V - Earnings call transcript Q2 2022

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Operator

Welcome to Visa's Fiscal Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded.

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

Now I would like to turn the conference over to your host, Ms. Jennifer Como, Senior Vice President and Head of Investor Relations. Ms. begin. may you Como,

Jennifer Como

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

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

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

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

For release. me non-GAAP and in available measures disclosed to over are in call, with GAAP related Al. And this the financial the call information today's that, earnings reconciliation turn let

Al Kelly

everybody, and thank afternoon, joining. for you Good

attack is I Russia. X Before with this seen Russia's the to was the promoted and have X Ukraine Ukraine. situation firsthand want recognition and her by Head us. Russia to ago, was I Como's I first in start brought her want its last in and years our both on colleagues position. acknowledge work months the Jennifer by that briefly people, addressing pain call a Ukraine including about About Relations, Investor very jumping which of to new earnings well-deserved in, over in of Jennifer

volumes, and of of and is inspiring, on credentials strong military. with the focused quarter note as lingering Omicron, QX. transactions that supporting is versus second drove X ago. transactions invasion strength up years up XX% resilience to And our travel-related of colleagues grit Cross-border versus Overall, very incredibly to versus and X points of XXX% volumes, the are X performance. Ukrainian Even impacts X the cross-border Ukraine versus years them. The years We ago. Processed inter-Europe, from it's were were was years XXX% important rose ago. XXX% ago, PB excluding X bravery,

war XQ the to quarters to strong been a goods, for credit from categories X-year to XXXX drug, quarter. retail of XX after In in Omnicon the States to other and parts no and have of X- for terms big U.S., and improvement cards, and noticeable index X At X supply stage, has X-week than in the impact due In volume in picture, years QX the the was percentage in inflation, to January in QX the we volumes, terms to the travel, be QSR index restaurant, XXX seen robust. food looking in short in December this payments at now of saw continues impact specific relative the chain point greater spend world, United When a issues Volume we row. -- stable Ukraine. growth of in or many fuel. recovery and the ago

where X debit a over were As 'XX, stimulus a reminder, in is fiscal growing quarter distributions. there

indexed backdrop, up credit categories between revenues to $X.XX, as spend was PB are representing prepandemic products, XX% and non-GAAP grew years XX% Visa's X Across Net line. strong. indexed Even year-over-year was XX X/X XX% X this nearly and all ago, and over are very performance XX. XX%. Against EPS debit the to X remains continues trend above XXX% of over recover, -- XXX

and new there's years. over is levers X across payments, opportunity our is our As business growth This we reset yielding world will a growth have because and still revenue look of our pre-COVID the services, value-added expect Russia, excellent due to but still around accelerated ahead, consumer strategy ample we results. coming the versus flows

in at and that the rate. strong highlighted continued there XX while X.X cash grow transactions. to cash In payments, we QX, across payments credit, Latin this million debit at X%, First, saw world. volumes more continued America, volume from transactions and we Year-over-year, shift Last quarter, debit the billion less displacement a XX%. in cash Visa payments around were Cash debit continue displace in payments cash I consumer trend and to volumes grew quarter.

total driven engagement. volume. a quarter, it it by XX%. Additionally, XXXX, in In shift. QX, deepening was XX%. XX% acceptance similar experiencing and credentials CEMEA year was adding Growth consumer was and payments And Last is is cash this full year of in

X.X Our card to in X XX% the growth including recently year, increased States. in over credentials billion, X% up United

locations, side, like acceptance million merchant players actually Square, the over businesses million. Stripe including the we have number behind XX $XXX small is and On

Pacific seen We strong performance in recently our Asia up regions, have and America very location XX% growth Latin respectively. and XX%,

more Visa. continue in strengthen our Europe, debit to Fortis Europe, overall their the credentials million double announcement of nearly me regional helped for We business. which Across multimillion a consumer credential X%, opportunity. in previously Belgium [indiscernible] a Let with progress just contributing X historic deals highlight credentials announced representing grew to In announced examples few we each the than since Paribas bank, recently payments. past X BNP is quarters, of issue rate the with by

of business the also the largest in our Nordics, Nordea. with banks one We renewed

in to Latin acceptance is continue saw Europe -- potential strong were first open initiative Visa Europe up partnership, with to payments and We over we front, million Safaricom XX by million joined renewals has Africa. This a for In manufacturers South announced M-PESA fastest-growing quarter: acceptance in digital bank, estimated covers example their America, to this together deal, charging. signed growth, to recent in financial with partnerships Vodacom credit partnerships Brazil's Brazil's largest with Visa credential partnership pioneer payment Group with One the source. electric year-over-year. highlight Africa. we Africa, and XX% fintechs working Vodacom Seguro, new credit Vodacom new entire Two is Through XXXX. flows and in with charging in United portfolios. issuer digital issue Neon that this of we with services areas the interface of the points represent X in On for this mature what Africa Porto up payment and through previously portfolio In renewed markets. vehicle In electronic Sub-Saharan company Pagamentos, cyber won clients are and utilize quarter. acceptance the exclusively third customers several one the and million and credentials, deploy States, will Direct Visa prepaid even XXX

partnership. and have First, renewed recently USAA long-standing Visa our issuing

agreement M&T resulting their as including partner, completed United. with Bank their acquisition recently extended People's migrating business issuance the we relationship Second, existing from our of

another Over X has example the activity increased, this grow of and banks Visa to our regional partnering successfully clients. merger years, is with past of

was U.S. business supporting by U.K. XXXX retained markets, A affluent agent the which the are government of spending an in consumer are Treasury's priority This the including QX, is above federal in that to vector affluent of card Finally, deliver U.S. digitally card of Visa-branded is manages credit to payments and XX% our goal with and component the a program key us, growth financial program. important several particularly the payments we the debit XXXX. In attractive for U.S. well customer. key levels cobrand cards,

