Visa Inc.

Welcome to Visa's Fiscal Fourth Quarter and Full Year 2024 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, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin. Thank you.

Good afternoon, everyone. And welcome to visas fiscal fourth quarter and full year 2024 earnings call joining us today are Ryan mcinerney visas chief executive officer and Chris saw visas chief financial officer. This call is being webcast on the investor relations section of our website at investor visa.com a replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance, and our actual results could differ materially as the result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10-K and any subsequent reports on Forms 10Q and 8K, which you can find on the SEC's website and the Investor Relations section of our website. Our comments today regarding our financial results will reflect revenue on a GAAP basis and all other results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan.

Good afternoon, everyone. Thank you for joining us. Our fourth quarter results were very strong, with $9.6 billion in net revenue, up 12% year over year, and EPS up 16%. Our key business drivers were relatively stable compared to Q3. In constant dollars, Overall payments volume grew 8% year over year. U.S. payments volume grew 5%, and international payments volume grew 10%. Cross-border volume, excluding intra-Europe, rose 13%. And process transactions grew 10% year over year. As I reflect on this quarter and the full fiscal year, I am incredibly proud of the more than 31,000 Visa employees who have been focused on delivering our strategy and enabling our clients with compelling solutions, which resulted in the company's strong performance. We have continued to grow our consumer payments business through an intense focus on product design and innovation. In new flows, our targeted strategy for non-consumer payments is paying off. And in value-added services, We have deepened our relationships with our clients through multiple different solutions and continued to expand our services to non-visa transactions. We have done all this while further increasing our suite of solutions. Now let's dive into some of the highlights for the fourth quarter and the year. In consumer payments, we continued to increase credentials and acceptance. We have over 4.6 billion credentials, up 7% year over year, and 11.5 billion tokens, with more than 30% of our total transactions tokenized. Global merchant locations crossed 150 million. The Olympics and Paralympics certainly helped, with more than 7 million Paris 2024 branded cards issued and more than 130,000 merchant locations added in Europe. and I am particularly excited about new acceptance use cases. For example, we renewed an agreement with Cantaloupe, a leading provider of self-service commerce across sectors such as food and beverage automated retail, with over a million active devices globally and more than a billion transactions annually. And in the Netherlands, we reached an agreement with the country's largest grocer, Albert Heijn, to expand in-store acceptance to all Visa products. We also recently renewed our agreement with Appfolio in the U.S. for rental payments acceptance. Appfolio is one of the largest software providers in the property management space and services 8 million plus units across more than 20,000 clients. Throughout the year, we have continued to innovate in order to expand Visa's capabilities to non-card payments. This quarter, we announced Visa A2A, bringing the power of Visa's brand, infrastructure, and rules, as well as consumer protections to enable simpler, safer, and more secure account-to-account payments. We are excited to be collaborating with several banks, including NatWest, and Nationwide Building Society, and several leading fintechs, including Modular, to deliver an industry-driven solution to unlock the full potential of account-to-account transactions in the UK. And Visa A2A is open, open to any eligible bank, open banking provider, and verified biller. Initially, this is targeted at bill payments, and we plan to launch in 2025 in the UK. We are very excited to bring this to market. In prior quarters, I've mentioned our account-to-account fraud risk scoring solution, Visa Protect for A2A payments. It was recently announced as Juniper Research's Platinum Winner for Fraud and Security Innovation of the Year Award, and we will be piloting on 10 new RTP networks in 2025. We're also seeing very strong interest in our new flexible credential, which enables multiple payment options from one Visa credential. We have hundreds of issuers in the pipeline and several launches planned for 2025 in the US, Asia Pacific, Europe, and Samia. Last quarter, I mentioned the expansion of tapping use cases on a mobile device. Tap-to-add card is now enabled by issuers in more than 15 countries across our five regions. We know that transit is a key activator for tapping and global tap to ride transactions exceeded 2 billion for the first time in fiscal year 2024 up 25% year over year. We added more than 110 new transit systems throughout the year in cities such as Boston, Athens, Beijing, Las Vegas, and Lima to total over 870 globally. And more than 40% of these new systems also use our value-added services acceptance solutions. Tap-to-pay penetration globally, excluding the U.S., was at 82%, up six points from 2023. And in the U.S., it was at 54%, up 13 points from last year, with 29 out of the top 30 U.S. merchants accepting tap-to-pay. Now pivoting to some deal highlights. We had some significant renewals this quarter around the globe. First, with one of our largest clients in Latin America, Grupo ProAmerica, in credit, debit, and commercial across eight countries. Second, with our largest Asia Pacific client, SMCC, across consumer and commercial credit. Third, with our largest Samia client, Al-Raji, across consumer, commercial, and value-added services, including CyberSource and Visa Risk Manager, our network agnostic risk product. And across both Asia Pacific and Samia, with Standard Chartered Bank, a credit renewal across key markets in Asia, a debit renewal with key markets in Africa, as well as a new expansion in the Middle East for credit. they will continue to use our value-added services. In North America, we had three very important renewals. In Canada, we renewed our relationship with the country's top issuer, RBC, across consumer credit and debit, small business credit, and commercial credit. In the U.S., we recently extended our longstanding partnership with U.S. Bank to grow our relationship across their consumer and commercial portfolios. and we have renewed with USAA across both their consumer debit and credit portfolios. Finally, in Europe, building upon our