V | Q4 2024

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Overview

• Non-GAAP EPS of $2.71 beats by $0.13.

• Revenue of $9.62B (+11.7% Y/Y) beats by $130M.

Takeaways

Visa (V) reported another very strong quarter to close out 2024, with notable growth in revenue and earnings. The company achieved $9.6 billion in revenue, a 12% increase from the previous year, while earnings per share (EPS) rose by 16%.

Payments volume grew by 8% overall, with U.S. payments up by 5% and international payments by 10%. Visa’s continued focus on global expansion also helped boost cross-border transactions, which grew 13%, aided by Visa's presence at high-profile events like the Paris Olympics.

Revenue growth came from more than one area, with data processing up 8% and international transactions up 9%. Marketing around the Olympics boosted revenue from marketing services, which contributed to a 30% rise in Visa’s “other revenue” category.

A significant driver of Visa’s growth has been the increase in “credentials” (the number of Visa cards in circulation), which now total over 4.6 billion worldwide. With this, Visa continues to expand merchant acceptance globally, recently crossing the milestone of 150 million merchant locations.

This expansion was supported by agreements with leading merchants and service providers. For example, Visa renewed a contract with Canelo, a provider of self-service retail devices, and signed new agreements with Albert Heijn, the Netherlands' largest grocery chain, and AppFolio, a major software provider for property management.

To enhance transaction security and innovation, Visa has also ramped up tokenization, with over 30% of transactions now utilizing token technology.

Generally speaking, innovation remains a key focus for Visa, highlighted by its Visa A2A solution. This initiative aims to make account-to-account transfers safer and more accessible. Set for launch in 2025 in the UK, Visa A2A will enable secure bill payments through open banking.

Another product, the Flexible Credential, allows users to access multiple payment options from one Visa card, with plans for launches in multiple regions.

Visa has also capitalized on the popularity of tap-to-pay, particularly in transit systems, adding 110 new transit networks in cities like Boston, Las Vegas, and Lima in 2024.

Visa’s new business areas, including Visa Direct and commercial services, experienced significant growth. Visa Direct transactions grew 38% for the quarter, reaching nearly 10 billion transactions for the year, while commercial payments volume hit $1.7 trillion.

Visa also struck a key partnership with JPMorgan Chase in Europe, strengthening its presence in virtual card issuance for B2B transactions in the travel industry. The Visa B2B Connect network saw a big increase in participating banks, growing by nearly 60% year-over-year.

In the U.S., Visa’s payments volume grew 5%—not bad. Growth was particularly strong in Latin America (up 24%) and the CEMEA region (up 19%), while growth in Asia Pacific remained low, the result of a challenging economic climate in China.

Visa also prioritized shareholder returns, buying back $5.8 billion worth of shares and increasing dividends by 13%.

With a strong Q4 finish, Visa’s full-year net revenue grew by 10%, and EPS increased by 15%, proving the resilience of what I still think is the “Gold Standard” of dividend stocks.

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