset by higher usage of travel related card benefits and higher indirect taxes.

General and administrative expenses increased over the six-month prior-year comparable period primarily due to higher usage of travel related card benefits and higher indirect taxes, partially offset by lower lease consolidation costs.

• Litigation provision increased over the three and six-month prior-year comparable periods primarily due to higher accruals related to the U.S.

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

See Note 13—Legal Matters to our unaudited consolidated financial statements.

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

(in millions, except percentages)

4 unchanged sentences

Percentage changes are calculated based on unrounded numbers.

• Investment income (expense) and other decreased over the three-month prior-year comparable period primarily due to losses on our equity investments and lower interest income on our cash and investments.

• Interest expense increased over the three and six-month prior-year comparable periods primarily due to lower interest benefit related to taxes partially offset by lower losses from derivative instruments.

• Investment income (expense) and other decreased over the three and six-month prior-year comparable periods primarily due to lower interest income on our cash and investments and losses on our equity investments.

Effective Income Tax Rate

1 unchanged sentence

Three Months Ended

March 31, Six Months Ended

2025 2024 2025 2024

Effective income tax rate 16 % 15 % 17 % 17 %

The effective income tax rate decreased over the three-month prior-year comparable period due to various items including a change in the geographic mix of earnings.

The effective income tax rates for the three and six-month prior-year comparable periods differ due to a change in the geographic mix of earnings as well as the following:

• For the three and six months ended March 31, 2025, a $222 million tax benefit as a result of a tax position taken on certain expenses, partially offset by a $71 million tax expense related to the resolution of a tax matter;

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

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

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

Three Months Ended

Six Months Ended

(in millions)

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Operating activities.

Cash provided by operating activities increased over the three-month prior-year comparable period primarily due to growth in our underlying business and the timing of payments related to income taxes.

Cash provided by operating activities increased over the six-month prior-year comparable period primarily due to growth in our underlying business and the timing of payments related to income taxes.

Investing activities.

Cash provided by investing activities increased over the three-month prior-year comparable period primarily due to the absence of investment security purchases and higher proceeds from investment security sales and maturities, partially offset by cash paid for an acquisition in the current period.

Cash provided by investing activities increased over the six-month prior-year comparable period primarily due to the absence of investment security purchases.

Financing activities.

Cash used in financing activities increased over the three-month prior-year comparable period primarily due to lower funds held on behalf of clients, higher share repurchases and higher dividends paid.

Cash used in financing activities increased over the six-month prior-year comparable period primarily due to higher share repurchases, lower funds held on behalf of clients and higher dividends paid.

Sources of Liquidity

6 unchanged sentences

Common stock repurchases.

For the three months ended December 31, 2024, we repurchased shares of our class A common stock in the open market for $3.9 billion.

As of December 31, 2024, our share repurchase program had remaining authorized funds of $9.1 billion.

For the six months ended March 31, 2025, we repurchased shares of our class A common stock in the open market for $8.4 billion.

As of March 31, 2025, our share repurchase program had remaining authorized funds of $4.7 billion.

In April 2025, our board of directors authorized a new $30.0 billion share repurchase program, providing multi-year flexibility.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

For the three months ended December 31, 2024, we declared and paid $1.2 billion in dividends to holders of our common and preferred stock.

On January 28, 2025, 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).

For the six months ended March 31, 2025, we declared and paid $2.3 billion in dividends to holders of our common and preferred stock.

On April 29, 2025, 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.

6 unchanged sentences

See Note 2—Acquisitions to our unaudited consolidated financial statements.

For the six months ended March 31, 2025, we deposited $375 million into the U.S.

litigation escrow account to address claims associated with the interchange multidistrict litigation.

The balance of this account as of March 31, 2025 was $2.9 billion and is reflected as restricted cash in our consolidated balance sheets.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

2 unchanged sentences

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.

The adoption of this ASU is expected to result in additional disclosures.

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

9 unchanged sentences

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 2. Management’s Discussion and Analysis