previously been Amazon reached Amazon. well Visa This agreement innovative States Visa cobrand a in the XX% is as all stores today, new with National Uganda, as of commitment of have United Visa program Our customers In X X joint past to X group Visa X agreement XXXX States, to issued Klarna. Airtel, have pleased a cobrand a experiences card to enable were members. from has space, to cobrand expanded In Emirates ways Social to future. XXXX. with we the They cobranded In million new relationship a NBD, agreement program by the installment one with the Airlines In partnered payment continued was QX, U.S. signed AAA, now crypto. product and ensure quarter, announced long-standing collaboration Security the installments the on Etihad in over includes beneficiaries. In the longest-standing have partnership Chase a nearly XX United to And Europe with India, to with from global also cards their million cobrand XXX top nearly operators we the to with CEMEA, it with U.S. we pleased have our introducing cobrand we deal broad with to with of million with global XX-year cobrand to globally. and the into potential Prime have customers. just pay also sites continue long-term renewed in the work the cobrands our Rewards world active we globally governments Visa. space, crypto at XX leading Amazon Visa's cards opened its of with and that issue few Guest, weeks the technology million waitlist in recently a the initiatives and a This we CBDCs. Signature Card for banking loyalty has they cobrands partner, announced relationship. XX on mobile up where of Uganda subscribers. premium to largest Fund an we're renewed Etihad In ago, acceptance And the and top

to The leverage concept CBDC is the CBDC global to help as selected Brazil's small and were seeks a we BXB financial inclusion. quarter, This drive that challenge. access businesses finalist investors solution in lift

continues million footprint significant Norway Turkey, merchants. consumer Italy, with first In over engagement Visa payments, To And Transit We to tapping front, Tap Target the XX% processed million retail of summarize, set deepening bringing for of transactions tap to and around the we engagement to and us number to records. to year. across is Pay are of one ride last ecosystem Ride penetration, players enabled travel XX world, penetration cities globally and scale Visa U.S. crypto installments payments. Tap including tap to ways has innovation versus best pay growth. credentials fiscal Thailand, of there and in XXX XX% authorities. XXX We to and continues our transit the acceptance for become pay to tap XXX merchant is grow to accelerate over market pay Canada, to from marking Switzerland, of over On Visa to all the to first has tasks. the the second habituate face-to-face enables by 'XX largest the half Japan, opportunity States, the United

new to types. Now XX% and What's QX broad-based relatively revenue moving XXXX. had of segments which spend across more is flows, our XXX% QX, recovery was over of In this payments volume commercial in growth.

first flow added digital a Hong with reporting. business management, daily America, BXB carded to countries. global Australia, card One, commercial in footprint. Visa we virtual and enable middle manage movement issuance, previously including for and our BXB the Netherlands chosen reconciliation first Preferred, the platform, management Latin Visa to across modern rewards and they banks progress and spend And businesses in cross-border BXB borders, in solutions which in in for cash Connect world. card Visa Airwallex, Visa startups has In Recently, enabling Angola, digital launched spend; two commercial help continues to to designed of Commercial global its for States, expand two, manage BXB make half virtual businesses. improve its Poland. Singapore in the announced the payments fintech, Umpqua In card the platform and a U.K. cards market around Tanzania, XXXX, will on Bank money Pay, Uganda, corporate which Commercial carded front, to Kong saw On Visa Thailand cards a United easily and businesses tailored introduced programs we the time card the X and payments U.S., with for Tribal, Visa help business,

Transactions Visa in of market about XXXX. second Vasant XX%. grew fiscal for represented Now XX% transactions turning speak the was our second will this, our Direct. Visa more but Russia and in largest about quarter to Direct

with even So and of Direct the impacted without growth suspension by be will -- countries. -- Russian use will Visa ahead Russia we operations. see the business in Russia business, the many But short, driven by cases

still is For opportunity, example, expand PXP, the accounted and domestic which Russian business we new continue majority large for to of markets. a to our

today, PXP use PXP other largest Israel market. I'll inaugural We remittances. partnership launch cases Bit, focus payouts Visa in our in the on the Direct case soon with for app and in X use will

gig refunds seeing in economy, partners In we Payfare, industries travel, with and Booking.com First, number of up a launched that payouts. the loyalty XX% transactions as enable Visa Visa has fintech gig payouts, they customer gig help platform serve. see for added marketplaces and X -- momentum to to has year-over-year. are a X.X Direct we're with we Direct Uber, customers, commerce million such to economy million In use players. And DoorDash, partner, to enable Visa over real-time facilitate digital its their experiences for payments including Payoneer, Direct and payment Lyft workers we cross-border and leading

cross-border which higher a Second, Direct are or PXP global represent significant opportunity. Visa yielding remittances, transactions

started and are the XX% this fiscal customers Direct with year-over-year. their have with X After quarter, service international launched they grew U.K. which announcing platform, to payments corridors. cross-border relationship our quarter just over XXX getting While nearly we now over fourth Paysend, SMEs, from million transactions an card-to-card serves and XX,XXX U.S. in Visa

for source the in Cooperation Bank. digitize followed country region. This the U.S. past the is countries Council we the remittances added UAE quarter, for largest Gulf to the help more Arabia top than according to for $XXX account the remittances. is outbound the source Altogether, partnerships billion Saudi by several World in remittances remittances, While second

