V - Earnings call transcript Q2 2020

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Operator

Welcome to Visa's Fiscal Second Quarter 2020 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time.

I would now like to turn the conference over to your host, Mr. President Relations. Vice Senior Milotich, of Investor Mike Mr. Milotich, now begin. you may

Mike Milotich

Good Thank call. welcome afternoon to Jordan. Visa's earnings and XXXX everyone you, quarter fiscal second

to us Relations Financial Officer. Chief call Chairman is Prabhu, Kelly, on are This Vice Officer; the webcast Investor Visa's deck Web the Chief and Vasant of has for XX site site on archived our highlights Joining site. at and and Chairman our Web statistical being A today section IR www.investor.visa.com. containing slide be been and A Al posted replay Executive will Visa's financial days.

also factors. that of statements. future me a could presentation guarantees These our and includes as actual results Let forward-looking remind you performance, differ not many statements of are materially this result

available on the section Web Investor concerning most XX-Q, of site. factors our our XX-K, Forms the information recent SEC's find X-K, on those which can Web Relations and is in site and you reports Additional

For the call, historical non-GAAP financial GAAP earnings are in reconciliation measures release. this today's related the available information disclosed in and

last note before one started. get we And

want Given we we minutes. run by few of allow time so content likely have over a today Q&A, to the we're for amount and to

let me call And with Al. the that, to over turn

Al Kelly

and you And thank very Hey, Mike, joining good thanks afternoon much. us everyone, for today.

you First well and and families your hope foremost, safe. I are and

by A year that been looked quite promising after COVID-XX. has substantially a solid first disrupted quarter

negatively communities right been been in and focus around March has have whose business impacted, our clients, world lives unimaginable for affected things the the employees, ways. and been the While doing April, our in our has our

personnel, being careful back we professional base, understanding services, short-term marketing. our on although long-term for about to we in our manage and travel, especially on and circumstances. are pragmatic to spending end continue We business spending related pulling are the our Through discretionary are quite that certainly expense we

to Throughout brand, our in the development. and development, business all remain this future, in we in of investing committed product technology,

absolutely a globally. money at to consumer to services. compelling laid that three single for as levers are Investor payments, case for there Day a be updates On in of these our growth out going business call flows, movement on we and to look And we want today, underlying growth, long-term terms Visa's I new connection the medium and value-added be the changed may prospects You has for opportunities nothing about that growth primary recall of point the clear COVID-XX, our our to results, growth. for cover to some and that company. and long-term I'm response our

X% $X.X revenues start, an in To increase billion, Net were of quarter fiscal X% dollars. second quarter our second results. or in constant

Although cross-border business were on the latter were part are our X% X% over Payments excluding results X% on each transactions for volumes the day globally basis, an second constant increase driven China, part most or A drivers February, year. our already the XX.X quick in impacted with by COVID-XX over the meaningfully follows. billion quarterly declined a X% volume Asia, quarter. we March. as Visa processed not grew snapshot of on and until volume on for by the dollar per of days XX of Cross-border XXX in million network, transactions prior the weakening

that that helped usual as was performance more when am by the expense Our into recognize, management. dive remarks. finished detail Vasant as information my prudent the given our community X%, possible. end, growth on than We non-GAAP EPS environment, much appreciate to will would investment I And

partners, with Since globally employees, help close and them outbreak these and clients, regular we've contact in the navigate been very challenging governments to COVID-XX times.

we maintaining in infrastructure resiliency been Visa And vast a work-from-home and even that stability, the performance We application our layoffs employees and end, be let that Our year our status. as to COVID-XX. of in critical that related their the the I pledge has families. and the and to network foremost no unaffected payments XXXX of of me calendar global role security, there wellbeing transition to state employees ecosystem. is health employees majority priority XX,XXX To our recognize plays our would the

have operations world. business business comprehensive coordinated plans Our to and needs recovery place around in and continuity the address

for We're make working as Navy even Federal United pay contact clients closely with recently initiatives, at and physical merchants with the in to the in issuing has cards. a tap they the of to number with reduce which pay States gained momentum issuers our to cardholders need to starting started tap terminal. seek more

million participating, country issuers on and So are XXX of pay been than have the XX issued, nine that cards United States more other surpassed we to globe. that have top tap any now U.S. is the in

side, On pay the grocery of chain enabled grocery to large thousand now rolled recently out stores a than more a to pay. stores, merchant the tap XX are to tap nine top for so

pay. face-to-face to excluding transactions, At were United the the of second tap XX% States, the quarter end of almost

And acquirers, to XX% can tap transactions Globally, pay them We've pay merchants actively merchants tap for all their United for terminals. Hut pay limits. free to to Web their in where large And KFC a we ordered have issuers, to the like site stores over also engaged with Pizza and signage year-over-year. States. launched increase governments tap grew merchants, request and

increases. and To Georgia, countries a XX East the XX XX including countries, in Middle announced have European the and Africa, over and name weeks the including the few Poland, markets fact, few, U.K., Egypt. Ireland, Ukraine, last in In

with also Zealand to world of a Visa limits. expect ways. have working Canada, digital the Australia, number other we closely New and countries And to crisis the the in recognizing respond increased to around follow payments. Also of governments their is benefits

rapidly are state XXX,XXX we beneficiaries. growth in expand government over Dominican programs, program deploying reach a virtual seeing prepaid be relief emergency dozen program, Republic the million to will solution next we in months. solution including three example, developed support we in two States, two given For Likewise, And million XXX% Visa Guatemala's just X.X the households programs. over to United last. Visa unemployment to a from Direct the government's insurance disbursement emergency accountholders the to the environment, the In supports

