Visa Inc.

Welcome to Visa's fiscal first quarter 2025 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 Visa's Fiscal First Quarter 2025 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer, and Chris Soth, Visa's 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 10-Q and 8-K, 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 gap 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. Before we begin, I'd like to take a moment to acknowledge last night's tragic air collision in Washington, D.C. Our hearts go out to all those affected by this terrible event, particularly the families and friends of the victims. Turning now to our results. We had a strong start to our fiscal year with $9.5 billion in net revenue, up 10% year over year, and EPS up 14%. Our key business drivers improved from the fourth quarter. In constant dollars, overall payments volume grew 9% year over year. U.S. payments volume grew 7% and international payments volume grew 11%. Cross-border volume excluding entry Europe rose 16% in constant dollars. And process transactions grew 11% year over year. Our strategy across consumer payments, new flows, and value-added services continues to resonate with our clients and is reflected in our business results. Back in February 2020, When we articulated our strategy, our total first quarter volume on our network had just crossed $3 trillion. Just five years later, our total quarterly volume was above $4 trillion. At the same time, Samia and Latin America had more volume from people using their cards to get cash than to make payments. Five years later, as a result of double-digit constant dollar payments volume growth in both regions, the situation has flipped and we now have more than 60% of our volume from digital payments. I'm looking forward to our investor day next month to discuss our strategy and our plans for future growth. For now, let's look at some of the quarterly highlights that have helped to deliver this impressive progress in consumer. We now have 4.7 billion credentials up 7% year over year, and 12.6 billion tokens, up 44% year-over-year. We continue to grow our credentials in an increasingly digital world. Interest in our Visa Flexible credential continues to grow. We have now launched with the Affirm card in the U.S., expanded the funding options with SMCC in Japan by adding small business cards, and announced a multi-currency solution with FinTech Live in the UAE. Tap to add card is now live in the US for nearly 60% of all visa consumer credit and debit cards. Since the launch, millions have added their cards to their wallets by tapping, eliminating the overwhelming majority of provisioning fraud as compared to manual entry into a phone. And 74% of all face-to-face transactions are now tapped to pay. A few countries I would like to call out. Japan. where tap-to-pay penetration grew 20 percentage points since last year to 44%. Argentina, where tap-to-pay penetration was up 22 percentage points to 78%. And the US, where it was up 13 percentage points to 57%. Several key initiatives contributed to the growth in these countries, including targeted marketing campaigns, the launch of transit acceptance in certain cities, and increased issuance of tap-to-pay enabled credentials. Finally, tap-to-phone is now live in 118 markets, and in the last year, the number of phones enabled has more than doubled, and the number of transactions has more than tripled. Now let me turn to a few deal highlights from across the globe. First, in mainland China, we renewed our partnership with ICBC. the largest bank in the world in terms of assets, and the biggest credit card issuer in mainland China in terms of number of cards. In India, we renewed our long-standing credit agreements with ICICI Bank, SBI Card, and Kotak Mahindra Bank, three of our largest issuers in the country with a focus on growing affluent and cross-border volume. We also renewed our debit agreement with Kotak Mahindra Bank. Also in our Asia Pacific region, we signed a long-term renewal with Bank of New Zealand, one of the largest banks in the country across consumer debit, consumer credit, and business credit. In Argentina and Uruguay, we renewed our portfolios with Santander for a long-term agreement with a focus on growing affluent. Also in Latin America, we have deepened our partnership with Bach, to grow acceptance with a goal to enable 300 000 nano and small merchants and to grow in new verticals we also won the issuance of their largely cross-border credit portfolio mihas plus offering our expertise and value-added services similarly in brazil we extended our partnership with digital bank neon which includes the launch of a new credit portfolio We are also pleased to have renewed a pan-European agreement with BNP Paribas, which also includes the winning of additional portfolios in France and Belgium. You know, when we talk about the total addressable opportunity in consumer payments, we often talk about the opportunity to win share from domestic networks. And we are continuing to have success converting credentials from domestic networks to Visa. In Bangladesh, we secured nearly 6 million credentials with Dutch Bangla Bank from their closed-loop system. And Banco Popular de Puerto Rico, the largest issuer and acquirer in Puerto Rico, renewed a multi-year credit and debit partnership with Visa that aims to expand digital penetration in the country through the launch of new products, including a co-badge card with the local network. and we've renewed our business with RBC Royal Bank in 10 countries across the Caribbean, and we also expanded our relationship to include the transfer of debit credentials in the Dutch Caribbean to Visa and are supporting the development of new credit and commercial products. And co-brand cards remain a key area of strength for us, and this quarter was no exception. In India, we launched two very important cards. First, the Times Black ICICI bank credit card catering to high net worth individuals with travel and lifestyle benefits. Second, the HSBC Taj credit card, India's first premium co-branded hospitality credit card. In our Samir region, we