First, AL Muzaini largest Exchange, in house the Kuwait. exchange

Second, cases. for Kingdom relationships against powered agreements Saudi net key sum, early of send by Enjaz, market the to trillion to Arabia. the and ahead. Lulu progress Lulu in And of Bank $XXX numerous room leader to there new enablement million and UAE [Audion] app money tremendous X Albilad, and LuLu of Stripe, and and the to but excellent growth is have Direct payment in existing to Visa made International with for markets remittances we've accelerated to both International geographies opportunity, globally Exchange arm cross-border. partners across the signed use Money deepen enable ongoing Network the new third, users expand flows in In remittance

revenue XX% me let to Now of as over well. which had move value-added growth services, QX

customers connects acquisition more enables single Europe. Tink to of open risk X,XXX platform verification. closed which move Tink and than customers its use and aggregated First, to accelerate that of XXX such as data bank we across the a Visa our that reach Through is over a banking innovation. banks insights in financial European recently Tink. platform and cybersecurity and and open smart investment million create access resilience, sustained money, fraud, infrastructure will banking adoption services a reliable financial for brings help API, proven account secure,

in value-added me some highlight progress Let other services.

advisory go-to-market our seen I covering clients and committed We've of of Last and interest consulting from announced already analytics. currency launch Visa First, product quarter, have globally and hundreds the engagements specialized crypto XX their strategy, global plans. practice. with their digital development

Tokens in in In risk Second, issuers a and more reduction led this across present net X.X X,XXX million than have we markets merchants. increase over X.X at identity now card point XXX -- a and approval net crossed the payment in payments. past XX% mark authentication. in have rates fraud to X.X rates quarter token tokenization, billion card

in XX% versus XXXX Our first Manager, key and about the Risk Authorization transactions XXXX. more risk solutions, Advanced Visa screened Visa of half

milestone onboarded. added before the our seeing merchant X which gateway transit about CyberSource, in key has and Thailand, nearly a in I acceptance, half spoke in the considerable play the capability transit Italy millionth first account could crossing Japan, of CyberSource, others. XX among just progress, Third, role projects in

the to a bringing in helping So to services our bring revenue -- in represent compelling clients payments innovation summarize, value-added while diversify our way streams our to ecosystem.

connectivity power infrastructure Our more and of our traditional pay is and move to ways global network providing types through to payment money. newer networks

Our is brand strong.

networks of expanding. is network Our

and is business are passionate. motivated and our well Our people performing

over in turn with will And efforts to growth power it years We expect to Vasant. all let that, the our help me accelerated come.

Vasant Prabhu

results as travel, Europe, non-GAAP was up second impact up XX% index, started GAAP within net fiscal in China, XX%. reopened, due index excluding borders dollars, resumed of quarter Omicron a growth quickly Al. February Good afternoon, low A the In net X would and in EPS revenue robust most Omicron revenues the ago. be. strong X.XX dollars, constant were Russia and X EPS faded. in impact Thank points domestic XX% was were highlights. constant Omicron, hoped cross-border Omicron Non-GAAP approximately and from very quarter jumped Despite everyone. EPS years volumes as stable with growth XX%. for XX%. very to strong levels. XXXX, and X.XX Border at pent-up Ukraine, January. has U.S. travel you, points lifted our ex to it In demand versus was restrictions Index XX remains was than up March. XX few first of payments volume at growth the high. early in relative on higher in pre-COVID international Global short-lived X as the cross-border January fall versus remained to The and was transactions travel was recovery The to XXXX impact we down that key

weeks of March in spike in Ukraine displacement and Ukraine, were the Adjusted XX. by around transactions there to to Russia volumes from cross-border in no suspended invasion. the Russia in caused or from XXXX The mid-March, relative more index first Russia. After operations X Russia saw we March was due of the travel spike and cross-border a for out cross-border

on not travel of are result any we Ukraine. as other invasion cross-border of far, Russia's material corridors a in So impact seeing

XX%. new services, growth and engines: all grew well flows X consumer payments; over Our value-added revenues

acquisition. During back around of On an $XXX. we on in the closed -- quarter, XX, we billion Tink March bought stock $X.XX $X.X price at average the

Russian our terminating best supplier This deconsolidation and and of suspending from estimates second resolution settlement for the Russia. revenues the balances our operations reflect our expenses and and business. quarter of contracts, impact Finally, of includes balance client P&L all sheet in

our GAAP entity. our to charge in Russian have in earnings, legal and employees to net related and Russia Ukraine from a support We our adjusted expenses assets items X

payments year-over-year constant global details. dollars, on versus credit as to Debit XXXX. continued to was the up Now and volume In spend remained XX% spend XX% improve. resilient

the improved at versus XX% volume payments Excluding helped grew by than better and growth but China, which stimulus or than X% very over versus consumer. to of the impact X affluent XXXX. XX% XXXX, U.S. growth volume last first year, XX% grew the grew payments XXXX up total Credit points XXXX, XX% remained strong XX% quarter. was Debit reflecting X only higher was XX%. XX%, points year-over-year,

spend fueled recover. A its digitization. above As travel, to dollar trend and XX% grew Al America by the above trend few to line, indicated, as XX% XX% accelerated excluding XX% line volume, since even ago, COVID debit the quarterly level Relative highest payments above volume, the cash was e-commerce robust spend XX% XXXX. from continues Latin at performance XXXX highlights. was digitization pandemic. presence is Card-not-present was XXXX X well pre-COVID indexing International XX% higher pre was cash up XX% well client wins. the card-present card XX% year-over-year above and U.S. benefiting constant region, and levels remain regional and grew grew years China, with above excluding XXXX. and across than

CEMEA XX% year-over-year cash led and XXXX, client by than higher XX% digitization. Our grew wins region and

Excluding Russia, than the CEMEA XXXX. and XX% Europe XXX% year-over-year The was region higher was XXXX. XX% up over up