food another area is to We're Visa world. helping performance to assist the two providing also on a frontlines communities. women's fostering of Visa and support the XX been the around recently support $XX economic the micro organization in each around announced Foundation million has as operates, able Visa small the pandemic, helpful governments million is COVID-XX crisis. We government of to advancement. towards on and five in Data to commitment the health $XXX geographic public businesses the our economic which Visa nearly charitable regions $XXX such insights agencies to and programs. during million relief into focus by world with the where responding

to with and developments the our is good continued, be a services. of flows, underlying support shift we all several now number growth. meaningful growth for see renewed COVID-XX, for Let the in innovation the had relationships in key partnerships medium in of for on positive business, will that value-added formed. and consumer and new core me really opportunities commerce with prospects which This us Even and to new updates very business long-term payments,

recently are a few competitive of had United with previously Visa one highlight completed contracts both who them. just mergers from these issuers network. me two States, and the and notable deals Let In the

as brand credit, ahead. partnerships extension Truist a and of this largest on our debit DPS of years as issuing, consumer announce look myriad forward debit, to pleased meaningful very working are bank. Truist, the the building, to U.S. expansion small business, bank experience commercial and efforts consumer sixth our issuing with and consumer well the We processing in with innovation, We

merger the of are debit Chemical Bank the largest create the banks the of business and existing to States, in these business. following Bank Additionally, XXth and TCF new United one

both our more agreement and largest grow corporate issue Slovakia, and extended Visa Continental Europe into and enabling Bosnia agreement progress. France, its on for European an Austria, debit new to signed their Bank long to with Visa Pan-European to us growth Herzegovina. relationship support and and XX-year standing building make continue Cooperative we our in with In we Visa cards German the Banks and support partnership In and consumer the credit U.K., card Comdirect which largest credit million markets. announced our of processes their business to credit. Europe, credit of Bulgaria, BPCE, debit XX jointly business focus Also and Barclays' on UK's one Czech to commercial and Visa the customers. with debit million than Visa nearly extended the selected innovation and the with In six consumer Republic, X.X customers. bank ING-DiBa renewed Slovenia, small their Barclays, half consumer extended Group relationship Bank, retail A a with markets: across XX-year an agreement client U.K., transactions, grow in business,

Office Bank to X business with expanded the one Al banks the world, to the In with leading serve and of renewal Saudi Queensland, large Australia's our customers. Taiwan. signed a clients. close partnerships Post some renewed largest Post, and rest issuing In of the partnership deals the with Chunghwa debit Australia, largest Arabia, XX-year exclusive Rajhi in two in Bank, retail bank of and million regional we issuers, renewed of we We their personal

and by were debit the Peru, preferred have America we chosen Costa credentials Caixa, Rica. with is cards. leading Jamaica digital and and Panama, Caribbean, investment we the and Latin card issuance; issuers largest the we and banking a in issue platform Brazil, the to partnerships moving In brand that customers extended largest In XP, as

processing to is a for Class Mexico, well important allow We a bring as innovative for World as also solutions network to card as payments obtained and key domestic will market. to which This reliability security our license a services. clearinghouse step in Visa very Visa provide to operate

the Visa co-brand We global recent with sector was brands opportunity This significant travel and is represents most core in the of XX exception know, wins. the such chain announced as no and As largest leader hotels you global in Sofitel. in history. fourth novo co-brand sizable this as with Fairmont terms the co-brand hotel de the quarter partnership

member deliver Airlines XXX the partnership into engagement. million to more Chase even Live to Limitless proud February, the program our partnership an program's and success strength and Visa announced credit bring and excited our XX partnership loyal the customers Chase. long-term of XXXX. Loyalty on to Accor Visa building will extension and our base its and of United United Our In network card continue globally. more to We're cardholder expand extended value million is than with brand we've

mentioned issuing important are our credentials. acceptance in agreements to very Korea As South Previously Visa India for noteworthy made wallets consumer issuance and this quarter. seeks with Toss partnership both now and new progress remain we've business, in grow Paytm and

Tencent, with Arabia, STC In more the Saudi partnership Chinese we on forward China, Korea, first in addition, international the Nigeria, in cross-border This signed X collaboration billion WeChat we of Kias Pay In users. PayCo parent Japan. monthly AGA add platform than wins marks to with in in with a we new with card innovative credential with and solutions scheme. partnering for Visa an active card look Tencent's five-year holders. co-brand And

expanding credentials globally. issuance embed wallets. in Sub-Saharan to potential the Safaricom, firm provider paramount with we've that a largest give of services like Visa with and with XXX,XXX Africa, through Collectively wallet relationships Kenya, are have merchants, M-PAiSA. and M-PAiSA partnership these the we and XX WeChat strategic billion us telecommunications users financial acceptance partnerships Safaricom, and In the providers two now million announced M-PAiSA in wallet our With to

at businesses, focused we're age on for younger for to In day. Lydia for In and Shifting a card platform. over flows we're in Direct over the capabilities are X,XXX PXP XX money moving renewed we $XXX users States, important one their with the and France cash new program, Fintech opportunity, recently with the per cash and number including three with Europe, and below people Square end-to-end our with app younger, growing the million of that service relationship working United governments Visa in issuing trillion users consumers.