strong relationship in Italy and across 11 other markets, we are pleased to have renewed the strategic agreement with Intesa San Paolo, expanding our collaboration in Italy with the largest bank in the country for innovative solutions amongst businesses and consumers. In addition, Together we will enable new value-added services for their Visa customers. Across all of our regions and all of our FinTech partners, from early stage to mature, we signed over 650 commercial partnerships, up 30% from last year. As you can see, we have continued to grow our businesses through active engagement with our clients and a relentless focus on new product innovations. Now moving to new flows, where our targeted strategy for capturing newer areas of growth is paying off. This quarter, new flows revenue grew 22% year over year in constant dollars. Visa direct transactions grew 38% for the quarter to 2.8 billion, and commercial volumes grew 5% year over year. We finished the year with almost 10 billion Visa direct transactions, and 1.7 trillion in commercial payments volume. Commercial credentials grew at 18% year over year, significantly faster than the 7% growth for total credentials that I mentioned earlier. We are very focused on growing B2B in new verticals, such as travel. We are pleased to announce that we signed a virtual card issuing deal with JPMorgan Chase in Europe. This is a significant opportunity for Visa to further build on our strong issuing relationship in North America, as well as further grow in the B2B travel vertical. Additionally, in Europe, we will be partnering with Audion so that they can offer online travel agencies or OTAs Visa virtual cards as part of their B2B travel solution. Another area of focus is the cross-border B2B space, where we offer significant value for complex payments through both CARD and Visa B2B Connect. For Visa B2B Connect, we increased the number of banks that have signed on by almost 40% year over year, and the number of transacting banks is up nearly 60%. In Korea, we reached two agreements with HanaCard. The first is a commercial and consumer credit and debit issuance partnership, with enhanced multi-currency capabilities targeted towards the cross-border needs of its customers. The second is an agreement with Honocard and the government trade agency, Cotra, so that small business exporters can receive cross-border B2B payments via card. In Canada, we are very pleased to have won the multi-currency credit issuance with FinTech Loop, a cross-border banking platform for Canadian-based SMBs. In addition, our cross-border capabilities through Currency Cloud will provide FX solutions across accounts, digital wallets, and international payments. In Australia, we reached a multi-currency commercial debit agreement with OFX, a leading global money transfer company that offers foreign exchange services international payment and spend management controls. Now moving to Visa Direct, where we have continued to grow through new and expanded relationships. In Europe, we expanded our existing cross-border P2P partnership with Revolut to now allow real-time card transfers for their business customers via the Visa Direct platform in over 78 countries, supporting over 50 currencies. In the U.S., We are excited about an expanded partnership with DailyPay, whose users are currently accessing earnings on demand via Visa Direct to now seamlessly send those earnings as international remittances to friends and family around the world. In Brazil, we reached a new agreement with Travelex Banco do Cambio one of the largest foreign exchange banks in the country and the first to specialize in FX operations regulated by the central bank. The client will use Visa Direct for import and export payments and for remittances to a broad range of destinations. So across our new flows, we have seen our specific strategies succeeding in the marketplace. And now on to value-added services, where revenue was up 22% in the fourth quarter and full year in constant dollars. Let's look at the progress we have made across our value-added services. In our issuing solutions, our core banking and issuer processing platform, Pismo, has a good pipeline and its solutions are resonating with clients with nearly 12 billion API calls a month. Recently, Pismo renewed its agreement with Itaú in Brazil. And in 2025, we plan to expand Pismo's offerings to clients in more than five countries across four regions. In risk and identity solutions, we recently announced our intent to acquire FeatureSpace, a developer of real-time artificial intelligence payments protection technology. It will enable Visa to provide enhanced fraud prevention tools to our clients and protect consumers in real time across various payment methods. And Worldline, already a Visa partner and leading European acquirer, will soon be launching an optimized fraud management solution utilizing Decision Manager to provide businesses with AI-based e-commerce fraud detection capabilities. In acceptance, food delivery platform Food Panda has been a longstanding cybersource client in Asia across several markets. They will also soon be using our AI-powered data token solution, which we announced earlier this year, enabling customers to control how their data is used to experience tailored shopping experiences. In advisory services, Visa consulting and analytics delivered more than 3000 consulting engagements during the year. And we estimate that we helped clients realize over $5 billion of incremental revenue as a result. So our value added services have continued to show strong momentum across both visa and non-visa transactions and non-payment value added services. Before I close, I wanted to make a few comments on the recent lawsuit by the Department of Justice. We believe the lawsuit is meritless and shows a clear lack of understanding of the payment ecosystem in the United States. We will defend ourselves vigorously and are confident in our ability to demonstrate that Visa competes for every transaction in a thriving debit space that continues to grow and see new entrants. In closing, I am proud of our team and all that we have accomplished. We delivered on our financial expectations while also investing in Visa's future through important product innovation. Back at 2020 and our investor day, we set a goal for new flows and value added services revenue to represent more than 30% of net revenue by the end of 2024. I am pleased to say that we have exceeded that goal. And we will be hosting another Investor Day on February 20, 2025, here in San Francisco, when we can talk more about our strategy to continue growing value-added services, new flows, and consumer payments. I see tremendous opportunity ahead and feel confident in our plans to get us there. Now over to Chris.