XX% XX% Following an XXXX. we U.K., markets. European in recovery about a Ex were most volumes rapid grew January, saw in Omicron dip year-over-year and Europe

up and XX% remained at up up cross-border XX% were XX% stalled in recovery XX% Asia XXXX. declined COVID levels. XXXX relative within our the December. volume tripling by up travel, Pacific, has were of at almost points remains year-over-year XX% above XXXX. year-over-year Asia almost trend India card-not-present from across Cross-border and Due of and XXXX, excluding process and has indexed travel-related transactions grew of intra-Europe, our transactions XX% Cross-border a XXXX. volumes. strongly, Constant year-over-year e-commerce and XX% Global India dollar region, up Hong Kong market growth, volume, XXXX. strong, recovered well excluding excluding year-over-year restrictions, year-over-year XX% XXX% excluding since versus over spend, XX China, to XXXX. to fueled XX% pre-COVID Asia, up above fastest-growing XX% been weakest most versus Europe, line

There's to the Middle earlier, to As Omicron cross-border in Caribbean rose in Inbound at the levels QX. an and I about XX America, index XXXX. March. for in dip are mentioned Many which to now. to U.S., sharply indexing parts to driven the January, now time travel travel XXXX East been come to in after Latin corridors XX XX XX the one of XXXX plenty of only some inbound above indexed to important recovery has corridor relative

XXs, Most in pace Japan, high opened, trajectory. Asian QX. both Asia outbound Asia and the and Taiwan. borders recovery from except place driver will travel a indexed now of in and be of are in to Korea key remain future in and the inbound for China restrictions The

a payments to the Moving growth financial were XX% now to quarter second nominal able revenues quick than review early revenues Service collect volume. and of in XX%, results. in bill We March. Russia grew faster service through QX

in helped business XX%, Revenue services XX%, improving As by mostly to volumes each second was in led by of International well to utilization rate payments also select by grew Revenue quarter, revenues as as growth offset revenues high consulting, versus up and helped growing currency grew nominal X were pricing changes. travel were volumes cross-border excluding cross-border transactions. strong mix. by led XX% volumes, and XX% modifications, revenues the such, partially the related we domestic Service benefits. card transaction X growth revenues recorded intra-Europe. service benefits. continued XX%. growth across exchange XX% due and transactions the was well was processing quarters Data and almost engines, robust processed increase Other of Consumer marketing below by Russia. revenues growth growth our volatility data increasing over

recovery. a grew operations. suspension BXB a Russian by XX% impacted Direct the in quarter lapping strong carded and of last and by U.S. Direct Visa by Visa driven was growth flows New transactions year

Visa transactions. international services, due in our cross-border up versus the well business other payouts. as as at Visa and better businesses of As second or for in QX the grew We in into end and large and and wage revenue being XX% as well largest business use client by losses a of card growth portfolio recovery Commercial Revenue identity Al of select expenses XX% benefits grew strength $XXX actions. e-commerce, of Non-GAAP from some mix remittances, Direct consulting Client the setback XX%. gross were earned by fast Value-added and to cross-border categories. timing, the risk expenses drivers cases business indicated, the driven and XX.X% is was marketing deal an is such the but incentives for QX. year-over-year, ramping the by driven as diverse revenues lower our of include by markets and BXB solutions. million. international markets XX% service of growth operating across with of of other growth was small accounting Growth was led access grew XXXX. continued pushed market Russia operating recorded volumes pricing equity of spend acceleration as BXC deals Direct, faster-than-expected recovery expectations. This This investments GAAP was XX%. unfortunate

investment Excluding $XXX non-GAAP was nonoperating losses, million. expense

up relatively ago from on was rate April $X.XX, debit debit quarter. stock up U.S. Debit payments capital a performance of payments of in share volume were with up, $X.XX, markets and was XX%, XXXX. to Travel-related transactions EPS our cross-border buybacks, Russia. was per the within with the XXXX. are spend non-GAAP decline index grew XX% $X.XXX few of Total XXXX. cross-border stimulus cross-border from we world dividend was first lapping at grew impact versus non-GAAP A growth in Europe, up of X% small robust Processed Including around loss through EPS were major Our and XXXX. year-over-year of returned XX% the transactions up GAAP growth quarterly up was year. and to now over volumes weeks trends mostly the credit exception XX% comments our $X.X is up XXXX. credit nontravel shareholders volumes and a with about XX%, to April. was of in due XX%. basis, to we Russia. volume XX% XX payments On relative volume, the our These XX% over X XX% tax XXXX. versus index up the excluding with year-over-year, a are billion no dollar have XX%. in XX.X%, where Card-not-present XX% Constant year-over-year, X consistent volume March The trends last CEMEA up years XX% U.S. this

Moving now fiscal for to the outlook of XXXX. our rest

Russia. business Russia as of volume we Ex-Russia X by stayed past XXXX due was halves the for suspension reduce and each The distinct domestic X about and volume year to of a be our Ukraine, impact to XXXX XXXX, in points. process to transactions Just Russia. the half Russia also by index transactions to will volume relative XXXX. robust X process of The will will due negatively growth recovery, X year the X a halves, stable X%. domestic since our cross-border and in will point second impact did revenues XXXX has payments not on index to quarters be under

these are sustained. trends second that assumes the for outlook half Our

While back. recovery half cross-border with to to and extent important even line the fade, well we our XXXX pre-COVID that and relative assuming business. are spend volumes. and strong largely growth inflation, no rising pandemic there with is high In second remain chain the lap there volumes, continue. above disruptions, uncertainties no evident driven invasion impact and everyday cross-border line, as the rates supply Russia effects E-commerce created effects Ukraine our by on Ex year-over-year will in remained we're interest as strong 'XX. stable card-present rates assuming growth payments strong will domestic is by we Ukraine, corridors to at It variability stable to are processed other we spend, note to on global trend of moderate and transactions fiscal in both year the has payments spillover relative and expect XXXX ticket the comes which small this

to Russian intra-Europe Including put the the we ended that we our recover travel would the travel of where loss levels. despite year quarter, ex XXXX fully above of levels now by fiscal intra-Europe, second Given business. cross-border to end XXXX expect cross-border