Direct to especially in Visa continues be environment. capability, a the COVID-XX powerful

hospitality earned also on Visa categories serve increased We're PXPAY. digitizing on wage working access XXX% pay well for quick speaking across over healthcare, specific this quarter. Direct or and supermarkets, year-over-year restaurants, cross-border transactions demand example, workers one As

quarter the Direct. launched initiated expanded MoneyGram in This additional Remitly all Korea issuers countries to also of with XX in cross-border and cross-border South program, KB card a one countries. leading Visa seven Kookmin

first sizable a a BXB the BXB an new bank space. drive ICBC, us continue are represent our with with business we we and a largest help core into ways of deepen Visa new China, Australian announced BXB agreement for and card, opportunity relationships, solutions. look to China. in role also for in launch cards borderless for Cross-border and the business. our to virtual services extension representing new with partnership entered Global unique our and And cross-border Value-added cross-border Airwallex clients Partnership Fintech the plays with flows a and in to the significant BXB an grow of capabilities bank

no quarter This exception assistance. was terms in for clients looking of

Truist, to addition that represent nearly DPS's volume. in DPS, renewed we annual issuer In six XX% transaction of deals

agreement signed reduces to the terms key charge-backs. from In of prevent acquired provider helps enable recently Disputes time with details near our an e-commerce large delivery issuers in to real and disputes platform systems disputes, transaction CRM their Verified a of which

In accessing In the users imagine, performance quarter, Analytics X,XXX XX% a enabled our analytics projects than approximately quarter are very of quarter the leveraging first interested can in second year. quarter, our the in client last rate. consulting, were data, access. you the their an than of throughout terms more reports at clients as Nearly are We increased reports of total at clients delivered of the Visa end and XX,XXX consulting XX% more platform. for benchmarking

and The management to CyberSource business services. around gain momentum Omnicommerce, with gateway, acquirers fraud and and the merchants supportive globally world innovative continues

look Merchants quick some challenging for and example Click. leading holders our rates to due secure the technology enroll also now part in during of payments checkout. in e-commerce store For the our and safe a introduction examples card how gateway, CyberSource us. These card in allows is of to merchants, are market for which India, XX% increase quick times when information Safe using saw authorization just to clients

So, in lot performance is continue see Yes, no closing, doubt of momentum. there that COVID-XX. impacted be will that you a there's business our can to by

the to PathToPay digital to and We of continue critical as well with as shift e-commerce, the services. our do on focus our added value clients attention supporting providing acceleration payments,

globally model will resilient, ever. more certainly a our road challenges and of is to movement money quarters, is the number business enable relevant ahead the than its strategy Although for have our of

With that, over let Vasant. to me turn it

Vasant Prabhu

in you, after everyone. Al, business. than crisis, decline with U.S. is added questions To April with we discuss the provide absolute COVID-XX trend about second with volume normally equally presentation the and level cross-border know rate provides growth. derivative many and up-to-date for all of This our slide will this you data And of growth volume you is trends additional good the of is in important, as growth, change weekly we Thank while transaction more to and have quarter afternoon, we To data our earnings we've the slide on occurring well unprecedented through an This important. as all the time. March details would. lines a you Also, fast-moving payments impact help this, on for or the ended XXth. process

payments of debit lockdowns were than precipitously volumes volume, been last after and By went declines as harder second-half January U.S. than growth volumes in payments payments into and with Credit spending March, XX% the week hit have every across of April. week in was March, U.S. more XX%. the Starting strong in dropped February, effect the declining

other in down two weeks and territory the and first four week in both a recovery, week in distributed. of mid-teen April weeks. through is impact of the debit economic April is wave to into On payments the first of as spiked start will fade the hand, the was of tell the couple or three It new too if uptrend a this second-half a in of were early plateau, positive

down and U.S. down Through are X%, XX%, down April payments debit credit is volumes XX%. XX, is

online is along by two drugstores not This volume up April and card XX% in is and this April, with only may up of significant is XXX% present still impacting present all and full a XX%. not coming Costco present delivery. target. differences category down curbside how last of growth U.S. growing card pickup weeks One-fifth is adoption in excluding April, essentially from Walmart, also difference have card over the in ecommerce are and There in and of travel in or lockdowns present approximately As XX% categories. the with volume volume performance there drastic expected, be up in spend assisted spending thought been payments the

of healthcare, XX% XX% these telecom, in U.S. up equipment. is and like April. shrinking a declining such are with less more A the between are automotive, are recovered of TV end categories of discretionary, as well, These variations business one-fifth to that utilities, more Another less resiliency. in that retail, performance our third at supplies insurance, and within with have volume categories essential U.S. There payments government. and are holding categories purchases is relatively flat and in than significant prior in March, to showing education XX%,

or equipment For more delayed impacted. where example, home hospital be within and discretionary improvements healthcare, within is can retail, spending or more or heavily medical categories

example, For federal retail doctor within and spending healthcare. a dentist or visits within

volume our of in the travel service over of but right restaurants category to all driven over Fuel and is restaurants affects equipped in this not due up were travel, falling restaurants, component but for including entertainment, in amusement a better sub are the hardest up delivery which parks especially both is The and to hard XXX% degree, declining payments by apps gaming deepest prices while fuel, theaters XX% are environment, sectors decline being place. and XX%. better, some drive-thru offset part hit movie one-fourth Within holding April. infrastructures Within in already About hit, fewer entertainment, categories, is now. one typically all around and quick is small the declines another purchased, gallons at and

robust remains impacted. negatively merchant sharing and April. food settlement even around growth and cases such slowed second disbursements in at while disbursements are activity delivery a Use quarter PXP and but accelerated ride Direct Visa has as in bit, XX%

payments As been home have some benefited. in economic automotive, and not and have categories. health fuel Travel entertainment restaurant retail improvement, increases we seen impact have categories care goods significant distributed, services

growth XX% X% payments respectively, in International Growth second volume Latin excluding remains and quarter. part in was XX% America CEMEA, and climate and strong constant over X% due regions. China in dollars the to both growing

largest decelerating the central grew and starting grew early as excluding two from the Asia-Pacific, for points last part the impact percentage deceleration large China February was X%, down last of X%, percentage quarter, COVID-XX with Europe significant points the four in region. quarter, southern Europe. a versus in

