Visa’s profits are soaring and the deal to acquire Visa Europe looks like it will happen this week for US$22 billion. Third quarter net income jumped 41% year-on-year (YOY) to $1.5 billion.
Global purchase volume rose 12.0% (FX) to $1.27 trillion and total processed transactions, which represent transactions processed by VisaNet, for the third quarter, were 18.4 billion, an 8% increase over the prior year.
U.S. Gross Dollar Volume (GDV) for Q3/15 (credit + debit) increased 8.7% YOY to $822 billion, while Purchase Dollar Volume (PDV) rose 9.7% YOY to $629 billion for the third quarter.
The number of U.S. Purchase Transactions (PTX) for credit + debit jumped 10.8% to 13.6 billion for the third quarter.
At the end of Q2/15 Visa had 629 million U.S. accounts representing 799 million credit and debit cards. (Visa reports accounts and cards on a one quarter delay).
For U.S. Visa credit cards, PDV increased 10.2% for Q3/15 to $345 billion and the number of cards-in-force (CIF) rose to 323 million at end of Q2/15
For U.S. Visa debit cards, PDV rose 9.3% YOY for Q3/15 to $349 billion and the number of CIF increased to 467 million at end of Q2/15.
VISA PROFITS HISTORICAL
Q3/14: $1073 million
Q4/14: $1569 million
Q1/15: $1550 million
Q2/15: $1697 million
Q3/15: $1512 million
Source: Visa; CardData
Visa noted net income in the fiscal fourth quarter was $1.5 billion or $0.62 per share, an increase of 12% and 14% over the prior year adjusted results, respectively. Adjusted net income for the full-year 2015 was $6.4 billion or $2.62 per share, an increase of 13% and 16% over the prior year’s adjusted results, respectively. The Company’s full-year 2015 adjusted financial results excluded a non-cash, non-operating expense recorded upon the revaluation of the Visa Europe put option of $110 million. The Company’s 2015 results included a one-time tax benefit of $239 million resulting from the successful resolution of uncertain tax positions with taxing authorities during the fiscal third quarter that related to prior years.
Net operating revenue in the fiscal fourth quarter of 2015 was $3.6 billion, an increase of 11% nominally or 13% on a constant dollar basis over the prior year. The strengthening of the U.S. dollar versus the prior year quarter negatively impacted net operating revenue growth by approximately 3 percentage points.
Fiscal fourth quarter 2015 service revenues were $1.6 billion, an increase of 9% over the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 6% over the prior year to $1.4 billion. International transaction revenues grew 16% over the prior year to $1.1 billion. Other revenues were $216 million, a 3% increase over the prior year. Client incentives, which are a contra revenue item, were $802 million and represent 18.4% of gross revenues.
Total operating expenses were $1.3 billion for fiscal fourth quarter 2015, a 5% increase over the prior year’s adjusted results, primarily related to an increase in personnel, professional, and marketing expenses, additional depreciation from our ongoing investments in technology assets, offset by lower general and administrative expenses.
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