milestones these revenue points. third end contracts, the Tink reduce quarter, by net some rate Due deals in from the rate revenues. to moving exchange point first of to approximately that This dollar at third are likely revenues between third drag to higher of X.X the and will With net quarter in The around add some expected grow run the & assumptions, gross revenues. will which certain growth constant key includes quarter has strengthened Currencycloud, into and upper will expectation the nominal incentives half mid-teens dollars. the X.X XX.X% to on be XX.X% the achieved range

expect and non-GAAP reduce expenses grow Russia operating nominal the to almost added likely points from growth and constant dollars mid-teens, expense savings X by expense from expense X.X of about Tink. rates in Currencycloud in points. operating including We will Exchange

be be with expected trends is fourth range. the the tax quarter. line Our in XX.X% third rate to XX% this we to to in point, quarter generally expect At

around will are expected year full gross incentives. in of to rates no in Exchange Currencycloud. teens outlook as growth nominal second Based our XX.X% XX.X%. XX% update and date There Incentives we fourth always, will including to net Tink from a X.X by change range down results is on year half, to outlook for July. constant in expectation approximately expect revenues between dollars As of the point drag for quarter the growth points. contribution high range, percent full we to our likely revenue in rates and our X

added points to includes dollar operations end points and growth operating almost constant lower expense savings Nominal from non-GAAP growth stronger Currencycloud from of This be at of will X dollar. Tink. of around and operating upper expect We X.X the expense suspension the mid-teens. expense Russian the due

Our will year 'XX is strong by to full Ukraine invasion year the the to range. from bottom very be and uncertainties expect interest we rates, of year exit growth. and the expected top line XX.X% caused inflation, our rate Despite Russia, fiscal tax in of XX% above-trend be a

Al reasons about we outlined, the sustain pre-COVID enter which post-COVID I of remain rate all summarize for will levels we again. we As the era, can a growth confident

becomes domestic an payments, First, merchant check from acceleration and globally. consumers businesses and and cross-border digitization across both away cash pervasive as for

range transfer markets. Second, wire our of penetrate total very broad cash, new check flows new use initiatives cases large and acceleration a as of addressable displacement with

services services, growth offerings. high-teens existing value-added from sustainable and both Third, new across

growing and new consumer a part services As mix, to the revenue value-added continue become our rise. payments, of larger flows sustainable growth will faster rate than

will invest turn to in continue that, required us. extraordinary of opportunity back ahead the to With growth I'll and to Jennifer. are capture this the capabilities We

Jennifer Como

Thanks, Jordan. ready take we're with Vasant. that, And questions, to

Operator

Rawat from [Operator Instructions] comes question Harshita Our Bernstein. from first

Harshita Rawat

want cross-border. ask Vasant, to about I

XX% So happened, cross-border of would of to rates. had not kind with historical at the go volumes been XX% pandemic XXXX if have least run your just levels, you the

growth? has few it is travel China, have but specifically been levels, these kind for the to important clearly, probably Asia, of of just that solid past comes travel, XXXX how returning the eventually back My pre-pandemic Now months. is going rate question to cross-border you to not

Vasant Prabhu

that is great a question. Yes, Harshita,

last that, the some travel the Japan, that, and also and can on in generally, Kong you China restrictions exception, Korea else around Taiwan. And told anywhere that Hong want we X things being list. borders keep pretty countries you the X Other freely call in know, One remained you world. than to I true. open, have include world As in

some need Some of them need tests, even tests. don't

So true. that's

demand as summer have bookings, on very second travel high. heard indications you cetera, for And The remains is et very been early people other the good. from pent-up

were how with sort even certainly, have our recovered. so we've things far surprised bullish of been in fast we So calculations, though

you we're that end quarter the recovery is as a indexing the of some As At robust. Europe. is only March of optimistic U.S., recovery pretty out left the been point, which as of on very end has track. at -- second XX of inbound and still good still saw, of the January, after the recovery in to this There's

depend things on coming those to have levels. I Asia help get think you're should the get back will fast where far right, back. we been So us how And how XXXX certainly prepandemic will absolutely we and to,

under in cross-border depressed. also and an part still Asia indexed Japan, at of important incredibly Asia, China second parts is XX Taiwan important it of are quarter. travel. the Korea is Asian

and Certainly Australia getting are and recovering. mean, et way be coming India, trends see on is Asia, in right. Asia. you're China, Indonesia, will of fast. Asia we'll have I New picking XXX some would Japan you to all Thailand, parts that, seeing in cetera, depend travel we'll good We're remaining up on travel update and Asia, Zealand and really wait which big And Korea, components to back. call. like the the next But on into the

Operator

from Ellis Our next comes question Lisa MoffettNathanson. from

Lisa Ellis

question follow-up call commercial a a on -- cards. had I

checks feel that this commercial healthy at so piece the wire can and a out XXXX are of other the are pretty into get converting the talk called you bit initiatives there. of you've commercial, still maybe accelerate or a running your got levels, you maybe more business I think about should, much in how card payment I attention volumes it broadly, BXB like digitization underway forms given to the little payments of cash XXX% is cards. of you these Can talk growth and more doesn't there and that the