decline. across major as well of we U.S. process have Looking and the all Canada appears the in Much Europe Australia as markets in there the has credit, the similar April. with terms to lockdown transactions, markets second-half decline. these that the a in key the outperforming of like a have the depth in better markets both international tick is of majority trajectory leverage U.S., some up shallower trends to and of been

sudden with Asia, India appears rest Kong downward the has of sharply in Within Hong to to and goes countries are restrictions. stringent payments the is consumer into e-commerce then early U.S. China variations. to to infrastructure Brazil there experienced of as across the in generally a digital most lockdown is trend, outbreak. the be so lockdown seem along April. rigorous driven Japan Singapore with on dipped far. markets, dropped under of effect. one February recovering a and dropped early and a doing of deepest and in again place, stabilized very adoption fastest Elsewhere, category and relatively Across quality performance Differences is better by the be has by prior declines. the similar

some both impacted sharp better and we we Korea data down quarter, grew depressed. healthcare, retail March. and With least sets. April, than last supplies the transactions declines have in indicates Travel transactions, and This levels do categories Korea in restaurants entertainment March some second-half In been in data two the April, markets, X% are economic markets. business recovery the equipment, fuel, with benefiting of like key China generally where may slightly in April stimulus In a among week process for improvement, and of limited well Process of reached have the home underway XX, most not the XX% to and remain education government. sectors are payments is markets.

In volume, have and and stimulus Transactions saw typically or transactions over in declining declined slowdown Constant XX% strong to volume recent X% grow we categories was several significant like uptrend and as of volume growth like steady consumers payments, by categories exiting week dollar quarter, temporarily points volumes, in intra-EU the Volume ticket cross-border declines everyday or week and than XX% restaurants spend low faster prioritized the spread higher February, and Asia the XX% penetrate we week in changed, small Europe. second as as around started has entertainment. on down automotive that home second or ticket relationship the categories. excluding within improvement, ticket excluding the crisis remains month world, excluding or January in volume in April XX% March, the intra-EU. XX to volume X%

roughly the across April spend present. than and volume e-commerce present of The month and is in positive volume, is majority related represents pre-crisis related present in and corridors not down XX% has and spending. of by in spending of and within line travel is the declined cross-border last two-thirds of cross-border but across card grown with depth The related, recovering ecommerce cross-border markets spend categories In XX% spend levels. Europe. of travel regions. excluding uniform faster over This card present March. declines cross-border retail All March, week our in is spend quite cross-border April, March, the and travel both led non-card travel decelerated decline Growth and and trajectory remain excluding card

dollars. of quarter, review second X% in in quarter A grew financial quick net results, the X% or revenues constant our

driven two revenue points have volumes, on would revenue growth volume. current Based net quarter's lower. service around payment our total quarter reminder, is by a last As been

to revenues grew from prior, over benefit last value services. pricing added revenue. were services the XX.X% service by gross aided related Client rose incentives processing Other by and X% continuing last XX% slightly of up revenues value quarter acquisition actions. quarter. revenues supported rose X%. revenues, from Second Data International year's transaction XX% added grew revenues

step to high As activity, we previously, in as client to due renewal quarter told noted. the expected second incentives you continued the up which

majority costs. Non-GAAP we on well are incentives clauses widest for expense adjusted with in significantly payments changes million as lower performance. million operating for or This to GAAP expenses are the than of growth multi-year of there related $XX in in excluding fiscal current moved assets The annual of X%. as specific client equity the original cross-border, was $X med acquired with we non-operating was quarter to investment expenses the plans the but our were minutes. losses. growth the are more quarter, is when that GAAP second up intangible contracts and non-recurring including fast tied volume reduce overall saw expense few the targets expenses quarter, X% amortization spreading acquisition as

Our rate XX.X%. GAAP QX tax was

impact now uncertainty in and of of is significant COVID-XX pandemic is might few its how global Moving There degree over evolution to scope, a affect this early happens in next months. about the its year. rest very what high the This fiscal

As a for relevant. prior is forecasts self-evident, for not And provide possible you longer is fiscal any no the second-half. is it XXXX outlook with reliable to

since third, when driven trough stay the over impossible decline, is the term near consumer categories which variables of mass distancing will of the will in reopen, are and the to activities, dine execute, permanent zone It to across the at airline the trajectory over and trajectory like recovery. engage recovery reliably critical going state, type stays, by harder country the time and level, on three How of the consumer restaurants, by we be in the by is and countries. business the shift especially of confidence and to trough first, in differ on timing, of term, travel, be geographic the reopen how will depends we to variables: forecast be category, It entertainment, staging category. trajectory revenue and for beyond county, when decisions many tracking including decline, comfort. be depth hotel they city, behavior these depth where of and factors, Our and the second, consumer and venturing near may social willingness reopening borders the

analysis, health final a the this In is crisis.

As testing, and such be the consumer normalization a pace by advancements ultimately and in influenced will therapeutics, availability of of the significantly behavior vaccine.