signed with real estate developer, investor, and manager Aldar for a co-brand card for its Darna Rewards by Aldar loyalty program in the UAE with issuing bank Emirates NBD. We also launched a new co-brand card in Saudi Arabia with Al Raji Bank and Marriott Bonvoy, the global travel program by Marriott International. In the airline category, we won the portfolio for Egypt Air, Africa's second largest airline. We also expanded our business in the Swiss Card Miles and More program. And in the retail segment, we signed with Casas Bahia, one of the top retailers in Brazil for co-brand cards, and with Bolt, a leading ride-hailing and food delivery operator in Ukraine. So through traditional issuance, winning share from domestic networks, and leveraging our brand products and innovation to secure important co-brands, our consumer payments business is strong. Now to new flows, where revenue grew 19% year over year in constant dollars. Visa Direct has now crossed the 10 billion transaction mark over the last 12 months with nearly 3 billion transactions this quarter. We continue to expand Visa Direct in several ways, one of which is building and deepening partnerships directly with issuers and fintechs. We are excited to partner with XMoney for their much anticipated launch of the XMoney account, including P2P payment finalities set for later this year. Through the partnership, XMoney will utilize Visa Direct to enable secure and instant funding of their X wallet with a user's debit card. Users will also have the option to instantly transfer funds back into their bank account via the same debit card. This quarter we signed an agreement with OnePay, a FinTech company with more than 3 million monthly active users for Visa Direct as the engine for wallet loads. In Ecuador, Banco Pichichia, one of the country's largest issuers, will begin using Visa Direct for cross-border remittance payments. Our broad and deep cross-border capabilities continue to be important differentiators. And this quarter, Libra Internet Bank in Romania launched a real-time multi-currency FX service for their business customers utilizing our currency cloud solution. In Asia Pacific, OCBC has launched a cross-border P2P solution on the OCBC app allowing their customers in Singapore to send money to Chinese wallets using Visa Direct. All they need is the recipient's China national ID name and mobile number. Now moving to commercial, where volumes were up 6% year over year this quarter in constant dollars, we had some notable progress in specific verticals. First, in the food and grocery delivery vertical, we had two recent wins. In the U.S., We are pleased that DoorDash's shopper card program will soon be using Visa virtual commercial credit cards to enable dashers to pay for customer orders at physical merchant outlets. This is in addition to our Visa direct relationship with DoorDash in the US, Australia, and Canada to enable dasher payouts. In Brazil, we signed a commercial business card deal for commercial customers of iFood Pago. the FinTech for the largest food delivery platform in the country. In the healthcare vertical, we reached a virtual card agreement with an insure tech company in France, MySophie, offering medical policyholders an easy way to pay for their healthcare. In the T&E vertical, we recently renewed and deepened our partnership with Air Wallachs. a global financial platform enabling more than 150,000 businesses to manage payments and money movement across borders. Today, Visa and Airwallex have live card programs in Australia, Hong Kong, the UK, United States, Canada, Netherlands, and Singapore to enable businesses to easily make digital card payments around the world. And soon, we will be expanding to new geographies across our use cases in expense cards and B2B travel. In both Visa Direct and Commercial, we continued to develop innovative new solutions and use cases that helped us retain and secure business. Now to Value Added Services, where in the first quarter, revenue grew 18% in constant dollars. Across our solutions, we continue to grow revenue as we enhance Visa payments, enable services for all types of payments, and go beyond payments. We often partner with acquirers who utilize Visa's acceptance platform to offer their merchant clients compelling solutions. When this happens, we generate revenue on both Visa and non-Visa transactions. Three examples this quarter are European acquirer eMerchantPay, Guatemalan acquirer Neonet, and Paraguayan acquirer Bancard, who will all offer CyberSource to their merchants. We are also partnering with Fiserv to include our CyberSource Gateway as a solution for their acquirers and merchants in Europe and Asia Pacific. This is in addition to Fiserv expanding their use of cardholder authentication from Cardinal Commerce to further extend our global partnership into additional Fiserv platforms. In our risk solutions, in 2024, we launched Visa Protect for A-to-A payments. with plans to expand to 10 new RTP networks in 2025. Powered by AI-based fraud detection models, this new service provides a real-time risk score that can be used to identify fraud on account-to-account payments. We are now piloting the solution with five significant players in Brazil who represent more than 20% of PIX transactions. We are also very pleased to have closed our acquisition of feature space, enabling us to provide an expanded set of fraud prevention tools to our clients and protect consumers in real time across various payment methods. In advisory services, we continue to see strong demand. One example of a recent project is with Al Raji Bank, where we are expanding our advisory relationship into risk, digital enablement and data analysis across their portfolios. So across our value added services portfolio, we are innovating with new solutions and deepening our partnerships with clients to drive growth. To wrap it up, we began our fiscal year with strong performance and ever growing obsession for our clients. and a focus on continued innovation as we build the future of payments. I look forward to seeing you in February at our Investor Day, and now over to Chris.