Al Kelly

$XXX Lisa. This the space in cross-border is then about trillion BXB in segment carded of Well, $XX space. you, and $XX trillion thank opportunity, is trillion a the which

focused So get. because people volume. And number than in be focus obviously growing commercial commercial potentially element of trying us getting gaps to We're are addition a from space hold that continue in corporate on commercial all a has that are provider in cards. space. consumer issuers traditional to we that the this less could we card largest travel carded the are carded also of purchasing the cases back use the the fuel issuing cards also are continued our it's grow acceptance of the cards, we're lot cards on the BXB volume space, of and which There number And already very more acceptance. issue and to to

get strides, back footprint attractive It's faster have to to of yields. ways and time which more the go major and normal big of factor more part more has acceptance believe consumer travel ability it network pace very one to having a pandemic the be can side. is to We in been broad-based to at more than happen so that there the that that a making network, commercial will terms banks Connect. -- important and mirrors robust growing to will major prior we generally obviously, of by that our where faster level was are get BXB continues and be BXB quite an more grow thrust be the in obviously, at having is has our fairly a still we the that involved on focus but And acceptance transactions and footprint flow the focus business grow that than continues -- has there is returns. countries the it on this post In space, we we once It's COVID, the the and more in the it network cross-border when there's point. to our type driving out transaction Connect a than business. It belief And our to consumer quickly.

try opportunity the I continue us space, to going of enormous things some on are that which drive an those focused So for very, believe we're to is forward. important this very to

Operator

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

Tien-Tsin Huang

ask planned what expectations. it far like so With incentive at looks broad-based about. Thank is results, of to is want the which your very your outlook, much. you strong end the you Very client revenue I exceeding low

performance Is very it little sure I more brings with something Or between incentive is the that? that understand relative want just complicated make I there it than and So pressure? it to upside the X. revenue the

Vasant Prabhu

than one, improves it's cross-border the mix, strong No, this the we in comments. Tien-Tsin, mix but That recovery, expected. I it things, with was our was of expect still Number stronger expected. X than our the in lower even than is that recovery, our cross-border we saw had prepandemic. good a recovery as said quarter but you We'd was stronger

the affects So mix percentage. the

the the know, When just incentives how numerator at a the the end cross-border grows without work. And you came percentage percentage, is why range. our the disproportionately, lower many helps percentage of the denominator in As that given commensurate of and and increase that of numerator, that's denominator. grows the nature

factors in timing always there have, incentives renewals, achieving milestones in factors, timing The linked some to are timing terms contracts of we pushed the of incentives certain into those quarter. is third second that has when reason as that and recognize

So upper the above we range, expected end of to so quarter the to third run speak.

be to still For you. we we range expect the full the in year, gave

timing. a it's So all by driven combination mix of and

Al Kelly

those with will add, we get for talking you this, or was in art while. that And about science will done. quarter deal a long by about, why do timing the and would us about border. mix, X end of point But it the a performance to of make followed the I of of about the outperformance mean the to going happened across times, largely and dealing assumptions launched timing always take get of the I about Vasant thing how And when this came Vasant the during we all make this right that us Tien-Tsin, at odds make the deals thing good make a in just deal. hundreds lot forecast. I a course is that job, there's explanation only forecasting. that year. get migration assumptions deals easiest of assumptions to the that main then gave and but of We a we driven low getting The think factors not we across then

Operator

Our next Sakhrani from from Sanjay question KBW. comes

Sanjay Sakhrani

point know you to some the overcome help Maybe and the of EPS the half offset Vasant, impact could from seems you just spoke through X obviously, And with that you're trends. in little I Russia, that impact second expenses able just some maybe Russia. cross-border flow the can us for of you it through bit the through a mentioned there's like that to parse that. us? percentage stronger to

Vasant Prabhu

Sure.

is So it a revenue impact Russia. from X-point

the been for the dollars, revenue expectations a are X If We much be. what revenue upper for our gave that. would constant impact end what Russia, it in you pretty quarter to So that's hadn't points sense mid-teens. you'd added to have of

being it's strong the to So of that. business because And you Russia some stronger. degree loss cross-border by it's despite still is the as offset said,

helped go expense impact expenses business, similar pay a the going We or to processing pay that you them. do Russian for services. expense X transactions. Obviously, have other issue provide on We marketing you're the bunch in side, similar longer away. a Russia have Russian by there and when We processor to are main mid-teens used and away in growth no expenses of

personnel-related Some We've remain. Russia roles. our in other commitments about will employees of Russia our to costs in made some

don't those So go all away.

the half. Probably, in to range that X X second reduce So our in of does points. expenses about the

Tink there do last and in, X we the that's now which coming have Currencycloud about and not other hand, On year, points. were that are

about finally, goes direction. expenses And of rates it of exchange the then So and to will tune points. washes in X.X other help the sort

parts. those all So the are moving

points would been been in not have had expenses probably if Our -- X or higher if not suspended. X Russia had operations Russia been

Sanjay Sakhrani

Okay. correct? you flow-through outperformance, more Great. And from cross-border the probably get

Vasant Prabhu

because partially. business. Yes. would it Well, Mainly, the with higher-yielding be go to tend lower it's incentives and a

Operator

question from from comes next Our Darrin Wolfe Peller Research.

Darrin Peller

despite Russia, what's your see organic currency happening increase and guidance small in in help degree constant to year acquisitions. it's Listen, a the with Ukraine great from for some full obviously to

And potential to seeing make and be to sure on to and you and what on gives from that And confidence flows you sure little detail kind pandemic just so at rates new clear, of the go the that achieve? of services Russia well, you're what new for should grow do growth opportunities has couple a accelerated follow-up the to just of Just highlight it an check. some getting Can mean, I'm the just with the there? into a a able you more the lot want to of rate, the well. includes I reiterate still investors to then guys growth right? as impact we're year double a you be full exit I asking continuously