have that environment. us reliably allows We no to forecast revenues ball crystal in this

the plans. outcomes revenue as can predict? you lag. Why to are more fast report service note, fourth when recovery relates it control on we up XXXX, and expense our is to hurt early COVID-XX another point of by it impact In we we revenue over lag, revenues. outcomes, will quarter third helped, the fiscal since a quarter one we We will this in one be shows in so have service before revenue there our hard with As have Asia, reported give year to clarity quarter our more a quarter it expense take In saw them. February, move we rethink to

reduce expectation we we to As reported. were second the to able from result, our expenses X% of mid-teens previous a growth a quarter

completed were were second the we expenses fact, 'XX, which last fiscal up if In quarter of in in fourth expenses year, acquisition, you in X%. exclude quarter not only our the the

plans year, have and last reduce flat acquisitions, place excluding hold will to additional single further. low in year-over-year. compared actions evaluating expenses to We be expenses We're our second-half digits the down even expenses to in

only existing areas, Olympics, reducing delayed to fees, the the on external back and within reduce marketing as business is Al the planned of and scaling where course, meetings professional to the to drive is growth resources. projects the investments foreseeable flows plan use Tokyo have of to for by in hiring new future. Operating these a we are want that you long-term extent employees Also, reduced largely this calendar parameters know, indicated, XXXX. companies, travel all resources we services. second-half and to priority like critical fixed. saving redeploying as will to in for the expenses now high will has value-added ours redeploying layoff And spend, most preserve prioritizing related we As possible not most and roles, in critical And we're crisis expenses

second-half, flat will While operating expenses we expenses the or to higher. be be down in expect non-operating

debt With will dropped excluding rate We interest versus the million billion the gains million losses, in $XXX $XXX in expenses with income higher, has $X the in sharply reissued, April, declines. the be interest in while the second-half on non-operating first-half. expect in expense to now

cash in to and liquidity, on been free expectations. of dividends flow first-half buybacks, 'XX tracking year our flow, cash ahead fiscal has of Moving the

year $XX and our maturities, We our ended We securities quarter, cash, healthy the the last added had issued given equivalents, characteristics we COVID-XX three decline a scenario. flow a anticipated Despite to the business, tranches, billion balance quarter $X to hand. fiscal debt with of free at on will still under average cash cash with of Since in level our the impact, October. However, below have XX-year we second-half, of year this investment free revenue any end cash issuance. planned flow cash this of XX, the the rate seven, cash the generate expect our in billion X.XX%. be and of very we what given debt weighted coupon

billion paper commercial and as cash revolver with the hand on market which liquidity access undrawn. ample a have well to We remains as favorable $X terms, on

billion billion an In the unchanged. XX.X Year-to-date $X.X we remains policy shares at for back $XXX.XX. price average XX.X at bought of quarter, million million price back for average second bought shares we an dividend $XXX.XX. Our have $X.X of

in this stock remains to fiscal year over $X plan billion unchanged. buyback Our

and acted bring one is and both opportunities, different. to with fast no mitigate the this them We've risks. Crises risks

that speeding ecommerce like on forms capturing payment. working identifying opportunities. of this digital use demand shift the We likely It increasing we Day, to to add are accelerate that is tap to crisis It trends underway, adoption, capabilities at and cases the is our were to our could highlighted growth of very through services, Investor and the pay already our and new shift actively driving up flow offering for acquisitions. value-added to selective opportunities

the short-term growth setback, our suffer performance will long-term confident business. we While potential remain a our in of

to this I'll that, With turn back Mike.

Mike Milotich

Thank you.

we're to take ready questions. Jordan, now

Operator

from [Operator Sakhrani Sanjay first KBW. comes from Instructions] Our question

is Your open. line

Sanjay Sakhrani

healthy. and you Good I are Thanks. morning and hope staying all guys well

you you could structural Thanks. impacts on feel result, how that just might talk about it cross-border about Just when a a the structural travel, occur rebound? travel question the and and as to expect of now you nature

Al Kelly

-- that's as countries are Thanks, well don't some people will percentage a down, lockouts Sanjay. mandates. will will over well. that the think do by huge at time largely think I move legs loosen -- percentage, now driven government and stretch are come right hunkered And I know obviously back travel thing first be people look these Hope I to what and as around bit. but domestic I up. of Look, you their think

I think little will come to bit a travel back. longer cross-border take

testing And feel think some of to therapeutics, we I advances. remarks, terms as start think everybody make made in and comfortable. Vasant more some going a in advances we're and to lot need a need note will of his I vaccine ultimately

So I but it's think some to will it's time think and to I back. come going take going -- it take

fact the they that weeks I level that same think people there market, to given that some and home return an from the realize where done could environment for the can it's done. been possible nine, they business what have in get working we're need seven, upon depending doesn't get eight, XX that at travel be

So are of structural be same that well to is how opportunities that, ecommerce we'll Sanjay, plays in the going I really the to before COVID-XX. didn't ultimately displacement real Offsetting that think have cash at the level opportunity business the out. as exist that reality the see as explosion

Sanjay Sakhrani

Thank you.

Mike Milotich

question, Next please.

Operator

Moshe Our Credit from comes Suisse. question next from Orenbuch

Your line is open.

Moshe Orenbuch

Great.

of a question And you related that answer, cash -- to and to healthy. your last types conversion. extra about at elements of the you for on you have if and Thanks keep and of said So And that all should talk the outset, the economics probably will, little perhaps glad following Al, are up could the up of ecommerce data, hope transactions? actually too. business bit, the those evolution, can you that

Al Kelly

it. well appreciate and you Thanks, Moshe, family your well. are Hope as

credit there terms or of card There difference. much First to that present. whether present it's or tremendous of a isn't amount isn't the or just of all, difference a debt, of not card Visa in economics

main think I point. that's the

the a people that apparel. very, typically really isn't it's cash that furniture, seeing in last that's cases I And in things ecommerce to some when think degree electronics, buy that's couple is they that think remember, store, very these that beyond of the environment buy whether we're start I during in to in months good space. ecommerce that for a positive good they've And that a experiences, had reality think the about us thing. thing you because competitor would

think we So there and face-to-face in those lot the a that are changes. some transactions ecommerce share permanent get the world, from get we reality I go that is than higher to

suspect come people things whether that they're explode this. Now, of as at stays the finding do to of general, in bit, I ecommerce a while I home, coming up down that'll think, back gaming level but will out are

