Visa (NYSE: V) today announced financial results for the Company's fiscal first quarter 2010 ended December 31, 2009.
GAAP net income for the quarter was $763 million, or $1.02 per diluted class A common share. The weighted average number of diluted class A common shares outstanding was 745 million.
GAAP net operating revenue in the fiscal first quarter of 2010 was $2.0 billion, an increase of 13% over the prior year and driven by strong contributions across all revenue categories, in particular data processing revenues and international transaction revenues.
"By all measures, Visa's fiscal first quarter was a strong start to the new year, as we continued to execute well against our business plan," said Joseph Saunders, Chairman and Chief Executive Officer, Visa Inc. "We were able to capitalize on the secular trend to digital currency and grow revenues, as we expanded our payments network and processing capabilities to drive transaction growth through effective marketing programs. Even in the midst of the current economic environment, we remain fully committed to assisting our clients through these challenging times and returning excess cash to our shareholders."
Fiscal First Quarter 2010 Financial Highlights:
Visa Inc.'s operational performance highlights as measured by business activity for the three months ended September 30, 2009, include:
* Payments volume growth, on a constant basis, was a positive 2.5% over the prior year at $720 billion; and
* Total cards carrying the Visa brands rose 5% worldwide over the prior year to 1.8 billion.
Cross border volume growth, on a constant basis, was positive 2% for the three months ended December 31, 2009.
Total processed transactions, which represent transactions processed by VisaNet for the three months ended December 31, 2009, totaled 10.9 billion, a 12% increase over the prior year.
For the fiscal first quarter 2010, service revenues were $827 million, an increase of 4% versus the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 38% over the prior year to $765 million. International transaction revenues, which are driven by cross-border payments volume, grew 9% over the prior year to $552 million. Other revenues, which include the Visa Europe licensing fee, were $190 million, up 21% over the prior year. Volume and support incentives, which are a contra revenue item, were $374 million, which represents 16% of gross revenue.
Total operating expenses on a GAAP basis were $743 million for the quarter, a 4% decrease primarily a result of a $41 million pre-tax gain recognized related to the prepayment of the remaining obligations under the Retailers' litigation.
Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $6.0 billion at December 31, 2009.
Operational Performance Highlight for the Quarter Ended December:
Commencing with this quarter, current payments volume growth and other select metrics will be provided in the operational performance data supplement. Service revenues will continue to be recognized based on payments volume in the prior quarter.
Payments volume growth, on a constant basis, for the three months ended December 31, 2009, was a positive 8.5% over the prior year at $769 million.
In October 2009, the Company announced that its Board of Directors authorized a $1.0 billion share repurchase plan through September 30, 2010, and is subject to extension or expansion at the determination of Visa's Board of Directors. During the first quarter of fiscal 2010, the Company repurchased 5.5 million shares at an average price of $78.78 per share for a total cost of $432 million. At the end of the first fiscal quarter, $568 million remained available for repurchase under the existing repurchase authorization.
On January 20, 2010, the Company held its 2010 annual meeting of stockholders. Stockholders approved the election of five Class III directors and the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2010. In addition, the Board of Directors declared a quarterly divided in the aggregate amount of $0.125 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis) payable on March 2, 2010 to all holders of record of the Company's class A, class B and class C common stock as of February 12, 2010.
As previously announced, the Board of Directors approved the release of additional class C shares. The number of shares released for any class C shareholder will be the greater of (a) 50% (fifty percent) of the restricted class C shares held by that shareholder as of March 1, 2010, and (b) 5,000 (five thousand) class C shares. The shares will automatically become eligible for public sale on March 8, 2010. The remaining restricted class C shares will continue to be subject to the general transfer restrictions that expire on March 25, 2011, under Visa's certificate of incorporation. Class C shares sold in the public market upon release under this program will automatically convert to class A shares. Approximately 56 million class C shares are expected to be released from transfer restrictions. The release of the class C shares will not increase the number of outstanding shares on an as-converted basis of the Company's common stock, and there will be no dilutive effect to the outstanding class A common stock share count on an as-converted basis.
Visa Inc. updates its financial outlook for the following metrics for 2010:
* Annual net revenue growth in the range of 11% to 15%;
* Annual operating margin in the mid to high 50% range;
* GAAP tax rate in the range of 36.5% to 38.5%; and
* Capital expenditures about $200 million.
Visa Inc. affirms its financial outlook for the following metrics through 2010:
* Volume and support incentives in the range of 16-17% of gross revenue;
* Advertising, marketing and promotion expenses less than $1 billion;
* Annual diluted class A common stock earnings per share growth of greater than 20%; and
* Annual free cash flow in excess of $2 billion.
Visa Inc. affirms its financial outlook for the following metrics through 2011:
* Annual diluted class A common stock earnings per share growth of greater than 20%.