Al Kelly

trying terms convert for business, going Well, of our is Darren, with I we and fintechs, take sign last of in to partners. couple out biggest years business the thing, traditional me think increase off the didn't

phenomenally have acceptance world. footprint our also We of the certain parts grown in

the think because seen So suppressed has, that we -- many think accelerated the as as that's I a basis to that going of And you cases, e-commerce, pandemic spending. flow-through people's come help the we sustaining growth the through taken card-not-present you'll model of that various pendent has of itself I actions the then and the well. that's that the going-forward think a took. out pandemic there's we usage haven't But see have on in actions in flow fact I drive of

risk And So to add then, service. Visa I to of taking continued to Visa ourselves have our that. build think like we're going and continued advantage grow consulting We've to we tools. see certainly, to cases Direct. use out We've things our identity continued

that that we've I made flow my the of So of hasn't flow-through the that the seen XX the over lot I months-or-so is going lot investments I by a environment, when -- pandemic. view kind market of we've full think we normal the see been driven of through think a you're come the to that to the investments more into a world this start in as odd And it. think of last operating

biggest on the I you Vasant, address question factor. that's it So guess was to Darren's want Russia? do first

Vasant Prabhu

Yes. Yes, Darren.

was. of it incorporates the half. Russia Our strong the the second full was as as in year outlook quarter second It fact impacts the that reflects

the expect you dollars, the teens still half, had in half, on first what the and to be high look in half when growth first So the second we in to at despite constant Russia we of impact the XX%.

Operator

Shirvaikar Ashwin from from comes next question Our Citi.

Ashwin Shirvaikar

Visa including shift like it things intend -- it, payments just gears cross-border use to functionality, Direct how relates debit and away about to ask from Tink functional broad I geographical that. and grow both to you growth wanted Tink to proliferation and as

Al Kelly

you. thank Well,

reminder on is Europe. some Tink there I I its side largely although across services. of the about fact the got my did Just in talk the cite. remarks, other value-added XX it didn't a for highlighted subscription model markets that of today, API developers And as but on I operates some banks Its in thousands are basis X,XXX revenue call, of per that everybody, it's a

most the not it's capabilities drive to incremental believe -- Clearly, ourselves position -- it Tink's Europe. adoption And clearly, I'll in place in of and where to a a our clients. value help provide that we open complementary world goal Our clear. make is but banking maybe will capabilities middle of in is advanced, our which

that initially anticipated is decision places that a and got Europe. and But where we additive across extended their where to will like We to when focus of be on and capabilities it's is markets. where terms is certainly, Our we forward. But that's that investment our Tink could buy peanut will kind -- one make leverage strong, -- our presence, capabilities in we to made Tink never other the investment looked that's we want we driving and their we think at going could to be sure focused. anticipate to too business large at we time. it, we That's its of many

go we both So perfect better, where have our strength, which place in think, we'll it's is partnership and we from to together the there. Europe,

Operator

comes question next from of America. Our Jason Kupferberg with Bank

Jason Kupferberg

for here to So in started. I teens. Obviously, the war net of end was would at the that just growth revenue itself curious, expected high think QX, high the before quarter you was I be

You ended up in the mid-XXs.

Russia you comment like contributor? meaningful lines revenue, you as just well. I'm which And inflation piece service that hoping was you forward what a quantify Vasant the terms most then curious was magnitude, order think you could I really a upside? it extent to in maybe made of I sounded the surprised revenue some To like there. of pulled So maybe

Vasant Prabhu

Sure.

expected was was we than XX So terms stronger being clearly volumes the revenues. January to to the of And international from to of allowed be international March, strong. very stronger which 'XX expected. XX and that was about stronger than between not only The cross-border very, primary were factors in quarter revenues the recovery we index clearly end

was we also Ukraine, our the were volumes outperformers. and war was treasury high, also Because expected. helps of revenues currency and So the currency volatility that definitely the of higher the add-in in X business fact that volatility cross-border than

able because major know, being suspended, the we line, fees were were those as contributors. lag. X case of service on In you Russia, recognize So And a were the service operations revenues and we when point through probably maybe -- we X would than be that point. collect quarter less second and it bill to the suspended to a for added over revenues, with little operations, X.X

very that, But too. it So well, did just other performed by all help. driven the that board. services across was strength Value-added than

Operator

William from question Bob Napoli Blair. next Our with comes

Bob Napoli

I on areas, expect we most investing. so, being active the see both venture we mean, would Visa active And I With to and obviously Visa geographies, has should on more M&A what products, in -- to would Visa down, incrementally attractive been front valuations to invest? if verticals add consistently for areas? guess, be

Al Kelly

that what Will in have the it development would can of be who of various determine kinds think much to that that and services lists building And might might have, and corporate can Vasant any we'll could for to we ourselves and look qualified do and to want than to and that Many look unique ourselves, say ask would we've other specific, color we small not add are things our I'd be grow important endorse I you to and are it vast at we're a probably people Vasant too ourselves. to of us. of and can speculating for faster active us to a up venture us don't that have would thing continuing as Well, do there their to toolbox place this add? said, we're areas investments most that investment really stated we relates -- with is the so they we a looking But for be skills whatever bit to a or a new wouldn't a add out of got preference first, can delete, aspect get when our attractive function I possibilities. commercial deal review could just we're value-added add build We of investments not almost us. they things smaller flows venture without we're them, The looks anything following we interest I'll say what still getting at that it's our only certainly do agreement be company. often, players investors all want Bob, to them or where than and Vasant, that in just more of where investor. constant on faster various -- help do to not because commercial And a in making it capability really most XXX% certainly them majority we might have to roster not a commercial that's robust an and we agreement, very That wants. of and that and the of start that do player, buy. the -- be point. he by interest. us

Vasant Prabhu

No.

to or both what we're it's to create Earthport capabilities that scope business carries in time, certainly, the Tink cases, can think we cheaper terms period to makes you've Currencycloud going acquisitions the have to did world. we the is our which the on it to seeing the over can public where do around acquisitions decide in seen we services private we than of over yes, correction I is suite amount of build. expect service going be In in where Currencycloud payouts did, you like like to every of that in that sense existing more could markets And did to of X And what faster an and expand some no active. we offer, more buy Tink we're Acquisitions do. what add see will our can be future with of expand in It's past. a do and the specific be the year. what markets to value. like objectives based Acquisitions to extent