Vasant Prabhu

people noticed you -- was might ecommerce points to prior growth call to of that. of spending. cross-border a excluding mean what More half add of that couple have crisis, rate services ecommerce on data it lot a categories retail format. cross-border trending now the a buying to that at Yes, falls than is that it are and might is than a travel into points faster ecommerce -- you goods I and

shifts The other are this the have now, permanent changes where example, had to, have be towards point could massive they transactions, buying. perhaps obviously thing to was face-to-face that alternative, propensity categories and there where drug, that for at for online food more reasons no are

crisis. could goods there's way to card. beyond -- your the not digital of cash, growing might growing could use and do forms structural not could to some The be cash tendency just penetration face-to-face, transactions aversion the even permanent. which that, a be in also want a have payment to And faster And course to even of means permanent these of of in persistent, be and tap then prior then even certainly it to fairly that face-to-face

Moshe Orenbuch

Great, thanks very much.

Operator

Our next question comes from from Tien-Tsin Huang JPMorgan.

line Your open. is

Tien-Tsin Huang

Thanks good much Hey, this data. so afternoon. all for

the an on legacy have with incentives give might forgive I the great. the it, Just majority be those to clarify Thanks. but client reissued if will all would to on volume bit tied expiration, missed me would second-half non-Visa look but little did us detail can listed. heard on just side, client SunTrust quick follow-up growth, we then that. I any there at the outlook how cards incentive of you a on wins that as be just a or flipped assume is Truist, wanted be And we to as other

Al Kelly

thank work hope with swept, we're and be Tien-Tsin, over they're client building hard on going We're but time Vasant and some thrilled deal out, incentives. there's comment you're cards Truist. Remember, to [technical you, well. to difficulty] I'll second-half new take very to here. the and going came brand a obviously let

So as as and soon those to looking sunset the the BB&T get SunTrust brands, possible. and out they're brand Truist there

of that get given still So shown out ongoing are recently I of a we're these are quickly, brand the they through want going fairly wallet, to done. every they're the think I just working manifestation details deal think pulled that but time got cards the the the as move

Vasant, you the incentives? want comment client to on

Vasant Prabhu

Al. Yes,

So two on client incentives, I questions. think you asked

Our the was range beginning incentives gave I changed. expectations year. revenue, the XX.X%. you as we at it gross of of has in terms XX.X% of That believe range percent not a client to a

of you, as we high Al went as that so to that expect told through. very, very on, and renewal as we So range, even as we've activity wins level be still a well in had,

especially far what's now, are the happening meant incentives to As always respond be to right performance. to as incentives linked how our volume might performance, and

move volume play pretty over are next should the to incentives volumes. much performance with And quarters. out our that'll few So linked and

questions. So hopefully two that your answers

Tien-Tsin Huang

it, Stay it does. I guys. healthy. No, appreciate

Operator

next Napoli Blair. from comes Bob question Our William from

now is line open. Your

Bob Napoli

you're I with Hi, the and the that of value-added I growth guess A good then track, the over still growth services in Plaid, afternoon you and several Plaid thank value-added the weeks. And services, of is of performing? is everybody. adding on how rate guess just follow-up line last services value-added and what acquisition seeing on the in

Al Kelly

you, Hey, Bob, nice voice. hear to your thank

First resilient. terms to services, of quite revenue in excellent be tend value-added and these streams

the them up though some like certainly could honestly in and to And are of down, go but this volume times transaction-dependant, our goes clients. the value

also then those volume, time risk and and be like us out clients, clients for our because extraordinarily they're value-added in my include that we really or So CyberSource not obviously want things in the introduce sure else I criticality And the go of to our numbers and products. to is, with services. whack way them It's of to debit have not seeing data like some everybody remarks, products also of our times they issuing services. new two or both would referenced are that. down to valuable obviously of consulting exciting able tied that to value-added processing really they're other then make everybody is services where to an

Visa. an clients all gives opportunity So crisis dialogue us our make and the sure the can tools that have are that using to they from

with and we're not appropriate make continue clients value-added be that contact to using. we where to this, So sure going stay throughout may services' they to offerings in that close our introduce them

Plaid, As track. on we're it relates to

the know, through to end it we at about the Investor go year, by done about to that Day. you review, Plaid we as we we and as when As did of regulatory have expect and excited have we talked remain

really so don't time. them this of at how we terms In own comment it's I can't doing, that on

Bob Napoli

Thanks, Al. appreciate Thanks, Vasant, it.

Al Kelly

Thanks, Bob.

Operator

MoffettNathanson. Ellis from comes from question next Lisa Our

open. is Your line

Lisa Ellis

The minuses. pluses been your Hi, good very has voices. involvement the payments mange that evening, digitization you something government and to because good and carefully it its of hear in has

you're meaning of for through coming As differently new how your negatives or crisis to regulations you do this you how anticipate act governments Thanks. initiatives, payments with could respect any positives crisis, going new might digital business? the foresee, the out government-funded

Al Kelly

point, look with any are Lisa, are them just business at it that whether other going possible accuracy right it's digitization set and governments helps pricing first could governments. of at than helps more pricing as I believe might and markets otherwise. I not think hand continue marketplace. might governments think, be understand that this the by should transparency, think all, that it on you're I I also in get they with Certainly, interested that as funds in get, Well, the other on by they to

the tremendous there's by it I relates amount they provide. that far of and a Interchange, they than better bank provide of to fraud I delivered terms specifically to they a of servicing credit, the the provide, as in do, to provide to rewards it they to enable the provide, risk partners value they do services our think markets extend services and would to that governments the job say doing they buying

that amount those tremendous countries see of a the benefits there's individual countries citizens in the and economies So of see.

So this any like and very damaging. and would also any would that during I disrupt pandemic be say actions recovery type that foolish a would of potentially

Lisa Ellis

you. guys. Thank Thanks,

Operator

from Shirvaikar Our comes from Ashwin question Citibank. next

open. is line Your

Ashwin Shirvaikar

current detail. to the Al. you. Thank the Hi, Hi, Vasant. other ability use this exercise ask about factors to the in to wanted healthy, shape. all merchants to reflect I incremental are price and and willingness it improvements and but in the value Hope environment, you're pricing appreciate when not great

and but U.S. just now that they on when volume XX%. clarification and on process mid-April, at one transactions versus down the in down look the quick growth one follow-up both of other the then payments I is the is growth down charts, So metrics XX%, XX% operational look performance the

there's could different of was So explain that. pace a recovery. if I you wondering

Vasant Prabhu

one. Al, had in comments. versus will volumes. sure I my it can on that the And take I'm transactions question other payments I take

that is through, last like like and on home stimulus some are automotive, it growth areas weeks you not So, smaller reason that, at than entertainment to but it what is to people volume we have repeat of different April, more shift. two transactions. them, restaurants. back a it's prioritizing smaller and is payments improvement, in I'd Typically, as come penetrating and ticket because temporary we into growth we just the pent-up better transactions spending these you seen demand look deeply categories, think in encourage lower like are as go they're and of have know, The does

how what ticket higher people in items. So mixed hire is shift are money spending you're a seeing to

labs. a As result, has more than PV improved transaction

to long-term what it's what is the So that's probably trend now. be, but and what going seeing you're right seeing, we're that's not

Al Kelly

go transactions Hey, from to home, at they're coffee first not for Ashwin, you a transit, me your when some a working at gas work of transportation think and comments, pay all Vasant's your about you are just those go pay low let you and this people station get not environment. or a for mass actually add in for normal you to lunch, of day, your pay everyday kinds shop, happening ticket breakfast, you

could here huge in was we're of ticket So, lower driver addition seeing average transactions. you that's a change and but what of to the just, saying, costs, level Vasant why higher

certainly The truly the I've in is unprecedented global. other question you asked something was about pandemic an in witnessed this not my we're of period, pricing. Look, life where impact

major don't that that time of get the we're bringing of is Our was called right pricing. month this I cognizant ecosystem we ever it know as of certainly is in uniqueness this very do, for, be the not we've before, terms focus make now stability the it but we're into to I and is we times this co-release why sure normally done of which where our and to where think as much through going payments possible, April

most like, and this reality. they all on their how pricing be pull in including will it companies the I plans new think of much lever kinds reevaluating most given fronts, industries As

Ashwin Shirvaikar

much. very you Thank Bye.

Operator

from from next Our comes question Darrin Wolfe Research. Peller

Your open. line is

Darrin Peller

to think quick I those can allocation. but whether Thanks add but just some to flows, update incremental maybe offset, hear sure some start lines. plans what's about Hi, maybe be okay of yet, glad didn't more just actually per work anything not sort had there one just give that. we you would Al, of capital the se, enough off you guess but if a travel and happening assume maybe anything on of back changing or wouldn't guys. I your that? around I everybody's put contactless implications are that we're I there. think come positive up I'm the follow-up I about that services wanted some can you Can longer-term, it, mean, offset around us to thanks Look, digital maybe have we, then and if along Is to missed done doing those I guys. all buybacks pieces this, on together

Al Kelly

question, and first buybacks. the capital on tackle and question allocation I'll the So, let Vasant tackle

but we're big, spent and and e-commerce think I So are there here might big think $XX -- still the I there it cash Darrin, Cash, again, are on displacement. cash, be others, trillion that be to people think about I don't talking that from and want a mechanism, I joins moving it's the currency person to to and people catching germ-carrying one way. it person, that are actually realizing subject another is opportunities

they interest are interest contactless, of I to of that of So to displacement in really cash contactless interest move off, as of merchants, card going I long really basis tail people have lagging realize we limits, to issue to merchants hope we and need governments take to to enabled the raise think contactless that to we've acceptance, now jumping who cards, to sellers for on a if to talk here they'll it, the into might start the resisted behind shun seen and do issuers, going forward see really, cash. and terms who is or

for think the So, talked about fact that is think opportunity. somewhere I around opportunity, $X.XX spent the think e-commerce, is big that's a $X.XX Ryan and a a every move us. that's like dollar on e-commerce face-to-face when cards I it's into in big the on you presentation, I world opportunity world McInerney but $X.XX around Likewise, the of and big or world, $X.XX his or visa

are the they be in a country short-term to time. of somewhere. be earlier, going want want to to people they think mentioned the certainly travel, think I prolonged is to don't their be don't be, because period some until They on for want negative and there stuck and advances to short-term, said, some reticent that quite you as I leave then I And there'll in be

think of and globe full think clear, feel of degree and back So going travel on are the vastness -- earth. I the the that urge explore not world I the still a world is get citizens airplanes ultimately but to global to back of who desire the is comes this

the to Darrin these things offset how We say work, have not done one another.

is but of yet, recovery think more create change. consumer things referred the dimensioned I talking some are things do to sense relates how this his in interested the Obviously, studying kind these but as fully to there to this we of opportunities it not at before a might will permanent I as we're get in into in point think things we've just of changes we're grab. or get behavior the that largely some your about, that exciting Vasant offset better offset remarks

me on allocation Vasant answer your Let capital question ask to Darrin.