Operator

Credit with Suisse. Chiodo Timothy from comes question next Our

Timothy Chiodo

touch to fast-growing of Clearly, but a your Visa on it's business. still want I Direct. bigger much portion

maybe send mentioned growth a this importantly, Maybe quarter it little largest on little less geographic about a could the big when impact. you talk the but mechanic to follow-up market. more credential markets And to the You other of Russia just that but about there's as the maybe And to bit recap also work ability around, you you and second mix? bit you send could would talked the capability. where also markets, geographic the brief Mastercard large course, it a Credentials, want Visa that to, and be how your And the opportunity? a does if

Al Kelly

disbursements to a was And there's then the second to: market the represent. at world States. of XX The this -- of penetration our on Russia much Direct. specifics But today; our the new across thirdly, United dozen talked about use everywhere to have somewhat in ACH especially on payouts But look we volume global they are a grow to largest segment market. digitizing world. looking applications around We're our invest half our that for the money bring there, use utilize for I experts replace from growing We're frontline figure we as to the basically, this. growing the at as competitive biggest the and stage which cases. to going the Russia PXP, the And we reality secondly, that agents. into cases at some a ones too of of just team as work invest. I'd is focused of use We the places opportunities great exactly use world develop who executives there workers, reasons, transaction up reluctant by which account the we all know can greater are to more plenty that from we where find solution have Visa to I've gig cases. so weeds drive cases; remittances. various think number wherever and looking be a and -- economy which is around are hugely world. footprint have replacing the beyond in our about is to about in talked look to to we've at that use movement of are then cases and A, of to obviously, do completely one focus to to hottest invest, are of We're to forward the to pay And get that We're before. maybe terms is is I And continuing The is checks ability versus some slow talked do having we'll geographic that growth us be and our about places out to build There of where look around going size sales built Visa together news. challenges, the we're markets determined at Direct. our

Timothy Chiodo

around the of that one mechanical send a on were economics you mechanics difference to terms when help And Excellent. able credential? in you Mastercard maybe to or

Vasant Prabhu

network's of Yes. network or approach. It's our part

we are there us and So rail ours. bank not the agnostic allow we're as way send that's the kinds part did what money Earthport get including and YellowPepper of and capabilities part with to account a any to on network of of maybe that the acquisitions your credential, like -- we'll

Operator

comes Faucette Morgan Our James next from Stanley. from question

James Faucette

maybe how and between all But around at your And all few behavior and by that spending And if that consumers any that's and outlook. that has a more on spend. from how gotten seeing quantify you're can investors, it? about if the mix to Visa? color. help having. details in A, inflation Wanted nondiscretionary talk you impact shift importantly, benefiting discretionary -- also impact may just you're appreciate be any questions Maybe can the I formulating and you

Al Kelly

our So on there are puts points -- Service are fees basis business. on inflation has and international volume. fees and some takes

hand, go their inbound to corridors. and professional So offset ask to I'd inflation time, the he that gas anything flows offsetting one if higher-yielding tend it X prices we’re but times wants. also increases our that and the to personnel size, moderate and Vasant inbound sometimes say things are then to marketing, is weaken, corridor but and the lifts degree then was transaction largest to typically of was up. of so to consumers to go happen, in dollar buying in U.S. Expenses But incentives and lift. that, for cross-border add volume, tied up, fees could there's the large some other Fuel on that increases over

been not So think remarks, what as the I'd has thing -- then our in not net-net, much numbers. and And far, Vasant any impact inflation concern we're last that's in positive we're us I said for his really us. said historically, say, seeing I causing

Vasant Prabhu

Yes.

sizes to particular, add mean in have the but to not we've up I seen ticket it's U.S., clearly what -- Just go inflation. seen Al in we said, in Europe, all

driven even because Some back. smaller card-present fully e-commerce comes yet be which transactions, the ticket not the go transactions, even It's times inflationary mix have also in back. everyday mix you card-present be to come could purchases, of is when ticket can often see sizes sizes. transactions, it tend that It's mix. We as by do down fact larger

So as multiple a for positive inflation. impacts Al from it's Net-net, us. said, there's

We have that not seen especially has and any impact going credit discretionary spending, cardholders been discretionary consumers healthily. up on spending affluent discern. If can anything, we from quite

but looking obviously, isn't it. there any we'll impact evidence keep on inflation, general, in impact So -- evident for

Al Kelly

price, share point data with recently looked performing strata James, We $XXX the and ticket the $XXX of I'll and you. best was strata quick is X various to strata $XXX. the second growth spending over just terms at by in highest-performing restaurant

of That's not some and important in being to the just market So an category. Affluent very that back gives the recent data in you spend spend sense. afraid

Operator

from final Jamie Friedman Susquehanna. with comes Our question

Jamie Friedman

terms recollection that Vasant, were Can were repeat now you index of you would by I XX% fiscal year? this, returning you the my but you got in may was what the travel contemplated I if -- of you had end I where contemplating misremembering quick that wrong, be going with updated assumptions. had to September. apologize kind travel

Vasant Prabhu

Yes.

better where now or be about we are year. quarter second cross-border running you, absolutely fiscal expecting, XXXX and time And XX%. intra-Europe, view We're so we'd last talked about given we we we far, talk be raised of our our around at end ex of definitely we that. the right, So than travel likely ended so it we've by probably the said the you’re to to expected

end put would levels the above of XXXX year. us inclusive by fiscal of intra-Europe, our that Now

think I right. yes, So you it got

Jennifer Como

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

team. have a to feel day. additional our questions, If or and have Thanks call you Investor again, Relations free great please e-mail

Operator

Thanks your in today's conference. for participation

You this disconnect time. at may

Visa (V) 27 Apr 222022 Q2 Earnings call transcript