Vasant Prabhu

payment So, as long-term remains we course, as flows, first think to expenses, of including as like allocation, because extraordinary, we that have to with scale invest value-added and in Visa business we our critical end, capital even services. the to list in still we Direct, want back as the in growth much BXB the of need our growth line investment areas in opportunity we preserved new

would said, may So it but looking is certainly to some adding two there We months M&A in Al capabilities we're something our closing years, that's through one. and is as the part sense next remain forward very acquisitions, here M&A. Part where next Plaid focused line. makes over to on on and be be opportunities and

In terms of dividends, change been has in dividend no there policy. our

quarterly last In board week, regular our fact, approved our dividend.

those will no in are who terms you have changes finally, So of shares had soon. of And our we owners that in of plans. buybacks, get

billion quarter. in $X.X have second we mentioned bought back I stock my As comments, fiscal in the in

So through the first-half, back we bought billion. $X.X

So diminish little in lines particular buyers. pace. intrinsic our stock Since that don't a and in view long business of we our as month period, changing. of in that enhances our value, felt was not views it, ahead run secular see the were below of and we most likely March, the structurally We this one does any crisis our we long-term trend therefore trading and we're

We no been very there So do buyback watching We're our of that program. has closely. have liquidity. in change plenty

and and $XX instruments cash billion in told I billion you, debt. cash As we in we like hand, on then had issued $X

close we in as $XX on speak, cash we're So, to billion hand.

on ensuring commercial paper on is very markets. are cash our liquidity, adequate and not focused or our counting even access that we hand revolver to So

questions. So, hopefully addresses all your that

Darrin Peller

it's Thanks, helpful. guys. Yes,

Operator

next question from Harshita comes from Bernstein. Our Rawat

open. is line Your

Harshita Rawat

taking question. for you my Good afternoon, thank

GOs good as a then in greater is So of on you simply of Can digital an not is from e-com noted transactions. value to just benefits online, expand as seeing now? are and historically is those in you're usage new you people who for And already process reluctant the in sought coming very we payment I that out users tokenization habits avid what more were other or Visa e-commerce, in were cash being buy. to upon e-commerce if terms as a sees follow-up e-commerce based new as follow-up on acquired digital market We're demographics added it you figure the also are very views uptick services, coming option. have e-com trying who

Al Kelly

Thanks for the question.

So in that businesses an amongst and remarks about than country to gives think other I definitely country terms it suffered capabilities more from that paid that in opportunity to that company more e-commerce and e-commerce, that didn't of mature have have believe to as we certainly they omni have do businesses CyberSource seek I or that talked that differences one are more that our price. Vasant infrastructure, the countries opportunities countries was or of it. it did sell be to capability going us realize the channel saw not his

on fold can e-commerce capability it online. spent times, few wouldn't wallet not previously and that to having digital new the easily can tend front is front reality see we talked have I of as get that or you as a to people think that brings being for file. of be the Certainly, that e-commerce sticky relationships about buy card we've -- their if the into able

as there's of users do supermarket. want the It one like So, that is real talked e-commerce too have restaurant, get materially before a I to big abandonment and hope high, e-commerce and improvements to very do still seeing drug, just the not accelerates food improve the to people low, alternatives e-commerce. I've opportunity segments improve it never reasons also are rates still that. rate work where food is times have is they can those authorization number is we QSR, the too the up the in about and that from We're the experience to in a -- be experience FRC and because was and and and that we new of that to in looking does. fact

that seeing we're well. So uptick as

Mike Milotich

Jordan? question, Last

Operator

Our comes Eric from UBS. last Wasserstrom from question

open. Your line is

Eric Wasserstrom

hear thanks right? much. Great, very me Can all you

Al Kelly

Yes.

Eric Wasserstrom

Okay, great.

context us could how operating that withdrawn be done takes course, on puts conflicting the little you've in should revenue guidance, as know it's It about some there I revenue underscored, you and a Obviously, the going yield we way sounds of maybe frame got difficult the help like to and a you've the the but costs. on So there's is Plaid thinking in there, you've margin? dynamics there's be lot contain horizon. of to side, many shifts some

something? So, frame help might just like operating margin look what over is could within or some you range there some way time bounded or

Vasant Prabhu

Sure.

can of get you yourself. sort to it think I

single-digits than to expense flat, So, acquisitions, still our acquisitions, you do be. We're it reduction low excluding and including going sense some expense be second-half we gave the hope a down is of on we to it will that. what in growth better We be said would programs. working

a interest have remember higher will income be down. you going because income up if be non-operating and and expenses So, idea, non-operating of will our expense general going interest higher,

know sort So, those you of lines.

depends So, it out. on where all revenue comes

So, -- you can know the are, it will you being. model revenue you decline, will the expenses you where up know end and what margins tell then

impact. an revenues your revenue quarter, third in single-digits, in are we it what your this declining growth will than expenses that, of a margin function are is objective, expense As growth. have is versus of likely margins but are an as the said, always a but the outcome, The they're not as more we've think then declining low your

are. to terms In revenues, to up I most of what date as information trends the the you modeling we've mean, given

it, V you to So, where is be it we like depends we going to more across people the steam recovery are all it at a recovery, as we and trough, shaped and does slow from think recovery and pics what is recover to more trough, on it recovery that of then is think be be, to sharp it look or nature mean vary is will a start another when the as and you and do going going U is about, up get and talk be varies start recovery categories, this starts and it some you I where then across some fits a saw, it it's stabilization, where will shaped -- stabilization, countries. and you some do as

of We'll of here, So any to and why we've you forecast. see. chosen there's a give which not variables specific kind lot is wait

Eric Wasserstrom

for Thanks clarity. the

Al Kelly

And like to with I'd thank us you joining for that, today.

free any have you Investor and team. to or If feel questions, call additional email please us Relations

again a have great So evening. thanks and

Operator

conference. in today's participation your you Thank for

time. disconnect at You may this

Visa (V) 30 Apr 202020 Q2 Earnings call transcript